Demonstration Project on NAFTA Trucking Provisions

[Federal Register: August 17, 2007 (Volume 72, Number 159)]
[Notices]
[Page 46263-46289]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17au07-103]

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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
[Docket No. FMCSA-2007-28055]

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice; response to public comments.

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SUMMARY: The FMCSA announces its intent to proceed with a project to
demonstrate the ability of Mexico-domiciled motor carriers to operate
safely in the United States, beyond the commercial zones along the
U.S.-Mexico border. On May 1, 2007, FMCSA published a notice in the
Federal Register announcing its plans to initiate a project as part of
the Agency's implementation of the North American Free Trade Agreement
(NAFTA) cross-border trucking provisions, and requesting public comment
on those plans. On June 8, 2007, FMCSA published a notice in response
to section 6901(b)(2)(B) of the ``U.S. Troop Readiness, Veterans' Care,
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007''
(the 2007 Act) seeking public comment on certain additional details
concerning the demonstration project. The FMCSA has reviewed, assessed
and evaluated the required safety measures as noted in the previous
notice, and considered all the comments received as of July 31, 2007 in
response to the May 1 and June 8 notices. Once the U.S. Department of
Transportation's Inspector General completes his report to Congress, as
required by section 6901(b)(1) of the 2007 Act, and the Agency completes

[[Page 46264]]

any follow-up actions needed to address any issues that may be raised
in the report, FMCSA will proceed with the demonstration project.

DATES: This notice is effective August 17, 2007.

ADDRESSES: Docket: Background documents or comments to the docket for
this notice may be accessed through the Docket Management System (DMS)
at http://dms.dot.gov through reference to the docket number set forth
at the beginning of this notice. These docket materials may also be
reviewed at the U.S. Department of Transportation, Docket Operations,
M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue,
SE., Washington, DC 20590 between 9 a.m. and 5 p.m., ET, Monday through
Friday, except Federal holidays. The DMS is available electronically 24
hours each day, 365 days each year.
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.

FOR FURTHER INFORMATION CONTACT: Mr. Milt Schmidt, Division Chief,
North American Borders Division, Federal Motor Carrier Safety
Administration, West Building 6th Floor, 1200 New Jersey Avenue, SE.,
Washington, DC 20590-0001. Telephone (202) 366-4049; e-mail
milt.schmidt@dot.gov.

SUPPLEMENTARY INFORMATION:

I. Background

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 in
Canada or Mexico, or owned or controlled by persons of those countries.
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.\1\ 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.
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\1\ Commercial zones are not of uniform size, as they are
primarily based on the population and size of the applicable border
municipality. Thus, the San Diego, CA commercial zone is
considerably larger than the Brownsville, TX commercial zone. In a
limited number of cases, specific commercial zones have been
established by statute or regulation.
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Trucking issues at the U.S./Mexico border were addressed by 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 property carrier applications (Form OP-1(MX)). This rule
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.
Mexico filed complaints against the United States under NAFTA's
dispute resolution provisions, challenging the delay in opening the
border to long-haul vehicles. An arbitration panel issued a report in
February 2001 concluding that the blanket refusal to process
applications of Mexico-domiciled long-haul carriers breached NAFTA.
After the Administration responded to the arbitration panel decision by
announcing its intent to resume the process for opening the border,
Congress enacted section 350 of the Department of Transportation (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), issued
pursuant to section 350, on the implementation of safety requirements
at the U.S.-Mexico border. In a January 2005 follow-up report, also
issued pursuant to section 350, 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.

Announcement of the Plan To Initiate a Demonstration Project

On February 23, 2007, United States Secretary of Transportation
Mary E. Peters and Mexico Secretary of Communications and
Transportation Luis T[eacute]llez 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.
On May 1, 2007, FMCSA published notice of the demonstration project
in the Federal Register (72 FR 23883). The Agency explained that 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 must comply with all motor carrier safety laws and
regulations and all other applicable U.S. laws and regulations,
including those concerned with customs, immigration, vehicle emissions,
employment, vehicle

[[Page 46265]]

registration and taxation, and fuel taxation.
The Agency explained that the safety performance of the
participating carriers will be tracked closely by FMCSA and its State
partners, a joint U.S.-Mexico monitoring group \2\, and an evaluation
panel \3\ independent of the DOT. The FMCSA indicated the resulting
data will be considered carefully before decisions are made concerning
the further implementation of the NAFTA trucking provisions. The
comment period for the notice ended on May 31.
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\2\ The Department of Transportation 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.
\3\ The Secretary appointed former DOT Inspector General Kenneth
Mead, former DOT Deputy Secretary Mortimer Downey and former House
Appropriations Subcommittee 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. It will
operate independently from other monitoring efforts and provide its
own assessment of the project. Its conclusions will be considered
carefully before a decision is made concerning the full
implementation of the NAFTA trucking provisions.
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On May 25, 2007, the President signed into law the U.S. Troop
Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability
Appropriations Act, 2007 (the 2007 Act), (Pub. L. 110-28). Section 6901
of the 2007 Act requires that certain actions be taken by DOT as a
condition of obligating or expending appropriated funds to grant
authority to Mexico-domiciled motor carriers to operate in the United
States beyond the municipalities and commercial zones on the United
States-Mexico border.
On June 8, 2007, FMCSA published a notice in response to section
6901(b)(2)(B) of the 2007 Act. The Agency explained that section
6901(a) requires that grants of authority for Mexico-domiciled motor
carriers to operate beyond the border commercial zones be tested first
as part of a ``pilot program.'' The Agency also indicated that section
6901 required the pilot program to comply with section 350 of the 2002
DOT Appropriations Act and 49 U.S.C. 31315(c), concerning requirements
for pilot programs. The comment period was originally scheduled to end
on June 28, 2007; it was extended until July 9, 2007. However, the
Agency has considered all comments filed as of July 31, 2007.

II. General Discussion of Comments

The purpose for this notice-and-comment process is to provide all
interested parties with the opportunity to review information published
by the Agency and comment on the specific details about the
demonstration project. As of July 31, FMCSA received 2,359 comments, or
docket submissions, in response to the May 1 and June 8 notices. The
Agency received approximately 2,330 comments from the general public,
including truck drivers and small trucking companies based in the U.S.
Most of these commenters expressed concerns that Mexico-domiciled
trucking companies pose a safety risk to the traveling public. The
remaining comments were from organizations and associations expressing
their views on specific details about the demonstration project.
The Agency's announcement of its intent to proceed with the project
is based on its consideration of all data and information currently
available, including information submitted by the commenters. About
2,330 of the comments were submissions by individuals that were no more
than a few sentences and consisted of conclusory statements indicating
that Mexico-domiciled carriers are unsafe and that the demonstration
project should be abandoned. These comments, most of which were
submitted electronically, did not include information concerning
technical (e.g. specific safety oversight procedures or processes) or
legal aspects of the demonstration project or economic issues, or any
other information supporting the assertions made therein. While FMCSA
is not responding to these comments individually, the Agency is neither
ignoring them, but instead believes that its responses to the
substantive comments it has received more than adequately addresses the
brief comments submitted by these individuals.

Commenters Discussing Technical and Economic Issues

The agency received detailed comments from: Advocates for Highway
and Auto Safety (Advocates); AFL-CIO, Transportation Trades Department
(TDD); Altshuler Berzon, LLP (Altshuler); \4\ American Trucking
Associations (ATA); Arkansas Trucking Association; the Demarche
Alliance, Inc. (Demarche); the Free Trade Alliance (FTA); the
International Brotherhood of Teamsters (Teamsters); the Owner-Operator
Independent Drivers Association (OOIDA); the Oregon Department of
Transportation, Motor Carrier Transportation Division (ODOT); Public
Citizen; and the Truck Safety Coalition (the Coalition), a partnership
between Citizens for Reliable and Safe Highways (CRASH) and Parents
Against Tired Truckers (P.A.T.T.).
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\4\ The law firm submitted comments on behalf of the Sierra
Club, Public Citizen, Environmental Law Foundation, International
Brotherhood of Teamsters, Brotherhood of Teamsters, Auto and Truck
Drivers Local 70, and the Owner-Operator Independent Drivers Assocation.
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A. General Comments in Support of the Demonstration Project
Several commenters supported the demonstration project. The
comments ranged from general remarks to reactions to opposition
comments in the docket. Several commenters supported the project as
important in meeting U.S. obligations under NAFTA.
For example, one of the supporters is Congressman Jeff Flake, from
Arizona. Acknowledging NAFTA's continued emphasis on safety,
Congressman Flake said, ``[T]he Department should move ahead with this
demonstration project and I look forward to the full implementation of
our NAFTA commitments.''
Other examples are the Greater San Antonio Chamber of Commerce (GSA
Chamber of Commerce), the San Antonio Economic Development Foundation,
Inc., and the San Antonio Hispanic Chamber of Commerce. The GSA Chamber
of Commerce believes cross border trucking is critical to the
competitiveness of the North American region, and specifically the
Texas-Northern Mexico region. The GSA Chamber of Commerce stated:

Regional projects like the Toyota plant in San Antonio, that
source components in a just-in-time fashion from suppliers in
Northern Mexico, need cross border trucking to achieve ideal
efficiencies. These efficiencies are critical to making the Toyota
project, and others like it, competitive with manufacturers in other
regions around the world.

The San Antonio Hispanic Chamber of Commerce stated:

In the global environment that we operate in, the strategic
advantage that both the U.S. and Mexico mutually share in competing
with other counties is our proximity to each other. We cannot afford
to give away this strategic advantage but unfortunately continue to
do so. As a result of transferring trailers prior to crossing the
border into our respective countries, we continuously are

[[Page 46266]]

faced with unnecessary costs and time incurred at the border.

FTA believes the demonstration program is a critical step in the
process of moving forward with the Nation's obligations under NAFTA.
FTA stated that under the current system of moving freight from Mexico
to the United States, as many as three carriers might handle a single
shipment. FTA believes the current system costs consumers an average of
$400 million per year and that the demonstration project would lead to
reduced shipping costs.
B. General Comments in Opposition to the Demonstration Project
Most of the commenters to the May 1 and June 8 notices believe the
demonstration project will create safety and economic risks, violate
procedural and substantive requirements of U.S. law, or have other
adverse effects. These commenters also asserted that Mexican drivers
would accept lower wages, resulting in job losses for U.S. drivers.
Many of the safety-related comments were based on the presumption that
Mexico-domiciled carriers and drivers will be unwilling or unable to
comply with U.S. laws because the carriers and drivers are governed by
less stringent laws and subject to less stringent enforcement in Mexico.
The Teamsters wrote that the demonstration project will put the
public in danger, and that the project ``should not proceed until it is
certain that FMCSA has the ability and resources to monitor and implement
this program in a way that ensures that public safety is not endangered.''
In addition, 114 members of Congress co-signed a letter to the
President on the matter. A copy of the letter is in the docket
referenced at the beginning of this notice. These members expressed
concern about the demonstration project. They understand the
President's responsibility to fulfill the United States' obligations
under NAFTA but argue that the interest in opening the border should not
be put ahead of public safety, homeland security, and economic vitality.

III. Comments Concerning Requirements Under the 2007 Act

A. Section 6901(a), Fulfilling the Requirements of Section 350

Comments About FMCSA's Interpretation of Section 6901(a)
Advocates believe FMCSA failed to ``fully comply'' with the section
350 requirements. Advocates also contend FMCSA may not begin the
demonstration project until the Department of Transportation's
Inspector General verifies the Agency has completed the tasks required
under subsection (1)(E) of section 350(c) of the 2002 DOT
Appropriations Act, dealing with the information infrastructure in
Mexico for handling Mexican licenses.
OOIDA argued that FMCSA's interpretation that the new law is
satisfied by the previously published OIG reports ``* * * violates the
canons of statutory interpretation that a law may not be interpreted in
a way that renders it meaningless.'' OOIDA also said it was appropriate
to conclude from hearings conducted two years after the 2005 Inspector
General's report that Congress ``* * * had significant questions as to
whether or not DOT was in compliance with Section 350.''
FMCSA Response:
The requirements of section 350 have been satisfied through past
rulemakings and other agency actions. Previous OIG reports demonstrate
FMCSA's completion of the tasks listed in subsection (1)(E) of section
350(c). The Agency emphasizes that the provisions of section 350 which
require rulemaking for implementation were incorporated into a series
of rules published on March 19, and May 13, 2002. Under the rules
adopted on March 19, 2002, FMCSA will: (1) Conduct safety examinations
or pre-authorization safety audits (PASA) \5\ on Mexico-domiciled
carriers seeking authority to operate beyond the border zones,
encompassing the nine areas required by section 350(a)(1)(B); (2)
assign a distinctive U.S. DOT number to each Mexico-domiciled motor
carrier operating beyond the border zones, in accordance with section
350(a)(4); (3) require Mexico-domiciled motor carriers operating beyond
the border zones to certify that they will have their vehicles
inspected by a certified inspector every three months, in accordance
with section 350(a)(5); and (4) require Mexico-domiciled carriers to
provide proof of valid insurance issued by an insurance company
licensed in the United States before granting them authority to operate
beyond the border zones, in accordance with section 350(a)(8).
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\5\ A detailed discussion of the PASA is provided later in this notice.
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In fulfilling other requirements of section 350(a), FMCSA will
continue to exceed the requirement in section 350(a)(1)(C) that 50% of
the PASAs be conducted onsite. For this demonstration project the
Agency will conduct all of the PASAs onsite.
With regard to certain other requirements in section 350(a), the
Agency is prepared to conduct a compliance review (CR) of all Mexico-
domiciled carriers that are granted provisional operating authority
within 18 months [350(a)(2)], if there is a need to do so during the
12-month demonstration project, based on certain factors. The FMCSA
will prioritize long-haul Mexico-domiciled carriers for CRs based on a
number of factors including the amount of time the carrier has been
operating beyond the commercial zones, and the carrier's safety performance
as measured through roadside inspections and crash involvement.
During the demonstration project, FMCSA and State inspectors will
verify electronically the status and validity of the license of each
driver of a participating Mexico-domiciled motor carrier crossing the
border [section 350(a)(3)]. Enforcement officials have been provided
with the means of querying the Mexican Licencia Federal Information
System (LIFIS) and the FMCSA's 52nd State System, a repository of
Mexico-domiciled drivers' convictions while operating vehicles in the
U.S. A more detailed discussion of the process for checking the status
of drivers' licenses is presented later in this notice.
The Agency will satisfy section 350(a)(6) through its routine
policies and procedures. The results of roadside inspections conducted
by State officials are regularly uploaded to FMCSA's databases. Each
year, the results from approximately 3 million roadside inspections are
uploaded to FMCSA. The results include information identifying the
motor carrier, the vehicle, the driver, and any violations discovered
during the inspection.
As to the requirement of section 350(a)(7), FMCSA has worked with
its State partners to equip all U.S.-Mexico commercial border crossings
with scales suitable for enforcement of U.S. CMV weight restrictions.
In addition, sections 350(c)(1) and 350(d) of the 2002 DOT
Appropriations Act required the OIG to conduct a comprehensive review
of FMCSA border operations before vehicles operated by Mexico-domiciled
carriers may operate beyond the border commercial zones and to conduct
periodic follow-up reviews. The OIG conducted its initial review in
June 2002 and has since conducted the required follow-up reviews.
Section 350(c)(2) required the Secretary of Transportation to certify
in writing in a manner addressing the Inspector General's findings that
the opening of the border does not pose an unacceptable safety risk to
the American public before Mexico-domiciled motor carriers may operate
CMVs beyond the border commercial zones. Secretary

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Norman Mineta issued that certification in November 2002, and the
President thereafter ended the 1982 moratorium on the cross-border
operation of Mexico-domiciled carriers beyond the border commercial
zones, directing the Secretary to grant authority for such operations
to qualified Mexican carriers.
In its 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.\6\
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\6\ The OIG's latest follow-up report has been submitted to Congress
and is expected to be made public near the publication date of this notice.
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Given this background, FMCSA interprets section 6901(a) to mean
that the Agency must ensure that all rules adopted pursuant to section
350 remain applicable to Mexico-domiciled motor carriers participating
in the demonstration project, and that the Agency must remain in
compliance with all other section 350 requirements as they relate to
the demonstration project, including the requirements concerning
staffing, facilities, equipment, and procedures that the OIG was
required to review. The FMCSA believes it has fully satisfied the
requirements of section 350 and section 6901(a).
Adequacy of Enforcement Resources
Several commenters believe there would be inadequate Federal and
State enforcement resources to ensure the participating carriers and
drivers comply with the demonstration project requirements. Commenters
asserted that FMCSA's proposed demonstration project would create an
added burden on enforcement staff and result in non-enforcement of the
project requirements. Commenters also said that there would be
insufficient personnel at border crossings and insufficient physical
space for inspections. Commenters questioned the extent to which the
Mexican government was responsible for enforcement.
Advocates believe the demonstration project ``raises the issue of
whether the U.S. border inspection facilities actually have the
capacity to fulfill this commitment in light of the unknown number of
trucks that may participate in the [demonstration project].''
Public Citizen wrote, ``FMCSA has demonstrated little capacity to
conduct compliance reviews of motor carriers.'' Public Citizen
indicated that in 2003, 12,000 compliance reviews were conducted out of
670,000 registered carriers. Public Citizen also noted that ``the
notice does not suggest that new inspectors will be hired to undertake
the burden [created by the demonstration project], nor is there an
estimate of what the burden to inspectors would be to carry out these
compliance reviews.''
The Teamsters believe the Mexican government failed to initiate
safety requirements, and entered into negotiation for such requirements
only under pressure to facilitate Mexican trucks coming into the United
States. The Teamsters said, ``Without sufficient enforcement on the
Mexican side of the border that establishes a strong no-tolerance
policy, Mexican truck drivers will arrive at the U.S. border without
the benefit of government and industry practices that deter this kind
of [non-compliant] behavior.'' The Teamsters also believe FMCSA is
relying heavily on State and local law enforcement to keep watch over a
vast expanse of territory and prevent those trucks authorized to
operate only in the commercial zones from entering other parts of the
United States. The Teamsters argued that those responsible for the task
must receive the proper training so that they know what process to
follow when they have to put a Mexican truck or driver out of service;
and that there is no evidence presented by FMCSA that this has been
accomplished. The ATA echoed these concerns.
OOIDA and Altshuler asked for more information on the demonstration
project training for U.S. enforcement personnel. Altshuler asserted,
``The Notice does not identify when the training and guidance will
occur, who will be trained, or how many individuals will be trained.''
OOIDA stated that it has received almost no indication from State
enforcement officials that they have been required to address this issue.
The ATA, noting the complexities of cabotage regulations, also
requested information on the cabotage regulations enforcement training
materials for State and local law enforcers developed by the
International Association of Chiefs of Police and FMCSA.
FMCSA Response:
The FMCSA and its State partners have sufficient staff, facilities,
equipment, and procedures in place to meet the requirements of section
350. This conclusion is based on the Agency's experience providing
safety oversight for Mexico-domiciled motor carriers currently
authorized to operate in the commercial zones and on its regular
liaison with its State enforcement partners with whom the Agency has
worked for years in anticipation of the opening of the border to long-
haul Mexican motor carriers.
Section 350 of the 2002 DOT Appropriations Act provided more than
$25,000,000 for the salary, expense, and capital costs associated with
implementing the requirements of the statute. This funding was ``in
addition to amounts otherwise made available in the Act'' and was
continued in each subsequent appropriations bill. Further, the statute
specifies that resources for implementing the cross-border provisions
are not to be fulfilled using personnel from other programs, thus FMCSA
was specifically required to hire staff for this purpose. The FMCSA
staff hired pursuant to this funding are specifically assigned to
enforce U.S. safety requirements for Mexico-domiciled carriers. The
FMCSA currently employs 274 Federal personnel dedicated to border
enforcement activities.
In response to the Teamsters' concerns about the burden on the
States for providing safety oversight for Mexico-domiciled carriers,
FMCSA is authorized under 49 U.S.C. 31107 to provide border enforcement
grants for carrying out commercial motor vehicle safety programs and
related enforcement activities and projects. The Agency's State
partners along the border employ 349 State officials for this purpose.
Therefore, the Congress has provided funding for enforcement resources
dedicated exclusively to ensuring the safe operation of foreign-
domiciled motor carrier operations.
The FMCSA works with the States to ensure that motor carrier safety
enforcement personnel receive extensive training. In 2006,
approximately 1,880 State motor carrier safety inspectors received
North American Standard (NAS) inspection procedures training. To date
in 2007, approximately 1,602 State motor carrier safety inspectors have
completed this training. The NAS training course is designed to provide
State motor carrier safety enforcement personnel with the basic
knowledge, skills, practices, and procedures necessary for performing
inspections under the Motor Carrier Safety Assistance Program (MCSAP).
Additionally, through the Agency's partnership with the
International Association of Chiefs of Police (IACP), four Foreign
Commercial Motor Vehicle (CMV) Awareness Training sessions were
conducted in the last quarter of 2006. Approximately 245 officers were
certified to train law enforcement officers throughout the United
States. During the months of August and September 2007, it is
anticipated that five Foreign CMV Awareness training sessions will be
conducted, training an additional 60 trainers. The training

[[Page 46268]]

these officers will provide to other law enforcement officials will
ensure patrol officers are informed about potential safety and
enforcement issues involving foreign-based CMVs and drivers operating
beyond the commercial zones. Therefore, not only has FMCSA provided
funding resources to support the States' role in providing Safety
oversight for Mexico-domiciled carriers operating in the U.S., the
Agency has provided training.
The FMCSA notes that the number of Mexico-domiciled carriers and
vehicles that will participate in the demonstration project is
extremely small compared to the population of carriers and vehicles
currently operating in the commercial zones. Most of the motor carriers
that would participate in the demonstration project already have
authority to operate in the commercial zones so their participation in
the project would not result in a significant increase in the
population of Mexico-domiciled carriers operating in the United States.
Further, as to concerns regarding possible strains on border inspection
facility capacity, it should be noted that FMCSA has no reason to
believe the number of Mexican trucks crossing the border during the
demonstration project will increase significantly because the cargo
carried by the long-haul trucks would have crossed the border in any
event via short-haul, commercial zone trucks. Based on the PASA
information presented in the June 8 notice, the Mexico-domiciled
carriers for covered in the table or chart identified 142 drivers and
155 vehicles that were intended for use in the United States, for
operations beyond the commercial zones during the demonstration
project. Thus, the project should create no additional inspection
burden at the border.
With regard to comments about Mexican safety regulations, FMCSA
emphasizes that all participating motor carriers must comply with, and
the Agency and its State partners will enforce, all U.S. motor carrier
safety laws and regulations. Moreover, no commenter articulated any
reasonable basis to support their presumption that Mexico-domiciled
motor carriers cannot or will not comply with strictly enforced U.S.
safety rules because of an absence of similar requirements in Mexico,
and FMCSA is unaware that any evidence exists supporting this
presumption. Indeed, the experience of the commercial zone carriers
demonstrates that the opposite is true: Under the border inspection
regime, which long-haul carriers will also be subject to, the Mexican
carriers achieved a vehicle out-of-service rate in 2006 (21.51%) that
is lower than the 2006 out-of-service rate for U.S. carriers (24.73%).
The driver out-of-service rates in 2006 were 1.29% for Mexico-domiciled
carriers and 7.67% for U.S.-domiciled carriers. Finally, all
participating carriers will be subjected to a PASA, and failure to
demonstrate adequate safety management controls will result in the
carrier failing the PASA; thus rendering the carrier ineligible to
participate in the demonstration project.
With regard to PASAs, FMCSA has the necessary resources, as noted
in the OIG's 2003 and 2005 audits, to conduct an on-site PASA for each
carrier that is eligible to participate in the demonstration project.
The Agency has conducted PASA training for its enforcement personnel in
preparation for the demonstration project and they are fully prepared
to complete the necessary PASA for each eligible carrier. A copy of the
PASA training material is in the docket referenced at the beginning of
this notice.
In addition, FMCSA has also provided training to Federal and State
enforcement personnel concerning cabotage. A discussion of commenters'
concerns about cabotage and the training provided to ensure strict
enforcement of the prohibition against Mexico-domiciled carriers
engaging in cabotage is provided later in this notice.
Obtaining Commercial Vehicle Safety Alliance (CVSA) Decals
ODOT supported the requirement that long-haul, Mexico-domiciled
motor carriers must display a current CVSA decal, but indicated this
may result in out-of-service (OOS) trucks being stranded for an
unreasonable period of time. ODOT noted that Oregon has fewer Level 1
certified inspectors than Level 2 certified inspectors, so there may be
situations when a Level 1 inspector cannot be expeditiously dispatched
to check an OOS truck, verify repairs, and issue a new CVSA decal. ODOT
concluded that FMCSA should inform states if there is any expectation
to inspect a Mexican carrier's truck placed OOS within a certain
period. ODOT suggested the listing of a failure to have a current CVSA
decal as a violation on the inspection report, then DOT could
investigate this allegation after the inspection and determine if the
Mexican carrier should continue in the demonstration project.
FMCSA Response:
The FMCSA understands the concerns of ODOT and other State motor
carrier safety agencies. The Agency emphasizes Mexico-domiciled
vehicles that fail to meet certain safety requirements are to be
treated the same as other vehicles operated in the U.S. If a Mexico-
domiciled vehicle is found to be in violation of a rule and the
violation is included in the OOS criteria, the vehicle must be placed
out of service, regardless of the availability of certified Federal or
State enforcement personnel to re-inspect the vehicle and issue a CVSA
decal. Safety is FMCSA's top priority, and safety will not be
compromised for scheduling convenience.
The FMCSA and its State partners have adopted a policy of stopping
every vehicle operated by a participating Mexico-domiciled motor
carrier, every time it crosses the U.S.-Mexico border. During the stop,
the driver will be checked to ensure he has a valid license. If the
vehicle is being operated under the control of a Mexico-domiciled
carrier with authority to operate beyond the commercial zones, and it
does not display a current CVSA decal, the vehicle will be subjected to
a safety inspection.
The initial burden for ensuring that Mexico-domiciled vehicles are
inspected falls on FMCSA and the States of Arizona, California, New
Mexico, and Texas because they must ensure that only those vehicles
that display a current CVSA decal are allowed to proceed beyond the
commercial zones. As required by section 350 of the 2002 DOT
Appropriations Act, any vehicle that does not display a current CVSA
decal must be stopped for an inspection and prohibited from leaving the
border area until it passes an inspection. The FMCSA will continue
working with its State partners along the border to ensure every truck
operated by a carrier with long-haul authority is checked for a CVSA
decal each time it enters the U.S.
Congress authorized, and FMCSA provides, Federal grants to these
border States to cover the financial burden for assisting FMCSA in
providing motor carrier safety oversight along the U.S.-Mexico border.
Presently, the resources go toward ensuring that Mexico-domiciled motor
carriers operating in the commercial zones along the border comply with
applicable safety requirements. Under the demonstration project, long-
haul Mexico-domiciled motor carriers, unlike commercial zone Mexican
carriers, and U.S. and Canadian carriers operating in the U.S., are not
authorized to operate in the U.S. without a valid CVSA decal. Any CMVs
operated by long-haul Mexico-domiciled carriers that do not display a
current CVSA decal will be stopped for

[[Page 46269]]

a safety inspection; the vehicle must pass the inspection and have a
CVSA decal affixed to it by a Federal or State inspector before the
driver is allowed to proceed on his trip.

B. Section 6901(a), Fulfilling the Requirements of 49 U.S.C. 31315

Under 49 U.S.C. 31315(c)(2), a pilot program must include safety
measures designed to achieve a level of safety that is equivalent to,
or greater than, the level of safety that would otherwise be achieved
through compliance with the FMCSRs. Pilot programs are also required to
have the following six elements:
a. A scheduled life of not more than 3 years.
b. A specific data collection and safety analysis plan that
identifies a method for comparison.
c. A reasonable number of participants necessary to yield
statistically valid findings.
d. An oversight plan to ensure participants comply with the terms
and conditions of the program.
e. Adequate countermeasures to protect the public health and safety
of study participants and the general public.
f. A plan to inform State partners and the public about the pilot
program and to identify approved participants to safety compliance and
enforcement personnel and to the public.
Verifying Carrier Safety Compliance
Four commenters addressed safety compliance verification. Altshuler
argued the program plan does not identify ``[a]n oversight plan to
ensure that participants comply with the terms and conditions of
participation'' [49 U.S.C. 31315(c)(2)(D)]. Altshuler noted that the
description of the bi-national monitoring group states only that the
group will ``supervise the implementation of the demonstration project
and * * * find solutions to issues affecting the operational
performance of the project.'' Altshuler does not believe that the
monitoring group can ensure compliance by the project participants, and
that it is unclear whether the bi-national monitoring group has a real
oversight role.
In addition, Altshuler said that the notice asserts that Federal
and State auditors, inspectors, and investigators will have ``knowledge
and understanding'' of the program, and of potential enforcement
measures. Altshuler then points out that the notice does not identify
when the training and guidance will occur to provide ``knowledge and
understanding,'' who is trained, or how many individuals will be
trained. Altshuler argued that there is no way of determining whether
the proposed activities will ``ensure that participants comply with the
terms and conditions of participation.''
The Teamsters stated that, even with enforcement, there seems to be
a willingness on the part of Mexican carriers and drivers to ignore
some of the basic requirements for operating in the commercial zone.
The Teamsters noted that the SafeStat figures for 2005 show 9,205
specified traffic violations by Mexican carriers. Of that number, 8,684
are size and weight violations.
Public Citizen stated that the 108 compliance reviews conducted by
FMCSA of Mexico-domiciled carriers in 2005 represents less than 1
percent of the 14,000 carriers operating in the border zone.
FMCSA Response:
The FMCSA and its State partners will ensure compliance with the
requirements of the demonstration project the same way the Agency and
the States ensure that Mexico-domiciled motor carriers operating in the
commercial zones comply with the applicable safety regulations. The
FMCSA and the States have a robust safety oversight program for Mexico-
domiciled carriers that are currently allowed to operate commercial
motor vehicles in the U.S. Further, in order to assist in ensuring
compliance, FMCSA imposed the following on Mexico-domiciled carriers
participating in the demonstration program: (1) The application for
long-haul operating authority, which includes requirements for proof of
a continuous financial responsibility versus trip insurance used by
commercial zone carriers; (2) successful completion of the PASA prior
to being granted provisional authority; (3) the requirement to display
a valid CVSA decal; and (4) the requirement to have a special
designation in their USDOT identification numbers to allow enforcement
officials to readily distinguish between commercial zone carriers and
those authorized to go beyond the commercial zones.
In addition, section 350 and 49 CFR part 385 require that a
compliance review (CR) be conducted within 18 months of the carrier
being granted provisional operating authority. In the context of the
12-month demonstration project, FMCSA will prioritize long-haul Mexico-
domiciled carriers for CRs based on a number of factors such as the
carrier's safety performance as measured through roadside inspections
and crash involvement.
The FMCSA and its State partners have for many years provided
safety oversight under the same regulations for a much larger
population of Mexico-domiciled carriers operating in U.S. commercial
zones than the group that will participate in the demonstration
project. As such, the Agency effectively already has a plan in place to
ensure participants comply with the terms and conditions of the
project; full compliance with existing U.S. safety regulations and
cabotage rules will be required, as is the case with Mexico-domiciled
carriers operating in the border commercial zones, and the enforcement
of those requirements is already well established.
Table 1 below provides roadside inspection data for fiscal years
2001 through the present. For five consecutive fiscal years (including
fiscal year 2007, which ends on September 30, 2007), the FMCSA and its
State partners have increased the number of inspections, and currently
conduct in excess of 125,000 inspections each year.

Table 1.--Truck Inspection (Non-Hazmat) for Mexico-Domiciled Carriers in the Commercial Zones
[Based on MCMIS snapshot as of June 22, 2007]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total driver Total vehicle
Fiscal year Inspection Total driver OOS Driver OOS Total vehicle OOS Vehicle OOS
totals inspections inspections rate (percent) inspections inspections rate (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2001.................................... 59,171 59,038 4,951 8.39 54,481 18,280 33.55
2002.................................... 80,464 80,149 5,957 7.43 73,088 19,872 27.19
2003.................................... 127,855 127,700 4,576 3.58 113,610 27,208 23.95
2004.................................... 129,004 128,721 2,575 2.00 119,031 28,810 24.20
2005.................................... 156,821 156,688 1,837 1.17 143,601 31,679 22.06
2006.................................... 177,124 176,722 2,274 1.29 165,320 35,556 21.51

[[Page 46270]]

2007.................................... 140,562 140,519 1,486 1.06 128,358 27,859 21.70
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
FY2007--Inspections that occurred between October 1, 2006 and June 22, 2007.
Vehicle Inspections--Level 1, 2, and 5 Inspections.
Driver Inspections--Level 1, 2, 3 Inspections.

As Table 1 demonstrates, enforcing the safety regulations against
Mexico-domiciled motor carriers is not a new concept for the Agency and
its State motor carrier safety enforcement partners. The only
significant enforcement change that will occur during the demonstration
project is that States beyond the four border States will now encounter
Mexico-domiciled carriers. These State motor carrier safety enforcement
personnel are already trained and experienced in motor carrier safety,
having conducted more than 3 million roadside inspections each year.
Their experience demonstrates they are aware of how to enforce motor
carrier safety requirements, including rules pertaining to operating
authority.
Additionally, FMCSA has developed, in cooperation with the
International Association of Chiefs of Police, a ``Foreign Commercial
Motor Vehicle Awareness Training Program'' which includes a brochure
entitled ``Understanding the Basic Operating Requirements of Foreign-
Based Motor Carriers, CMVs, and Drivers.'' The purpose of the program
is to inform patrol officers (officers that do not conduct motor
carrier safety enforcement activities) of potential safety and
enforcement issues involving foreign-based CMVs and drivers operating
outside commercial zones. The information will be useful during a
routine traffic stop or in response to a crash. The training is being
provided to local law enforcement personnel nationwide by certified
roadside inspectors.
With regard to comments about the role of the monitoring group, the
FMCSA emphasizes that neither the group nor the independent evaluation
panel established by DOT has responsibilities for ensuring that
participating motor carriers comply with the requirements of the project.
The roles of the monitoring group and evaluation panel are explained above.
As for the number of compliance reviews conducted on Mexico-
domiciled motor carriers, FMCSA emphasizes that the CR is an
enforcement tool used to assess the safety fitness of motor carriers.
The selection of carriers is prioritized based on a number of factors,
such as high crash rates, roadside inspection results, etc. Thus, the
number of CRs conducted is based on the number of high-risk carriers
that have been identified based on those factors, not on the total
number of carriers subject to FMCSA's jurisdiction. The Agency has
sufficient resources to ensure that high-risk carriers are evaluated in
a timely manner. The Agency will not conduct CRs for the sake of
meeting a quota without regard for the overall safety outcomes of such
activities in terms of crash prevention. Under the demonstration
program the Agency will prioritize long-haul Mexico-domiciled carriers
for CRs based on a number of factors including the amount of time the
carrier has operating beyond the commercial zones, and the carrier's
safety performance as measured through roadside inspections and crash
involvement.
In response to Altshuler's comments about specific details on
training of Federal and State enforcement personnel to verify carriers
comply with the terms of the demonstration project, FMCSA provides a
detailed discussion elsewhere in this notice.
With regard to the Teamsters' comment about Mexico-domiciled
carriers' level of compliance with U.S. safety requirements, the
inspection data above demonstrates the exact opposite. When the
inspection data are viewed in the context of the number of Mexico-
domiciled CMV crossings into the U.S. each year, the number of traffic
violations cited by the Teamsters suggests the vast majority of Mexico-
domiciled drivers comply with U.S. traffic rules. Each year there are
approximately 4.5 million Mexican CMV crossings into the United States.
Putting the Teamsters figure in context, 8,684 size and weight
violations represents a violation rate of only two-tenths of one
percent. Further, as to the remaining 521 traffic violations, for 4.5
million trips, this figure is far from alarming.
One-Year Limit for the Demonstration Project
Advocates and Public Citizen both argued against truncating the
test period from 3 years authorized by 49 U.S.C. 31315(c) to 1 year.
Both commenters questioned whether the duration of the project will
allow for the collection of sufficient data for accurate and complete
analysis to make credible and defensible generalizations about the
safety of the project.
Advocates made reference to Agency statements indicating that the
agency plans to increase participation by adding 25 motor carriers per
month over a 4-month period. Advocates believe this results in a lack
of clarity whether the previously announced 1-year time limit for the
project will stretch to 16 months in order to give each motor carrier
one year of experience participating in the project. Advocates also
stated that the notice indicated that ``up to'' 100 Mexico-domiciled
motor carriers will be selected, thus the final number of selected
carriers is unknown.
ATA believes the information provided by the Agency suggests that
after the 1-year project period, motor carriers do not have to reapply
under their respective country's application process to continue
operations. ATA sought further clarification from FMCSA and the
Secretaria de Comunaciones y Transportes (SCT) regarding the ``post-
demonstration project'' for continued cross-border operations after
successful review of the 1-year time period.
FMCSA Response:
The FMCSA believes that a 1-year demonstration project is
sufficient to determine whether the safety oversight program the Agency
adopted in response to section 350 of the 2002 DOT Appropriations Act
will enable the Agency to ensure that Mexico-domiciled motor carriers
operating beyond the border zones can achieve a level of safety
equivalent to, or greater than, the

[[Page 46271]]

level attained by other motor carriers operating in the U.S.
Although section 6901 of the 2007 Act requires that the
demonstration project meet the requirements of 49 U.S.C. 31315(c)
concerning pilot programs, that statute does not require that such
programs be 3 years in duration. Section 31315(c)(1)(A) provides for a
``scheduled life of each pilot program of not more than 3 years.''
Therefore, the statute sets 3 years as a maximum, not a minimum.
The Agency will allow up to 100 carriers to participate in the
project. This represents a significant percentage--100 out of 989
carriers, or about 10%--of the motor carriers that had submitted
applications for operating authority prior to the announcement of the
Agency's plans to conduct the demonstration project and will generate
more than enough data for a meaningful safety analysis. The Agency
acknowledges that the number of participating carriers may fall below
the goal of 100. However, the Agency believes there is sufficient
interest in the project to ensure an appropriate number of participants.
In addition to the number of participants, the volume of the data
depends on the frequency with which the participating carriers operate
in the United States. For example, if few trips are made, there will be
few safety inspections at the border and even fewer in non-border
States. The FMCSA is not aware of any information suggesting that the
amount of freight transported during the project would vary
significantly based on the scheduled life of the project. The Agency
believes the decision to limit the project to 1 year is appropriate in
light of the number of carriers, drivers, vehicles, and their exposure
rate during the project.
With regard to the ATA comment, FMCSA contemplates that the
demonstration will last for one year from the date of FMCSA's initial
grant of authority.
Participating Carrier Number and Diversity
The Teamsters, Public Citizen, the Coalition, and Altshuler believe
that the selection of motor carriers to participate in the project
would negatively affect the data. Public Citizen argued that the
participants might not be representative of the entire universe of
eligible carriers. The Coalition believes the Agency has not completed
preparations for organizing and conducting a safe and scientifically
valid pilot program as required by 49 U.S.C. 31315(c).
The Teamsters argued that selection bias in favor of the safest
carriers will slant the data on violations, crashes, and other
compliance issues. They claimed that this non-representative data might
then be misused to proclaim the project a success and justify a full
opening of the border after the 1-year period.
Similarly, Advocates believe the Agency also fails to fulfill
section 6901(c)(3), which directs the Secretary to ensure that ``the
pilot program consists of a representative and adequate sample of
Mexico-domiciled carriers likely to engage in cross-border operations
beyond United States municipalities and commercial zones on the United-
States Mexico border.'' Advocates argued that ``cherry-picking'' only
scrupulously screened Mexican motor carriers and not comparing them
against a comparable cohort, but against all U.S. motor carriers, is
not selecting ``a representative'' sample.
Advocates noted that FMCSA provided information on the status of
107 motor carriers, but has not provided any details about why each
motor carrier passed, failed, or withdrew its application.
Altshuler argued the Agency has offered insufficient information
about who will participate in the project. Also, Altshuler stated that
the demonstration project does not include a ``plan to inform State
partners and the public about the pilot program and to identify
approved participants to safety compliance and enforcement personnel
and to the public'' [49 U.S.C. 31315(c)(2)(F)]. Altshuler argued the
selection of carriers appears to be a wholly closed process, with no
opportunity for the public to comment on applications of particular
carriers. The law firm noted that there is no plan to educate the
public or the State and local authorities about the program or the
carriers participating in it.
In addition, Altshuler stated that the notice provides incomplete
information regarding the program's reciprocal nature. Altshuler said
the notice indicates that the proposed program is ``reciprocal,'' and
that ``[u]p 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.'' However, the commenter
stated the notice provides no information as to the specific terms on
which U.S.-domiciled motor carriers may operate in Mexico. Without this
information, the commenter argued that there is no way to assess
whether these terms are actually similar to those proposed in the program.
FMCSA Response:
Section 350 of the 2002 DOT Appropriations Act and section 6901 of
the 2007 Act clearly prescribe what FMCSA must do prior to granting
operating authority for long-haul Mexico-domiciled carriers to operate
in the U.S. The FMCSA will ensure, consistent with Congress' expressed
intent, only safe carriers are permitted to operate in the U.S.
The Agency has selected carriers from among those that submitted an
application for authority to operate beyond commercial zones since the
Agency began accepting applications under its 2002 application
regulation. The Agency will allow into the program only those carriers
that meet the safety criteria, as demonstrated through the successful
completion of the PASA. To the extent that there is an opportunity to
achieve some geographic and operating size diversity, the Agency will
select carriers accordingly. However, safety is FMCSA's top priority.
The Agency will not compromise highway safety for the sake of achieving
carrier diversity.
In response to Advocates comment about the PASA information
presented in the June 8 notice, the notice includes details about why
motor carriers failed the PASA. For each carrier that failed the PASA, the
Agency identified which of the six factors the carrier failed to satisfy.
The FMCSA disagrees with comments alleging that the Agency is
manipulating the outcome of the project by selecting only those
carriers with the best safety performance records. The Agency's
selection criteria do not impose safety performance standards for the
demonstration project that are beyond those provided in the safety
regulations, including the PASA requirements. These are the same
regulations that would apply were Mexican carriers to be considered for
long-haul operating authority outside the context of a demonstration
project. Participating carriers must have safety performance records
that reflect the ability to operate safely in the U.S., and safety
management controls to demonstrate the willingness to comply with U.S.
safety regulations. The FMCSA expects that participating carriers to
demonstrate the ability to operate safely.
With regard to Altshuler's remarks about the opportunity for public
comment on individual carriers applications for operating authority,
the FMCSA emphasizes that the public has the opportunity to comment in
response to the FMCSA Register on every application that the Agency
proposes to grant. As explained in the June 8 notice, if the carrier
has successfully completed the PASA, FMCSA publishes the carrier's
request for authority in the

[[Page 46272]]

FMCSA Register. The FMCSA Register can be viewed by going to: http://
li-public.fmcsa.dot.gov/LIVIEW/pkg_html.prc_limain and then selecting
``FMCSA Register'' from the drop-down box in the upper right corner of
the screen. Any member of the public may protest the carrier's
application on the grounds that the carrier is not fit, willing, or
able to provide the transportation services for which it has requested
approval. FMCSA must consider all protests before determining whether
to grant provisional operating authority. The Agency's rules governing
protests, codified at 49 CFR part 365, subpart B, are the same rules
applicable to protesting operating authority requests filed by U.S. and
Canada-domiciled carriers.
In addition, as required by section 6901(b)(2)(B)(ii) of the 2007
Act, FMCSA will publish in the Federal Register, and provide for public
comment, comprehensive data and information on PASA's conducted after
the date of enactment of the 2007 Act. The Agency will publish
information about PASA's completed since the list presented in the June
8 notice was prepared; the June 8 notice covered PASA's completed as of
May 31, 2007. Therefore, the public has two opportunities to comment on
Mexico-domiciled carriers' applications: In response to the FMCSA
Register, and in response to the Federal Register notice required by
section 6901(b)(2)(B)(ii). Additional carriers can be added to the
ongoing program after PASA information about them is published and an
adequate opportunity for comment is provided.
In response to the comment about reciprocity for U.S. carriers,
FMCSA continues to work closely with the Mexican government to ensure
that up to 100 U.S.-domiciled carriers are granted authority to operate
in Mexico during the demonstration project. The Agency is working with
the U.S. trucking industry to facilitate the exchange of information
between the Mexican government and U.S. trucking companies interested
in applying for authority to enter Mexico. The project will not
commence until such reciprocity is provided. However, FMCSA is not
required to provide notice and comment on the Mexican government's
application process for obtaining operating authority, or its criteria
for selecting U.S.-domiciled carriers.
In response to comments about the plan to inform the States about
the program, FMCSA reiterates the Agency and its State partners have
extensive experience providing safety oversight for a much larger
population of Mexico-domiciled carriers operating in U.S. commercial
zones than the group that will participate in the demonstration
project. The Agency will inform State motor carrier safety enforcement
personnel about the demonstration project through its existing routine
methods of sharing with them information about new programs. These
methods include, but are not limited to, conferences, meetings, and in-
service-training. For example, the Agency has worked with the IACP
Border Group to discuss the demonstration project, including meetings,
memoranda and e-mail communications.\7\ In addition, the MX suffix on
their USDOT numbers will identify motor carriers participating in the
demonstration project to the public at large.
---------------------------------------------------------------------------

\7\ A southern border state Steering Committee was established
to review policies, evaluate procedures and advise the FMCSA on
matters of concern to law enforcement along the U.S.-Mexico border.
The Steering Committee meets as needed to study issues relating to
the effect of the NAFTA on the law enforcement and commercial
vehicle regulation along the border. Membership of this committee
consists of the chief administrators of the state agencies
responsible for commercial vehicle safety and enforcement in the
four southern Border States (CA, AZ, NM, and TX).
---------------------------------------------------------------------------

For law enforcement officials that do not routinely handle CMV
enforcement, the FMCSA has developed, as discussed above in this
notice, a ``Foreign Commercial Motor Vehicle Awareness Training
Program'' which includes a brochure entitled ``Understanding the Basic
Operating Requirements of Foreign-Based Motor Carriers, CMVs, and
Drivers. The purpose of the program is to inform patrol officers of
potential safety and enforcement issues involving foreign-based CMVs
and drivers operating outside commercial zones.

C. Section 6901(b)(2)(B)(i)--Comprehensive PASA Information

Altshuler does not believe FMCSA provided sufficient notice and
opportunity to comment on the PASAs to satisfy the requirements of
section 6901 of the 2007 Act. Altshuler stated the PASA data provided
shows that 33 of 107 carriers have passed the PASAs and that at least
nine carriers who have applied to participate in the program are
waiting to have PASAs scheduled. Altshuler argues the 2007 Act requires
the Secretary to publish PASA information regarding carriers
participating in the project prior to the initiation of the
demonstration project but nothing in FMCSA's June 8 notice explains
when the Agency intends to publish a Federal Register notice with the
PASA results for the remaining carriers.
In addition, Altshuler stated that the June 8 notice does not
explain what agency action will constitute initiation of the program,
and thus would trigger a cut-off by which all PASA information must
have been made public and available for comment. Altshuler argues that
until FMCSA has published a notice and provided an opportunity for
public comment on the PASA information for all the anticipated
participants in the proposed pilot program, that Agency cannot initiate
the program.
Altshuler, Advocates, and Public Citizen questioned the accuracy of
certain PASA information presented in the June 8 notice. For example,
Altshuler explained Luciano Padilla Martinez (USDOT No. 557972), listed
in row 12 of the PASA results table, is shown as having 3 vehicles it
intends to operate in the U.S. in Table 2, while the carrier is shown
as having 6 vehicles that it intends to operate in the U.S. and have
current CVSA decals in Table 4. Similarly, Francisco Ulloa Montano
(USDOT No. 817872), listed in row 45, is shown as having 7 vehicles it
intends to operate in the U.S. but Table 4 indicates that only 3 vehicles
were inspected during the PASA, with 2 of the 3 receiving CVSA decals.
Public Citizen and Advocates noted that 6 of the 33 motor carriers
listed as having ``passed'' the PASA are not listed as having met the
five mandatory safety elements required for column J. Public Citizen
said ``The fact that it is unclear whether or not nearly one fifth of
the motor carriers asserted to have `passed' the PASA have actually met
FMCSA's mandatory requirements is an alarming error in the agency's
data.'' In commenting about carriers that withdrew their applications
for long-haul operating authority, Public Citizen stated `` * * * there
is no explanation as to why a plurality of the carriers withdrew their
applications and whether this fact should be read as an admission of
failure or not.''
FMCSA Response:
The FMCSA does not believe the specific questions they raised about
the PASA information presented in the June 8 notice supports assertions
that the Agency failed to provide sufficient opportunity for public
comment about the PASAs conducted. Among other things, the 2007 Act
does not require data and information on PASAs for all carriers that
will ultimately participate in the demonstration project to be subject
to notice and comment through publication in the Federal Register
before the program can begin. The statute is satisfied, if prior to the
program's initiation, such notice and

[[Page 46273]]

opportunity for comment is provided with respect to PASAs for all
carriers that will initially participate. Additional carriers can be
added to the ongoing program after PASA information about them is
published and an adequate opportunity for comment on it is provided.
The Agency thus fulfilled the requirements of section 6901 of the 2007
Act for providing comprehensive information through its June 8 notice,
and through the inclusion in the public docket, of its February 21,
2007, guidance memorandum, ``Conducting the Pre-Authorization Safety
Audit,'' and a sample PASA report.
The PASA memorandum explains how the PASAs are to be conducted by
FMCSA personnel, the documentation the motor carrier will need for
review by the safety auditor during the PASA, and the procedures the
auditor will follow while using the FMCSA's Compliance Analysis and
Performance Review Information (CAPRI) software. The sample PASA report
provides a representative sample of a completed PASA so that all
interested parties will have the opportunity to better understand all
the topics reviewed in a PASA and how the audit is documented.
The FMCSA emphasizes that the Agency has not yet initiated the
demonstration project. The fact that a significant amount of
preparatory work has been completed, including conducting numerous
PASAs, does not mean that the demonstration project has already
started. The Agency has not granted any Mexico-domiciled motor carriers
provisional operating authority to conduct operations beyond the
commercial zones. The Agency will not grant such authority, which would
represent the start of the demonstration project, until the Inspector
General completes his report to Congress, as required by section
6901(b)(1) of the 2007 Act, and the Agency completes any follow-up
actions needed to address any issues that may be raised in the report.
As to Altshuler's comment about PASA results for carriers that were
not identified as passing the PASA in the June 8 notice, FMCSA will
publish PASA results for additional carriers in the Federal Register,
as required by section 6901.
With regard to comments about the accuracy of the information
presented in the June 8 notice, FMCSA notes that in the case of 6 motor
carriers that were identified as having passed the PASA, the Agency
inadvertently omitted ``yes'' in ``Column J--Passed Verification 5
Elements.'' All 6 motor carriers passed all 5 elements or factors
identified in the table.
On the subject of vehicle inspections, the Agency's PASA memorandum
explains the policy for conducting vehicle inspections. Auditors must
conduct an inspection on all available CMVs that have been identified
as long-haul vehicles if those vehicles have not already received a
decal required by 49 CFR 385.103(c). Therefore, there may be one or
more PASAs during which vehicles are not inspected if it has been
determined the vehicles have already been inspected and received a CVSA
decal or the vehicle is not available because it is in transportation
during the audit. The Agency emphasizes that any vehicle operated by a
Mexico-domiciled long-haul carrier that does not display a current CVSA
decal will be stopped for an inspection as it crosses the border.
Unless the vehicle passes the inspection and receives a CVSA decal, it
will not be allowed to operate in the U.S.
In response to Public Citizens' comment about carriers withdrawing
their applications, FMCSA is not aware of the reasons for these
withdrawals and, in any event, is not required to provide an
explanation why a motor carrier withdraws its application for operating
authority. Such disclosure is not required for U.S.- or Canada-
domiciled carriers and there is no reason why it should be an issue for
the demonstration project--carriers that withdraw their applications
obviously cannot participate in the project.
Section 6901(b)(2)(B)(ii)--Measures To Protect Health and Safety
General Motor Carrier Safety and Environmental Compliance Concerns
Numerous commenters expressed concern that demonstration project
participants would not comply with various safety and environmental
regulations. These commenters discussed the differences between U.S.
and Mexican regulatory requirements and also expressed a concern that
Mexican carriers will use trucks that fail to meet the standards U.S.
carriers must meet.
Advocates believe ``the substantial differences between the safety
regulatory regimes of the United States and Mexico will render many
vehicles and drivers from Mexico ill prepared to meet U.S. safety
requirements and to operate safely on U.S. highways.'' Advocates
claimed that ``Mexican regulations do not appear to require truck
drivers to keep records of their hours of service [HOS]
to show
compliance for enforcement purposes or for motor carrier safety
inspections, safety audits, or compliance reviews.''
Advocates argued that Mexican carriers would falsify applications
and CMV certifications to show compliance with U.S. regulations and
obtain U.S. operating authority.
Numerous individual commenters submitted letters asserting that
when enforcement authorities stop Mexican trucks on U.S. highways, they
find high rates of poorly adjusted brakes and inoperable lamps. Public
Citizen also made this assertion.
Three commenters expressed environmental concerns. Altshuler
pointed out that the Federal Register notice states that
``[p]articipating motor carriers will be required to comply with all
State and Federal environmental and emission regulations'' but provides
no information that would indicate that the program participants would
be able to comply with State and Federal environmental law, nor does it
reflect the establishment of any enforcement mechanisms to ensure such
compliance. Altshuler stated that FMCSA should provide detailed
information to the public and to the Federal and State environmental
agencies charged with monitoring emissions and enforcing emissions
standards as to the types, manufacturers, and model years of the
engines in the participating vehicles. Altshuler believes FMCSA also
should publish any additional information that shows that the
participating vehicles will conform to emissions standards at the time
they enter the U.S., as required by Federal law. The law firm argued
that FMCSA should explain how it intends to work with the Federal and
State environmental enforcement agencies to ensure compliance, and
should provide a plan that at a minimum requires initial emission
inspections of the participating vehicles, as well as inspections of
every vehicle that enters the U.S.
Altshuler also stated that the notice fails to provide information
sufficient to determine whether the vehicles approved for participation
in the pilot program will employ so-called ``defeat devices'' of the
kind prohibited by consent decrees entered into by the Environmental
Protection Agency, the Department of Justice, and certain engine
manufacturers. Altshuler believes FMCSA should inspect the vehicles of
participating carriers to ensure that their engines do not have defeat
devices, and should prohibit any carrier that uses vehicles with such
engines from participating in the pilot program.
Demarche expressed concern that the demonstration project's impact
on the environment will negatively affect disadvantaged communities. The

[[Page 46274]]

commenter noted that the probability for minority communities,
specifically African-Americans, to live near industrial areas is much
higher than other racial and ethnic groups. Demarche Alliance also
noted that recent studies have shown that highly concentrated minority
populations are predisposed to develop diseases related to elevated levels
of air toxins. The commenter concluded with several data illustrating the
negative environmental impacts of the demonstration project.
OOIDA believes an example of environmental considerations being
ignored is that new trucks sold in Mexico are not required to meet current
U.S. emission standards. OOIDA states that Congress clearly intends DOT
to address the environmental impacts of the demonstration project.
FMCSA Response:
The FMCSA believes commenters' concerns about adverse environmental
effects of the demonstration project are unwarranted.
First, as noted previously, Mexican carriers operating in the
United States must comply with all applicable Federal and State laws,
including those related to the environment. The FMCSA has no reason to
doubt that its sister Federal and State agencies will enforce their
laws and regulations as they apply to long-haul Mexican carriers, just
as they have done for years with respect to the commercial zone
carriers and U.S. carriers.
Second, FMCSA does not have statutory authority to enforce Federal
environmental laws and regulations. The Agency cannot, for example,
condition the grant of operating authority to a carrier on the
carrier's demonstration that its truck engines comply with EPA engine
standards. The FMCSA does not construe section 6901 as expanding the
scope of the agency's regulatory authority into environmental
regulation or any other new area of regulation. Section 6901 makes no
mention of environmental regulation, and FMCSA construes the reference
to ``measures * * * to protect public health and safety'' in section
6901(b)(2)(B)(ii) in the context of the scope of the agency's existing
statutory authority. Relatedly, because FMCSA is a safety rather than
an environmental regulatory agency, and consistent with the scope of 49
U.S.C. 31315(c), the demonstration project is appropriately focused on
evaluating the safety of long-haul Mexican truck operations in the
United States. DOT has, however, advised EPA of the demonstration
project and notified EPA that the Secretary will contact EPA toward the
end of the project to solicit any environment-related views that EPA
might have to assist her in her overall evaluation of the project.
Third, the Agency conducted an environmental review of its rules
governing the application and safety monitoring procedures for Mexico-
domiciled carriers in connection with the issuance of these rules in
2002. That review analyzed the impact of the rules on the full
implementation of the cross-border transportation provisions of NAFTA,
as authorized by the President upon his modification of the 1982
moratorium and determined that the rules were not major Federal actions
significantly affecting the quality of the human environment, a
determination that was upheld by the United States Supreme Court in
2004. These are the same rules that control carrier eligibility for
participation in the demonstration project, which contemplates only a
limited implementation of the NAFTA provisions in terms of the number
of carriers and trucks that will be permitted to operate beyond the
border commercial zones.
Finally, EPA and at least one of the border states have addressed
emissions issues related to Mexican trucks. EPA, in partnership with
Mexico and other entities on both sides of the border, is conducting
numerous diesel emissions reduction projects. These include vehicle
testing, monitoring, and tracking, diesel retrofitting, accelerated use
of ultra-low sulfur diesel fuel, and anti-idling programs. In addition,
the State of California regulates particulate matter emissions from
trucks through roadside emissions testing conducted throughout the
State, including in its border commercial zones. California has also
recently issued regulations requiring truck engines, including those in
Mexican trucks, to have proof that they were manufactured in compliance
with the EPA emissions standard in effect on the date of their
manufacture. Carriers are subject to penalties for the violation of
these regulations.
With regard to comments about safety, FMCSA believes that Mexico-
domiciled carriers are capable of complying with U.S. laws and
regulations. As explained above, there is no evidence that these
carriers are unable or unwilling to comply with U.S. requirements
simply because they operate under a different regulatory regime in
Mexico. Moreover, in concluding that the U.S. breached its obligations
under NAFTA, the NAFTA arbitration panel rejected the argument that
differences in the two nations' safety regulatory regimes justified
prohibiting all Mexico-domiciled carriers from operating beyond the
border commercial zones. As noted elsewhere in this notice, the driver
and vehicle out-of-service rates for Mexico-domiciled carriers
currently operating in the commercial zones is significantly lower than
that of U.S.-domiciled carriers. While violations are discovered,
inspection data for 2006 demonstrates Mexico-domiciled carriers are
more than capable of achieving compliance with U.S. safety requirements.
Finally, FMCSA notes that Mexico does have hours-of-service
requirements. Those requirements are discussed in detail later in the
notice. With regard to allegations that carriers will falsify
applications for operating authority and CMV certifications, the Agency
will conduct an on-site PASA for each carrier that participates in the
demonstration project. During the PASA, FMCSA auditors can assess the
motor carrier's ability to comply with U.S. safety requirements.
Looking specifically at CMV certifications (i.e., compliance with the
FMVSSs), the Agency issued an enforcement policy memorandum in 2005 to
provide guidance to Federal and State motor carrier enforcement
personnel on determining whether vehicles meet the FMVSS. A copy of the
memorandum is in the docket referenced at the beginning of this notice.
Additional information concerning the FMVSS issue is provided below.
Federal Motor Vehicle Safety Standards (FMVSS)
Advocates and ATA argued against the demonstration project
requirement that carriers certify that their vehicles have been
manufactured in accordance with the National Highway Traffic Safety
Administration's (NHTSA) FMVSS. Advocates stated that this requirement
is of little value or legal significance for two reasons. First, the
motor carrier applying for operating authority may have no knowledge of
the safety standards to which the manufacturer originally built or
manufactured a particular motor vehicle. Second, motor carriers that do
not have the relevant facts and information regarding the manufacture
of the motor vehicle have a strong incentive to falsely certify that
their vehicles meet U.S. safety standards in order to obtain operating
authority in the U.S.
Advocates argued that the FMVSS certification requirement applies
to vehicles manufactured abroad that enter the U.S. under NAFTA.
Advocates believe FMCSA's demonstration project would, without
justification or authority, contradict longstanding Federal law.

[[Page 46275]]

ATA noted that a motor carrier's responsibility is to ensure its
compliance with the FMCSRs, not with the FMVSS, and it is not the motor
carrier's responsibility to certify that a truck meets the FMVSS from a
manufacturing standpoint. ATA noted that because motor carriers and
inspection officials cannot check in-service vehicles for compliance
with many of the FMVSS, mandating certification label retention or re-
labeling accomplishes little more than creating a complex paperwork
burden. In addition, the commenter noted that FMCSA provides no specific
means by which the motor carrier must undertake such certification.
FMCSA Response:
The FMCSA has concluded that it is appropriate to require Mexico-
domiciled motor carriers to certify on their applications for operating
authority that CMVs used in the U.S. meet the applicable FMVSSs in
effect on the date of manufacture.
On March 19, 2002, FMCSA and NHTSA published four notices
requesting public comments on regulations and policies directed at
enforcement of the statutory prohibition on the importation of
commercial motor vehicles that do not comply with the applicable
FMVSSs. The notices were issued as follows: (1) FMCSA's notice of
proposed rulemaking (NPRM) proposing to require motor carriers to
ensure their vehicles display an FMVSS certification label (67 FR
12782); (2) NHTSA's proposed rule to issue a regulation incorporating a
1975 interpretation of the term ``import'' (67 FR 12806); (3) NHTSA's
draft policy statement providing that a vehicle manufacturer may, if it
has sufficient basis for doing so, retroactively certify a motor
vehicle complied with all applicable FMVSSs in effect at the time of
manufacture and affix a label attesting this (67 FR 12790); and (4)
NHTSA's proposed rule concerning recordkeeping requirements for
manufacturers that retroactively certify their vehicles (67 FR 12800).
After reviewing the public comments in response to those notices,
FMCSA and NHTSA withdrew their respective proposals on August 26, 2005.
(See FMCSA's August 26, 2005, withdrawal notice, 70 FR 50269.) NHTSA
withdrew a 1975 interpretation in which the agency had indicated that
the Vehicle Safety Act is applicable to foreign-based motor carriers
operating in the United States. Although FMCSA withdrew its NPRM, the
Agency indicated that it would continue to uphold the operational
safety of commercial motor vehicles on the nation's highways--including
that of Mexico-domiciled CMVs operating beyond the U.S.-Mexico border
commercial zones--through continued vigorous enforcement of the FMCSRs,
many of which cross-reference specific FMVSSs.
The FMCSA explained in its withdrawal notice that Mexico-domiciled
motor carriers are required under 49 CFR 365.503(b)(2) and 368.3(b)(2)
to certify on the application form for operating authority that all
CMVs they intend to operate in the United States were built in
compliance with the FMVSSs in effect at the time of manufacture. These
vehicles will be subject to inspection by enforcement personnel at
U.S.-Mexico border ports of entry and at roadside inspection sites in
the United States to ensure their compliance with applicable FMCSRs,
including those that cross-reference the FMVSSs. For vehicles lacking a
certification label, it has been determined that enforcement officials
could, as necessary, refer to the VIN (vehicle identification number)
in various locations on the vehicle. The VIN will assist inspectors in
identifying the vehicle model year and country of manufacture to
determine compliance with the FMVSS.
Based on information provided by the Truck Manufacturers
Association in a September 16, 2002, letter to former NHTSA
Administrator Jeffrey W. Runge, M.D., and former FMCSA Administrator
Joseph M. Clapp, the FMCSA believes model year 1996 and later CMVs
manufactured in Mexico meet the FMVSSs.
In 2005, FMCSA issued a policy memorandum, ``Enforcement of Mexico-
Domiciled Motor Carriers'' Self-Certification of Compliance with Motor
Vehicle Safety Standards,'' providing guidance to Federal and State
enforcement personnel on this issue. The memorandum indicated that if
FMCSA finds, during the pre-authority audit or subsequent inspections
and compliance reviews, that a Mexico-domiciled carrier has falsely
certified on the application for authority that its vehicles are FMVSS
compliant, that Agency may use this information to deny, suspend, or
revoke the carrier's operating authority or issue appropriate penalties
for the falsification. A copy of the Agency's 2005 memorandum is
included in the docket referenced at the beginning of this notice.
Although Mexico-domiciled vehicles are less likely to display FMVSS
certification labels, FMCSA believes continued strong enforcement of
the FMCSRs in real-world operational settings, coupled with existing
regulations and enhanced enforcement measures, will ensure the safe
operation of Mexico-domiciled CMVs in interstate commerce. As stated in
the 2005 withdrawal notice, enforcement of the FMCSRs, and by extension
the FMVSSs they cross-reference, is the bedrock of these compliance
assurance activities. The Agency concluded it is not necessary to amend
the FMCSRs to require commercial motor vehicles to display an FMVSS
certification label in order to achieve effective compliance with the
FMVSSs. Simply requiring CMVs to bear FMVSS certification labels would
not ensure their operational safety. The American public is better
protected by enforcing the FMCSRs than by a label indicating a CMV was
originally built to certain manufacturing performance standards.
Federal Motor Carrier Safety Regulations (FMCSRs)
Altshuler believes FMCSA has failed to provide any assessment of
whether the program has proposed safety measures that are ``designed to
achieve a level of safety that would otherwise be achieved'' through
the applicable federal laws and regulations [49 U.S.C. 31315(c)(2)].
Altshuler argued that such information, together with a full analysis
of how the proposed program will achieve the necessary levels of
safety, is a prerequisite for approval of any pilot program.
Demarche stated that many organizations and businesses believe the
standards that Mexican-based carriers must meet are not comparable to
U.S. standards, and therefore, many Mexican carriers may have unsafe
drivers and equipment. Demarche stated that if HOS compliance,
commercial driver's license (CDL) requirements, English language
proficiency, and drug and alcohol testing are not reviewed, it will
create a trucking environment that does not incorporate U.S. standards,
open potential safety risk to American citizens, and place merchandise
and goods in jeopardy of being exposed to damage or loss. Demarche
requested further research on the process for continuous safety compliance.
Public Citizen mentioned specific safety concerns regarding driver and
vehicle violations, drug and alcohol testing, HOS, and hazardous materials.
OOIDA stated that the demonstration project effectively provides
exemptions to some U.S. safety requirements for Mexico-domiciled
carriers and drivers, based on: (1) Specific statements that have been
made by DOT officials and the Federal Register notice, and (2) the
inherent impracticalities that foreign-domiciled motor carriers and
drivers face in attempting to comply with U.S. safety rules. OOIDA
noted that U.S.

[[Page 46276]]

safety regulations exist for which Mexico has no equivalent law or
regulation. In addition, OOIDA asked if any current U.S. exemptions
(i.e., oil field operations) could extend to Mexican drivers engaged in
similar cross-border endeavors. OOIDA stated that if FMCSA does not
publish answers to the specific questions asked in the OOIDA comment
letter, then FMCSA should concede that it intends to exempt Mexico-
domiciled motor carriers and drivers from certain regulations.
OOIDA also stated that there are U.S. rules for which Mexican motor
carriers and drivers will have a de facto exemption. OOIDA argued that
``blanket statements'' that Mexican carriers will be required to comply
with all U.S. rules do not adequately respond to these concerns. OOIDA
stated that the Agency's response indicates that it has not considered
all of the implications of its plan.
Advocates said that one of the most significant safety problems for
the proposal is the wide gap in approaches to motor carrier safety
between U.S. and Mexican regulations. The commenter noted that the U.S.
and Mexico have not reconciled their distinctly different regulatory
systems with respect to critical areas of safety performance, including
the basis for issuing and revoking commercial driver's licenses,
procedures for conducting drug and alcohol testing, and HOS
requirements leading to driver fatigue and the safety of passenger bus
and hazardous materials transportation. Advocates argued that there are
many well-known differences, like those between the Mexican Licencia
Federal de Conductor (LFC) and the U.S. CDL, and that the lack of
cogent information about underlying Mexican regulations and procedures
obscures many other differences.
OOIDA and Advocates stated that, even beyond the imposition of
additional requirements, it is evident that important regulatory
aspects of the FMCSRs, such as HOS and drug/alcohol testing regulations
will be substantively altered to accommodate Mexican motor carriers and
operators. As a result, the commenters said these alternative
regulatory requirements must be tested and evaluated under a pilot
program established pursuant to 49 U.S.C. 31315(c). OOIDA noted that
the June 8 Federal Register notice announced that the Agency will
accept the Mexican LFC, driver medical qualification standards, and
drug testing procedures in place of compliance with U.S. rules; this is
an admission that Mexican drivers are being exempted from compliance
with the U.S. CDL, medical qualification, and drug testing rules.
FMCSA Response:
This demonstration project does not provide Mexico-domiciled motor
carriers with exemptions from any of the Agency's regulations (or make
them eligible for any existing exemptions), nor will the project test
any innovative approaches to regulation. To the contrary, carriers
participating in the project will be subject to existing regulations,
including the regulations mandating the PASA. Additionally, because no
exemptions from or new approaches to the safety regulations are being
employed in the demonstration project, the level of safety that will be
achieved in the project is the same that would otherwise be achieved if
Mexican carriers were granted authority to operate beyond the border
commercial zones outside the context of a demonstration project or
pilot program.
As to the issue of driver's license equivalency, the Agency has
long recognized Mexico's LFC as equivalent to the CDL as a valid
substitute for the CDL and is the basis for a signed international
agreement under which the United States and Mexico have recognized each
other's commercial licenses, a decision that was upheld on judicial
review. See International Brotherhood of Teamsters v. Pe[ntilde]a, 17
F.3rd 1478 (D.C. Cir. 1994). The Agency has also long recognized
Mexico's physical qualification standards and the controlled substances
and alcohol collection procedures to be applied if participants in the
demonstration project choose to have collections conducted \8\ in
Mexico. These are not exemptions, but well-established alternative
means of meeting U.S. standards that pre-date the demonstration project.
---------------------------------------------------------------------------

\8\ To date, all Mexico-domiciled carriers that have passed the
PASA are sending their drivers to the U.S. for controlled substance
testing collections.
---------------------------------------------------------------------------

While certain commenters argue that the Agency is unknowingly
providing relief, those commenters have not supported their assertions
with any specific facts. These arguments appear to be based simply on
the recurring but unsupported presumption that given the absence of
certain regulatory requirements in Mexico, and certain differences
between U.S. and Mexico safety requirements, Mexican carriers are
unwilling or unable to achieve full compliance with U.S. safety
requirements. As explained above, the Agency finds no substance to that
argument. The FMCSA's regulations issued pursuant to section 350 make
it clear that Mexico-domiciled motor carriers are subject to very
strict safety oversight. The requirements of the implementing
regulations are applicable regardless of what actions the government of
Mexico takes--all long-haul Mexico-domiciled motor carriers must comply
with all applicable U.S. requirements, and FMCSA has no reason to
believe that these carriers are any less capable of complying with
these requirements than are the commercial zone carriers currently
operating in the United States. Any Mexico-domiciled motor carrier that
intends to operate in the U.S. must comply with our rules in order to
operate in the United States beyond the border commercial zones. If the
carrier violates the operating authority rules, its vehicles will be
placed out of service when they reach the U.S.
Federal and State officials' experience since 1995 demonstrates
Mexico-domiciled carriers are capable of complying with U.S. safety
requirements when there is strong enforcement. The fact that Mexico has
different safety regulations does not mean carriers based there cannot
comply with U.S. requirements. This assumption was proven false years
ago with Canada-based motor carriers entering the U.S., and continues
to be without merit.
The May 1 and June 8 notices describe in significant detail the on-
site PASAs for each eligible carrier and the requirement that only
those carriers that successfully complete the PASA will be allowed to
operate in the demonstration program. The PASA provides FMCSA the
opportunity to have Federal staff review Mexico-domiciled carriers'
safety management controls at the carrier's place of business, and to
verify the carrier has in place the controls to achieve full compliance
with FMCSA's regulations. The public record thus documents the Agency's
approach for ensuring that Mexico-domiciled motor carriers comply with
all applicable regulations. While commenters may disagree with the
approach, none provided any information showing that FMCSA's approach
will not be effective, or that there are practical alternatives.
Moreover, the regulations creating the PASA were issued in 2002 and
have already been subject to public notice and comment and judicial review.
Driver Safety and Compliance Issues
Advocates expressed concern that Mexico-domiciled drivers would be
``ill prepared'' to meet U.S. safety requirements and operate safely on
U.S. highways. For example, said Advocates, ``The regulations governing
driver maximum hours of service

[[Page 46277]]

requirements, are apparently substantively different in the U.S. and
Mexico.'' Advocates argued that in Mexico there is no requirement for a
truck driver to keep records of driving time. Advocates do not believe
Mexico has ``regulatory regimes'' comparable to the U.S. for alcohol
and drug testing and commercial operating licensing. Advocates argue
``FMCSA does not state in the project notice that all participating
drivers at the start of the Demonstration Project will have received
pre-employment or random controlled substances tests.'' Advocates also
believe the demonstration project will not hold drivers to account
through random drug and alcohol tests.
Advocates also expressed concerns about entry-level driver
training. Advocates noted that FMCSA does not indicate whether
participating Mexico-domiciled drivers would be required to take the
minimal training requirements for properly observing HOS that the
Agency required for entry-level drivers operating in the U.S. Advocates
argued that the Agency has failed to require any entry-level driver
training compliance as part of the demonstration project.
Public Citizen listed several minimum safety requirements it said
Mexico-domiciled carriers would violate. These included drivers
operating in violation of out-of-service orders, without a license or
with an inappropriate license, or without HOS records of duty status
(RODS). Like Advocates, Public Citizen also asserted that Mexico does
not require driver drug or alcohol testing, nor, said Public Citizen,
does Mexico have a certified laboratory for evaluating samples.
FMCSA Response:
The FMCSA is not aware of any evidence that drivers employed by
Mexico-domiciled motor carriers are unable or unwilling to comply with
applicable U.S. safety regulations. Again, the border commercial zone
experience is instructive: As is the case with truck out-of-service
rates, the driver out-of-service rate for commercial zone drivers
(1.29% in 2006) is below the rate for U.S. drivers (7.67% in 2006).
While it is well understood that Mexico's safety regulations differ
from those in the United States, FMCSA's position is clear--Mexico-
domiciled drivers must comply with all applicable American safety
regulations in the U.S. while participating in the demonstration
project. This is the same approach that has been used by the Agency in
dealing with drivers employed by Canada-domiciled motor carriers. For
example, Mexico does have hours-of-service requirements, including a
rule for records of duty status (RODS), and there is a requirement for
drug testing. Although the standards in Mexico are different from those
in the U.S. those differences do not suggest that Mexico-domiciled
carriers are unable or unwilling to comply with U.S. requirements. The
FMCSA will not extend any exemptions to Mexico-domiciled drivers
involved in the project. The FMCSA has not extended any exemptions to
Mexico-domiciled drivers operating in the commercial zones, or to
Canada-based drivers operating in the U.S. and there is no reason to do
so for drivers participating in the demonstration project.
The FMCSA has provided educational and outreach material to the
Mexican government and industry representatives to ensure they have
access to the most up-to-date information about the U.S. requirements.
A copy of some of this material is included in the docket referenced at
the beginning of this notice. However, the responsibility for preparing
individual drivers to operate in the U.S. rests with the employer. The
FMCSA will assess each participating motor carrier's safety management
controls during the PASA to ensure that all participating drivers are
prepared to achieve full compliance with U.S. safety requirements. The
Agency will continue to monitor the participating carriers' safety
performance through roadside inspection results.
With regard to Advocates' comments about entry-level driver
training, FMCSA does not interpret 49 CFR 380.501 as applying to
Mexico-domiciled drivers. Section 380.501 is applicable to all entry-
level drivers who drive in interstate commerce and are subject to the
CDL requirements of 49 CFR part 383. Because the Agency has determined
that the Mexican commercial license is equivalent to a State-issued
CDL, Mexico-domiciled drivers are not required to obtain a CDL issued
in the U.S. Consequently, the entry-level driver training rules, like
other CDL qualification requirements, do not apply to Mexico-domiciled
drivers. (The same is true for Canadian drivers.) Mexico-domiciled
drivers are subject to certain other requirements under 49 CFR part
383, specifically driver disqualifications rules, but not the
requirement to hold a State-issued CDL.
The FMCSA contacted the Mexican government to gather information
about driver training standards in Mexico. The Agency was advised that
in order to obtain a Licencia Federal de Conductor (Mexico's CDL), a
driver must prove his driving qualifications with a training
certificate from an accredited training center or by passing a test
administered by the General Directorship of Federal Motor Carrier
Transportation (DGAF)--FMCSA's counterpart--of the Secretariat of
Communication and Transportation (SCT--U.S. DOT's counterpart). The
DGAF established the guidelines for accreditation as an authorized
commercial driver training center. DGAF also established commercial
driver minimum training requirements that such training centers must
comply with. DGAF implemented a Web based information system for the
communication with and control of these training centers. The training
centers report attendance and testing results via this information
system. Interested parties may access the list of SCT accredited training
centers at: http://dgaf.sct.gob.mx/index.php?id=468
by clicking on DIRECTORIO DE CENTROS DE CAPACITACION.
The DGAF-SCT indicated that its intent is that all drivers go
through the training to obtain and renew their LFC. To date however,
there are not enough training centers available yet to make the
training mandatory. Only the Mexico City DGAF field office and the DGAF
licensing offices in the states of Nuevo Leon, Tamaulipas and Queretaro
make it mandatory to go through the training for the two-year renewals
only. The rest of the 46 field offices allow the test only option to
the training certificate. The DGAF test is automatically generated from
a pool of over 600 questions in a similar manner to the tests used in
the U.S. States.
The minimum training requirements establish a minimum curriculum
and time both in the classroom and on vehicle/simulator. The amount of
hours depends on the class of license (bus, straight truck, vehicle
combination, hazmat) and whether it is an issuance or renewal.
Inadequate Databases for Tracking Driver History
Several commenters discussed whether the U.S. and Mexico maintained
databases sufficient for the demonstration project. Many commenters
believe the Mexican government has no database with information on
carrier and driver history. Several commenters said many U.S. States
failed to update the Commercial Driver's License Information System
(CDLIS). Commenters also doubted the accuracy of the Licencia Federal
de Conductor Information System.
Advocates expressed general concerns regarding CDLIS, noting that
FMCSA is ``in the midst of an effort to reform and

[[Page 46278]]

upgrade CDLIS, so firm reliance on this database at the present time is
not possible.'' It said FMCSA did not provide any assurances that CDLIS
will be ``complete, timely, and reliable as a source for licensing and
violations status of commercial drivers.'' Commenting on FMCSA's use of
Mexican data systems, Advocates noted that the Inspector General
``found in 2005 that 67 percent of Mexico-domiciled motor carriers had
not submitted updated census forms, 51 percent of the carriers reported
having no power units, and 52 percent reported that they had no drivers.''
Advocates indicated that some U.S. States were unable to send
Mexican driver convictions to FMCSA's database and that some States
underreported driver convictions. Advocates cited the DOT Inspector
General's March 8, 2007 testimony that there are continuing
inadequacies in driver records databases and that one of three
databases with traffic convictions of Mexico-domiciled commercial
drivers is incomplete. Advocates reported the Inspector General's
finding of a ``precipitous drop in traffic conviction data from Texas''
because that State stopped entering this information in the database,
and similar shortcomings for conviction data reporting from New Mexico,
Arizona, and California.
Altshuler believes FMCSA failed to meet the requirements in section
350 calling for an accessible database with sufficiently comprehensive
data to monitor all Mexico-domiciled commercial driver traffic
convictions in the U.S. Public Citizen also wrote that States lack data
``on driver convictions and license suspensions.'' Public Citizen
asserted that U.S. States are unprepared to place Mexico-domiciled
drivers and vehicles out of service, that those authorities responsible
already underreport violations, and that these authorities likely would
underreport violations in implementing FMCSA's proposed action.
The Teamsters noted ``the decision that the Transportation Security
Administration (TSA) took with regard to the Mexican criminal data base
in issuing regulations to administer the Free and Secure Trade (FAST)
commercial driver card.'' The Teamsters asserted that the TSA used the
U.S. criminal database to perform criminal background checks on Mexican
drivers who haul hazardous materials into the U.S. because TSA found
the ``Mexican criminal database was incomplete and not easily accessible.''
FMCSA Response:
The FMCSA has satisfied the requirement of section 350(c)(1)(G)
concerning an accessible database containing sufficiently comprehensive
data to allow safety monitoring of carriers operating beyond the
commercial zones and their drivers. Looking specifically at driver
monitoring, in 2002 FMCSA established the 52nd State System, which
serves as the repository of the U.S. conviction history on Mexican CMV
drivers. The system allows FMCSA to disqualify such drivers if they are
convicted of disqualifying offenses listed in the FMCSRs.
The system is integrated into the Agency's gateway to CDLIS such
that when enforcement personnel perform a Mexican CDLIS-Check, the
gateway simultaneously queries both the Mexican Licencia Federal
Information System (LIFIS) and the 52nd State System. The response is a
single consolidated driver U.S./Mexican record showing the driver's
status from the two countries' systems.
The States also have the capability to forward U.S. convictions of
Licencia Federal holders, and other drivers from Mexico, to the 52nd
State System via CDLIS. To accomplish this, the States implemented
changes to their information systems and tested their ability to make a
status/history inquiry and to forward a conviction to the 52nd State
System. All States (except Oregon, which does not transmit convictions
electronically) and the District of Columbia have successfully tested
forwarding convictions electronically on Mexican CMV drivers. Both
these jurisdictions can transmit the information manually to FMCSA for
uploading into the system.
As of June 13, 2007, 26,457 convictions were transmitted to the
52nd State System by the border States between 2002 and 2007. Of that
number, 21,712 were transmitted electronically and 4,745 were manually
entered into the system. It should be noted that only 667 of these
convictions were for major traffic offenses (listed in 49 CFR 383.51(b)),
and 16 were for serious traffic offenses (listed in 49 CFR 383.51(c)).
The conviction data show that the system does work and that States
can both transmit the conviction data on Mexico-domiciled drivers and
query the system to retrieve conviction data. The FMCSA and its State
partners have experience from providing safety oversight for Mexico-
domiciled drivers currently operating in commercial zones. It is
unreasonable to believe that the small group of drivers who would be
involved in the demonstration project will be more difficult to monitor
than the much larger population of Mexico-domiciled drivers currently
allowed to operate in the U.S. commercial zones.
With regard to the Teamsters' comment about TSA's FAST program,
FMCSA emphasizes that motor carriers participating in the demonstration
project are not allowed to transport hazardous materials. Therefore,
none of the drivers participating in the project are required by TSA to
be enrolled in the FAST program for a background records check required
by the FAST program. The FAST program background check is similar to
that required of commercial motor vehicle drivers licensed in the
United States to transport hazardous material in commerce. This
requirement is enforced by the Department of Homeland Security, not FMCSA.
In response to Advocates' comment about data from Texas, FMCSA has
worked with the State to resolve the issue. Because the 52nd State
system generates a monthly tracking report, FMCSA was aware that Texas
had stopped entering the driver conviction information in the database.
Once FMCSA became aware of the situation, FMCSA worked with the State
to ensure the backlog of driver conviction information was uploaded.
Presently, the 52nd State system in Texas is current with conviction
data and conviction data is now uploaded electronically.
Driver's License Documentation Concerns
Many individuals submitted letters asserting that drivers could
obtain fake licenses in Mexico.
FMCSA Response:
The FMCSA does not believe there is a significant risk that Mexico-
domiciled drivers could operate in the demonstration project with
falsified driver's licenses.
First, during the PASA, FMCSA reviews the Mexico-domiciled
carriers' records at their place of business in Mexico. The Agency
identifies all drivers the carrier intends to use in the demonstration
project so that appropriate reviews of their background and safety
performance can be completed prior to making a determination whether
the carrier will successfully complete the PASA. Participating carriers
may add new drivers after the PASA has been completed; drivers whose
files were not reviewed during the PASA will still receive a license
check at the border.
Second, the FMCSA will check the status of every driver in the
demonstration program at the U.S.-Mexico border, every time the driver
enters the United States. This process

[[Page 46279]]

will ensure that only those drivers who have been issued a license by
the appropriate authorities in Mexico may operate commercial vehicles
in the U.S. As discussed earlier in this notice, the FMCSA has
established a 52nd State System that enables FMCSA and its State
partners to check the Mexican government's database of LFC holders to
verify the status of the license.
As is the case for U.S. drivers, while a false license document may
be generated, there will no electronic record of that license in the
government database making the falsified document easy to discover
during an electronic license check. The FMCSA and its State partners
must check at least 50 percent of Mexico-domiciled drivers' licenses as
they cross the border to comply with the requirements of section 350 of
the 2002 DOT Appropriations Act. The Agency has announced its intention
to exceed the statutory requirement by checking all drivers
participating in the demonstration project.
CDL and LFC Verification Issues
DOT determined in November 1991 that the Mexican Licencia Federal
de Conductor is issued in accordance with requirements equivalent to 49
CFR part 383 and that the holder of an LFC would be allowed to operate
in the U.S. on the same basis as the holder of a CDL. The U.S. and
Mexican governments entered into a Memorandum of Understanding to this
effect. OOIDA noted that there have been important substantive changes
to U.S. CDL requirements since then. These include the mandatory
disqualification for violations of out-of-service orders (59 FR 26022,
May 18, 1994), disqualification for violations of railroad highway
grade crossing rules (64 FR 48104, Sept. 2, 1999), and disqualification
for violations of specific laws in noncommercial vehicles (68 FR 4394,
Jan 29, 2003). The commenter said the nearly 16 year-old assessment of
their equivalency is not current or reliable.
OOIDA said the June 8 notice states in Table 1 that the Mexican
license ``can'' be cancelled under several circumstances. OOIDA noted
that U.S. CDL disqualification is mandatory in specific circumstances,
and Table 1 implies that the license cancellation rules are
discretionary in Mexico. OOIDA concluded that this table does not
demonstrate how Mexican license rules for cancellation provide for at
least the same level of safety as the U.S. CDL disqualification rules.
OOIDA added that the notice states that FMCSA will verify each
driver's qualifications, including confirming the validity of each
driver's LFC. OOIDA had serious concerns about the limits of the
databases available to check the qualification of Mexico-domiciled
drivers. The commenter said the Mexican Licencia Federal Information
System (LIFIS) does not contain all traffic conviction data occurring
in Mexico, and conversations with representatives from the Los Angeles
District Attorney's Office indicate the lack of any accessible Mexican
database regarding criminal history information. OOIDA has learned that
moving violations recorded in LIFIS are violations or incidents that
occur only on Mexican federal highways, not local highways or roads. If
true, the commenter said this system fails to record accurately an
undetermined amount of violations and incidents committed by drivers
that could disqualify them from operating within the U.S. without a
detailed and systematic safety analysis. The commenter argued that
without the ability to verify accurately traffic conviction and
criminal history records of Mexican commercial license holders, U.S.
officials do not have the same ability to enforce Mexican driver
compliance with U.S. CDL rules and a violation of the 1991 CDL MOU
arguably exists.
Furthermore, OOIDA stated that the lack of a database containing
the background of Mexican drivers that is as complete or reliable as
the databases available about U.S. drivers creates a double standard.
The commenter explained that U.S. drivers are held to a higher standard
because of the availability of databases, such as CDLIS, NLETS, and
NDR, which contain more comprehensive and accurate histories of
individuals than any information available about Mexican drivers. The
commenter noted that Congress has authorized funds to address the
problem of drivers effectively ``masking'' their traffic conviction
history by obtaining CDLs in different states, but OOIDA has no
information as to whether Mexico has made similar efforts. The
commenter said this issue is crucial because the FMCSRs contain
provisions that disqualify a driver based upon certain traffic
violations, including those which occur in a driver's personal vehicle.
Similarly, the Teamsters noted that under the Motor Carrier Safety
Improvement Act of 1999, U.S. drivers are subject to CDL
disqualification for serious driving violations occurring in their
personal vehicle. The commenter argued that, in fairness, these same
regulations should apply to Mexican drivers operating in the U.S.
Advocates said the declared equivalence of the LFC and the U.S. CDL
is an alternative regulation to the U.S. CDL requirements because
anecdotal information indicates that all LFC holders are automatically
qualified to transport hazardous materials, and some types of the LFC
allow mixed transportation of both freight and passengers, among other
differences. The Agency is imposing ``a system for monitoring the
performance of Mexican drivers while in the U.S. and taking steps to
disqualify these drivers if they incur violations that would result in
a U.S. driver's license being suspended.'' The commenter stated that
this includes violations in a non-CMV that results in suspension or
revocation of a non-CMV license of a U.S. commercial driver, a
violation that may not exist in Mexico.
ODOT stated that it has recently encountered drivers that hold both
a Mexico-issued LFC and a U.S.-issued CDL. ODOT indicated it is unclear
what enforcement action, if any, is appropriate and the Commercial
Vehicle Safety Alliance (CVSA) Out-of-Service Criteria are silent on
this matter. ODOT believes the States need an answer to two questions:
(1) what is the appropriate action when a driver is found to possess
both a Mexican and U.S. driver license; and (2) what is the appropriate
action when a driver is found with two licenses and one is suspended?
FMCSA Response:
The determination of LFC/CDL equivalency pre-dates the
demonstration project by more than 15 years, is memorialized in a
binding agreement between the United States and Mexico, and has helped
ensure the safe operation of Mexican trucks in the border commercial
zone by Mexican drivers. The demonstration project is not the
appropriate context for any reconsideration of that determination.
U.S. CDL regulations have been amended since 1991, as OOIDA noted,
mainly by the adoption of new disqualification provisions. However,
none of those changes affects the validity of the decision by the U.S.
and Mexico to recognize each other's commercial licenses. Both parties
understood that their respective regulatory systems differed in certain
respects. The agreement simply recognized that the knowledge, skills,
and other prerequisites for obtaining a commercial license were
equivalent in the U.S. and Mexico, and that each nation should
therefore accept the other's license as valid for operating a CMV.
Neither party agreed in 1991 that it would adopt the same enforcement
or disqualification standards, or assess the

[[Page 46280]]

same penalties. The differences between the standards and penalties
enforced in the U.S. and Mexico are simply irrelevant to the continued
validity of the 1991 agreement.
The Teamsters, OOIDA and others have misunderstood FMCSA's
statement that Mexico-domiciled drivers and carriers will be subject to
the same standards as U.S. drivers and carriers. This does not mean, as
their comments suggest, that U.S. standards must be applied to Mexican
drivers and carriers operating in Mexico. The Teamsters, for example,
seem to believe that FMCSA should disqualify Mexican drivers from
operating in the U.S. for violations committed in their personal
vehicles (non-CMVs) in Mexico if the Agency would disqualify a U.S.
driver who committed the same violation in a non-CMV in this country.
In an argument summarized earlier in this notice, Altshuler claimed
that failure to disqualify a Mexican driver under these circumstances
would constitute an exemption under 49 U.S.C. 31315(b) which would
require further notice and comment on that point before the
demonstration project could proceed. It would also contradict FMCSA's
assurances that Mexican carriers and drivers will be held to the same
standards as their U.S. counterparts.
The FMCSA cannot grant an exemption under section 31315(b) unless
it first has jurisdiction over the driver, carrier or vehicle. The
Agency has no authority to apply U.S. standards to driver or carrier
actions in Mexico, i.e., it has no extraterritorial jurisdiction to
enforce FMCSA rules. If Mexico chooses to suspend or revoke a driver's
LFC for violations committed in a non-CMV in Mexico, Licencia Federal
Information System (LIFIS) will reflect that fact and FMCSA will refuse
to let the driver operate in this country. As a condition of
participating in the demonstration project, Mexican carriers must use
qualified drivers. The FMCSA, however, cannot disqualify an LFC-holder
for acts occurring in Mexico because those actions do not violate 49
CFR part 383, which does not apply in Mexico. Despite Altshuler's
argument, FMCSA has not granted an exemption pursuant to section
31315(b) or (c) when it fails to apply to Mexican drivers operating in
Mexico the same standards it applies to U.S. drivers operating in the
U.S. The Agency does not have universal jurisdiction. But FMCSA will
not grant exemptions from its regulations where it has jurisdiction to
enforce those regulations, i.e., on U.S. territory.
As for OOIDA's comment regarding alleged deficiencies in Mexico's
criminal history database, it is not apparent why that is relevant to
the demonstration project. U.S. drivers applying for a hazardous
materials endorsement to a CDL are required by Transportation Security
Administration (TSA) regulations to undergo a security threat
assessment which includes a criminal history records check (49 CFR part
1572). TSA has accepted as equivalent to a threat assessment under part
1572 the background check performed by the Bureau of Customs and Border
Protection (CBP), Department of Homeland Security (DHS), on Mexican and
Canadian hazmat drivers seeking a Free and Secure Trade (FAST) card in
order to obtain expedited processing at U.S. borders (71 FR 44874,
August 7, 2006). However, vehicles transporting hazmat are not allowed
to participate in the demonstration project. Neither FMCSA nor TSA
require criminal background checks of CDL drivers who do not seek a
hazardous materials endorsement.
All drivers operating CMVs in the U.S. are subject to the same
driver disqualification rules, regardless of the jurisdiction that
issued the driver's license. The driver disqualification rules apply to
driving privileges in the U.S. Any convictions for disqualifying
offenses that occur in the U.S. will result in the driver being
disqualified from operating a CMV for the period of time prescribed in
the Federal Motor Carrier Safety Regulations.
With regard to ODOT's comments, if a State licensing agency
determines that an individual holds an LFC, the State should decline
the driver's application for a CDL. If a State enforcement official
discovers an individual with an LFC and a State-issued CDL, the
official should cite the individual for violation of the State's
regulation corresponding to 49 CFR 383.21, concerning the Federal
prohibition against CMV operators having more than one driver's
license. The State enforcement agency should also immediately notify
FMCSA and the State licensing agency that issued the CDL so that
appropriate actions can be taken to prevent the individual from
continuing to operate with two commercial licenses. The FMCSA will
report these activities to the Mexican government so that appropriate
actions can be taken in Mexico.
Electronic Data Collection and Analyses
Advocates, the Teamsters, Parfrey Trucking Brokerage, and OOIDA
argued that Mexico has incomplete driver history databases to monitor
the Mexican carriers.
The Teamsters argued that Mexican criminal databases are incomplete
and not easily accessible, and could be the reason that FMCSA did not
include hazardous material drivers in the demonstration project. OOIDA
believes the Mexican LIFIS does not contain all traffic conviction data
occurring in Mexico. OOIDA also questioned how broad, up-to-date, and
trustworthy the Mexican database will prove. They also argued that
without a full enforcement history or driver criminal history for
Mexican carriers, FMCSA could not verify that Mexican drivers are
eligible under U.S. CDL or hours-of-service rules. OOIDA and Parfrey
Trucking asked about Federal and State law enforcement's access to the
Mexican driver database.
Some of the commenters believe the U.S. database for the
demonstration project has flawed data collection measures. Advocates
and Public Citizen commented that some U.S. States, particularly border
States, do not or cannot report all Mexican carrier violations and
convictions to the Federal database.
FMCSA Response:
As discussed earlier in this notice, the FMCSA has established a
52nd State System which enables States to capture conviction data on
Mexico-domiciled drivers and to access information about the status of
LFC holders. The conviction data presented previously provides evidence
that convictions have been uploaded from the States, with Texas
recording 25,755 convictions since the system was established in 2002.
Therefore, the Agency believes that the 52nd State System provides an
effective means for monitoring the safety performance of Mexico-
domiciled motor carriers while they are operating under the
jurisdiction of FMCSA and the States. The Agency has disqualified
Mexico-domiciled drivers based on convictions for disqualifying
offenses listed in 49 CFR 383.51 that occurred in the U.S.
As mentioned above, U.S. regulations do not require such criminal
background checks as a prerequisite for obtaining a CDL, unless the
driver applies for a hazardous materials endorsement. Because none of
the carriers participating in the demonstration project are allowed to
transport hazardous materials, their drivers are not required to obtain
a hazardous materials endorsement. The condition of Mexican criminal
databases is irrelevant to the demonstration project. What matters is
that FMCSA has established from queries of the LIFIS database, that the
Government of

[[Page 46281]]

Mexico maintains accurate information regarding the status of drivers'
licenses.
Hours of Service (HOS)
Several Commenters expressed concern that the less stringent duty-
time standards in Mexico will result in fatigued drivers entering the
U.S. Commenters also asserted that Mexican drivers will be
inexperienced in keeping hours-of-service logbooks in compliance with
FMCSA's HOS regulations.
Advocates and OOIDA stated that Mexico has no specific or
comparable HOS requirements for commercial drivers and that compliance
and enforcement are questionable. Advocates argued that if FMCSA
requires a participating truck driver to maintain 7 previous days of
records of duty status (RODS) and make it available for inspection
while on duty, as required in Part 395, then the Agency has an
obligation to be able to corroborate the accuracy of entries made in
the logbook. However, if there are no comparable commercial driver RODS
required and enforced in Mexico and the veracity of a Mexican truck
driver's RODS for the prior 7 days cannot be validated by U.S.
enforcement officials, Advocates argue that accepting Mexican driver
RODS for operations in Mexico is a regulatory alternative to U.S. HOS
requirements.
Furthermore, Advocates said FMCSA does not explain how Mexican
drivers who are not subject to the requirements for RODS or logbooks in
their home country can expect to keep appropriate records in compliance
with the FMCSA's HOS requirements. Advocates concluded that Mexico-
domiciled drivers would not be able to meet the U.S. HOS recordkeeping
requirements that include verification of hours of work, hours of
driving, and hours of off-duty time.
The Teamsters stated that there has not been any real enforcement
of any HOS regulations in Mexico, beyond the recent requirement of
drivers having to carry logbooks. The Teamsters indicated that FMCSA
and DOT can demand paper records, but without enforcement, those
records are suspect.
Public Citizen stated that commercial vehicles entering the U.S.
from Mexico should have electronic on-board recorders installed to
ensure that drivers entering the U.S. have some record of HOS, by which
compliance with U.S. HOS regulations can be determined.
FMCSA Response:
The FMCSA requires that all motor carriers operating commercial
motor vehicles within the United States comply with the applicable HOS
requirements. The Agency acknowledges that Mexican HOS requirements are
different. However, it does not follow as a matter of law or logic that
Mexico-domiciled carriers have thus been effectively exempted from the
applicable Federal requirements, or have been given an alternative to
those requirements, when those carriers are operating in the U.S.
In March 2000, the Mexican government amended its regulations to
require the use of records of duty status (RODS) or logbooks by all
drivers working for motor carriers authorized to operate on Federal
roads in Mexico. Prior to the 2000 amendment, RODS were only required
of drivers transporting hazardous materials.
The minimum information that must be recorded in the RODS is as follows:
1. The motor carrier's name and address;
2. Motor carrier service classification;
3. Vehicle make/year/license plate tag;
4. RODS completion date;
5. Driver name;
6. Driver license number and expiration date;
7. Origin/destination/route;
8. Hours for departure/arrival/driving/on-duty without driving;
9. Exception cases when driver may exceed hour-of-service limits;
and,
10. Driver and carrier representative signatures.
Under Mexican labor law, drivers daily hours of service are limited
to 8 hours for the day shift (6 a.m.-8 p.m.), 7 hours for the night
shift (8 p.m.-6 a.m.) and 7.5 hours for a mixed shift. During a
continuous work day, workers must rest for at least one half hour and
if the worker cannot leave the workplace for rest or meal breaks, the
corresponding time must be counted as part of the hours of service.
Drivers may accumulate daily overtime of up to three hours, but only
three times a week (maximum 9 hours per week total). Drivers must be
paid double their hourly rate for overtime.
DGAF and General Directorship of Protection and Preventive Medicine
in Transportation (DGPMPT) inspectors, with the assistance of the
Federal Preventive Police (PFP), enforce Mexico's driver hours-of-
service logbook regulations. Drivers are required to carry the hours of
service logbooks for the last seven days. DGPMPT physicians inspect
drivers for fatigue symptoms at terminals and the roadside. At the
carrier site, DGAF inspectors audit carrier drivers' logbooks for the
last 60 days during a carrier compliance review.
Based on the information above, FMCSA believes it is reasonable to
conclude that Mexico-domiciled drivers are capable of complying with
U.S. hours-of-service requirements, including the requirement to
maintain a RODS.
Mexico-domiciled drivers operating in the U.S. must be able to
produce upon the demand of a Federal or State enforcement official, an
up-to-date record of duty status (RODS) or ``log book'' that accounts
for the duty status for the current day, and the previous 7 days,
unless the driver is covered by the 100 air-mile radius exception under
49 CFR 395.1(e)(1), an exception that applies to drivers of all
carriers, foreign and domestic. The RODS must cover the required time
periods even if the driver was operating in Mexico during those
periods. Federal and State enforcement personnel inspect the RODS
during roadside inspections, including inspections at ports of entry,
and during on-site reviews at motor carriers' facilities. The FMCSA
will have information from the on-site PASAs to determine whether the
100 air-mile radius exception applies to the participating carriers'
employees expected to drive in the demonstration project. If the
exception applies, the Agency can assess whether the carrier has the
necessary documentation to verify work schedules of the drivers. If the
exception does not apply, the Agency expects that the carrier will
maintain RODS and supporting documents, to ensure compliance with the
HOS rules while operating in the U.S. Supporting documents, such as
fuel receipts, toll receipts, shipping papers, etc., with information
concerning the date, time and locations at which certain activities
have taken place can be compared with the RODS to verify the accuracy
of the entries in the logbook.
The FMCSA emphasizes that the Agency and its State partners have
extensive experience enforcing the HOS rules for U.S. carriers and
Mexico-domiciled carriers currently authorized to operate in the
commercial zones. Appropriate enforcement actions will be taken against
participating drivers if they are found to be in violation of the HOS
rules during roadside inspections.
In light of the applicability and enforcement of the existing HOS
rules as explained above, FMCSA finds no justification for singling out
Mexican carriers by requiring them to install electronic on-board
recorders to help verify driver hours, something that is not required
of U.S. and Canadian carriers.
While the May 1 notice did not specifically discuss training of
Mexico-domiciled carrier officials and drivers to

[[Page 46282]]

ensure they understand the applicable Federal safety requirements, the
FMCSA worked with the Mexican motor carrier industry to provide
training concerning U.S. requirements following the publication of the
Agency's March 2002 rulemakings mentioned previously in this notice.
Controlled Substances and Alcohol Testing
Many commenters asserted that Mexico does not require drug or
alcohol testing for drivers. Several commenters said drug and alcohol
testing labs in Mexico are inaccurate. Others said there are no
certified laboratories in Mexico for drug and alcohol testing.
Commenters also wrote that border checks would be less effective than
random drug tests.
Advocates wrote that there are numerous references in the FMCSRs to
workplace ``controlled substances [drug and alcohol]
testing, including
training for specimen collectors, oversight of the collection site and
its equipment, and maintenance of the chain of custody ensuring that
specimens are valid and accurately indexed to each worker.'' Advocates
argued that FMCSA failed to specify in the May 1 notice whether
participating drivers would have received pre-employment or random
controlled substances tests. Public Citizen wrote that Mexico has no
laboratories certified to perform drug and alcohol testing, and that
the situation would hinder FMCSA's ability to conduct random drug and
alcohol use reviews.
Advocates also questioned whether drug tests at the border would be
effective. The commenter asserted, ``[I]f the alternative procedure of
sample collection at the border is permitted, Mexican drivers will know
in advance that a drug/alcohol test may be required on entry into the
U.S.'' Advocates said the driver may predict and control testing, a
circumstance at odds with the goal of surprise, random workplace testing.
FMCSA Response:
There is no basis for the commenters implicit assumptions that
Mexico-domiciled long-haul carriers are any less capable of complying
with the applicable Federal requirements than their border commercial
zone counterparts are.
The FMCSA's rules required controlled substances and alcohol
testing for foreign-based carriers beginning on July 1, 1997. If an
employer began its highway transportation operations in the U.S. after
July 1, 1997, it must begin its testing program on the day the employer
begins operations in the U.S. Therefore, the Agency has extensive
experience enforcing the controlled substances and alcohol testing
rules on Mexico-domiciled motor carriers operating in the commercial
zones as well as Canadian carriers that are also not required to have
pre-employment or random drug tests under Canadian regulations.
Mexico-domiciled carriers must have a testing program that provides
pre-employment controlled substances testing for all drivers who will
be assigned to operate CMVs in the U.S. Mexican drivers participating
in the demonstration project are subject to pre-employment controlled
substances testing if they have not previously operated in the U.S.
(i.e., as drivers operating in the border zones), and are not currently
covered by a controlled substances testing program that meets U.S.
requirements.
The program must also provide random controlled substances and
alcohol testing, post-accident controlled substances and alcohol
testing for certain crashes that occur in Mexico during trips to the
U.S., while operating in the U.S., and in Mexico during trips from the
U.S.\9\ Drivers who test positive must follow the instructions provided
by substance abuse professionals that meet U.S. requirements, undergo
return-to-duty testing, and the required follow-up testing regime.
---------------------------------------------------------------------------

\9\ On April 4, 1997 (62 FR 16369), the Federal Highway
Administration published ``Regulatory Guidance for the Federal Motor
Carrier Safety Regulations.'' The guidance explains the post-
accident alcohol and drug testing requirements for foreign drivers
involved in crashes occurring outside the United States.
---------------------------------------------------------------------------

Because there presently are no U.S.-certified collection facilities
and laboratories in Mexico, Mexico-domiciled long-haul carriers must
comply by using collection facilities and certified laboratories in the
United States, just as their border commercial zone counterparts have
done for a decade. For example, drivers selected for random controlled
substances tests would be notified after they enter the U.S. to report
to a designated collection site in the commercial zones where there are
assurances that the requirements of 49 CFR Part 40 would be fulfilled.
The specimens would then be forwarded to a certified laboratory in the
United States, and the results processed in accordance with Federal
requirements. Drivers who refuse to report to the collection facility
in a timely manner would be considered to have refused to undergo the
required random test, and the motor carrier would be required to address
the issue in accordance with the requirements under 49 CFR Part 382.
Currently, Mexico-domiciled drivers operating within the commercial
zones may use this approach to fulfill the random testing requirements
of 49 CFR 382.305. The selection of drivers must be made by a
scientifically valid method, each driver selected for testing must have
an equal chance (compared to the carrier's other drivers operating in
the U.S.) of being selected, and drivers must be selected during a
random selection period. Also, the tests must be unannounced and the
dates for administering random tests must be spread reasonably
throughout the calendar year. Employers must require that each driver
who is notified of selection for random testing proceeds to the test
site immediately. Based on FMCSA's experience enforcing the controlled
substances and alcohol testing requirements on commercial zone
carriers, the Agency believes long-haul Mexico-domiciled carriers can
and will comply with the random testing requirements, especially given
that many of the participants in the demonstration project already have
authority to conduct commercial zone operations.
Given the procedures explained above, it is clear that Mexico-
domiciled carriers are not being granted an exemption from the
controlled substances and alcohol testing requirements. Through the
PASA process described in the June 8 Federal Register notice, the
Agency can determine with certainty whether the motor carrier has in
place a program to achieve full compliance with the controlled
substances and alcohol testing requirements under 49 CFR Parts 40 and
382. And the ability of the commercial zone carriers to follow these
procedures demonstrates that Mexican carriers are capable of satisfying
the Agency's drug and alcohol testing requirements. At the time this
notice was prepared, all Mexico-domiciled carriers that have passed the
PASA process have chosen to use controlled substances and alcohol
facilities in the U.S. and not Mexican collection sites.

D. Section 6901(b)(2)(B)(iii)--English Language Proficiency and
Cabotage Enforcement

English Language Proficiency
Several commenters wrote about potential problems related to
participating drivers' inability to understand English. Commenters
asserted that the demonstration project does not require English
proficiency and expressed concern that drivers might

[[Page 46283]]

fail to understand crucial traffic signals and signs.
OOIDA and Advocates stated that the notice falls short of providing
the specific measures required by Congress regarding English language
requirements. Advocates said the notice declares that Mexico-domiciled
participants will be required to have ``the ability to communicate in
English.'' Advocates said the Agency failed to demonstrate that it will
ensure, at the border, that every driver participating in the project
will be required to demonstrate English proficiency with regard to the
four separate requirements specified in the regulation.\10\ Instead,
Advocates argue FMCSA indicated that verification of English
proficiency will occur only if some unspecified dissatisfaction occurs
on the part of a U.S. Federal or State inspection official ``when
[they]
interact with the driver in English,'' and if ``there appears to
be a communication problem, the driver will be directed to a site where
a full driver inspection will be conducted.'' Advocates said this
unspecified ``interaction'' with the driver does not fulfill the
requirement in Section 6901 for verifying, in each instance, that a
project driver meets each of the four requirements of the English
proficiency regulation.
---------------------------------------------------------------------------

\10\ 49 CFR 391.11(b)(2) requires that drivers read and speak
the English language sufficiently to: (1) Converse with the general
public; (2) understand highway traffic signs and signals in the
English language; (3) respond to official inquiries; and, (4) make
entries on reports and records.
---------------------------------------------------------------------------

FMCSA Response:
As stated in the June 8 notice, FMCSA and its State partners will
check Mexico-domiciled drivers and vehicles entering the U.S. as part
of the demonstration project. During that check, which will include
verification of a current CVSA decal on the vehicle and the driver's
Mexican CDL, inspectors will conduct a driver interview in English. The
interview will include, at a minimum, inquiries about: The origin and
destination of the trip; the amount of time spent on duty, including
driving time, and the record of duty status (or log book); the driver's
license; and vehicle components and systems subject to the FMCSRs. If
the inspector determines the driver is unable to understand and respond
to official inquiries and directions in English, the driver will be
cited for a violation of 49 CFR 391.11(b)(2) and placed out-of-service
in accordance with the out-of-service criteria.
English proficiency will also be evaluated by means of an interview
during any other vehicle inspections occurring in the U.S. and will
likewise result in an out-of-service order if the driver can not meet
the requirements of section 391.11(b)(2). Although a violation of 49
CFR 391.11(b)(2) has been included in the North American Uniform Out-
of-Service Criteria published by the Commercial Vehicle Safety Alliance
(CVSA) since April 1, 2005, FMCSA personnel are not bound by the OOS
criteria. In fact, the Agency did not immediately change its previous
practice, which was simply to cite drivers and/or motor carriers when
violations were discovered.
While FMCSA has codified its own authority to issue OOS orders for
relatively common violations, such as those involving drivers' hours of
service (49 CFR 395.13) and mechanical defects (49 CFR 396.9(c)), both
the Motor Carrier Act of 1935 (49 U.S.C. 31502(b)) and the Motor
Carrier Safety Act of 1984 (49 U.S.C. 31136) implicitly authorize the
Agency to place drivers and vehicles OOS for all violations of
regulations based on those statutes. Any other conclusion would prevent
FMCSA from halting unsafe practices the statutes were enacted to address.
The driver interview complies with the rule. If the driver
successfully completes the interview, it is likely that the driver can
communicate at some level with the general public, understand traffic
signs in English, and make entries on reports and records required by
the FMCSA.
Cabotage Requirements
The ATA discussed the difficulty that experienced motor carriers
and law enforcement officials have in understanding existing cabotage
rules for Mexican carriers. The Teamsters and Public Citizen also
expressed concerns about enforcing the existing cabotage laws. The
Teamsters stated, ``[T]here will be a strong temptation by unscrupulous
employers to capitalize on lower wage Mexican drivers and entice them
into carrying domestic cargo in the United States. We know that this
occurs, as Mexican trucks have been caught over the years operating
illegally in more than 25 states.'' OOIDA asked whether cabotage violations
were grounds for disqualification from the demonstration project.
There were also comments about training and the training materials
used by law enforcement to implement the cabotage laws. ATA said, ``The
notice states that FMCSA has worked with the International Association
of Chiefs of Police (IACP) to provide training to state and local law
enforcement agencies. ATA supports the development of such training
materials, and request that FMCSA share its training materials in the
docket for review by stakeholders to ensure our mutual understanding as
to what is being presented and asked of local and state law enforcement
personnel for such enforcement activities.'' OOIDA asked for more
information on who would receive the training and the content of that
training.
OOIDA posed questions about potential loopholes in cabotage rules.
They inquired about regulations concerning Mexico-domiciled carriers
hauling loads from Mexico to Canada, hauling ``in-bond'' between U.S.
maritime ports and U.S. Free Trade Zones, and hauling international
cargo from inside the U.S. to a U.S. maritime port. According to
Advocates, ``the FMCSA has no reliable figures or information regarding
the relationship of operating authority violations to cabotage
violations.'' Advocates stated that ``not only are a tiny percentage of
operating authority violations detected but, that the agency has no
idea how many of these involved a violation of cabotage.''
FMCSA Response:
The issues the commenters raise are not new with regard to Mexico-
domiciled carriers. The FMCSA emphasizes that Mexico-domiciled motor
carriers are already allowed to operate in U.S. commercial zones along
the U.S.-Mexico border. And 49 CFR 365.501(b) requires that ``a Mexico-
domiciled carrier may not provide point-to-point transportation
services, including express delivery services, within the United States
for goods other than international cargo.''
Furthermore, as indicated in the Agency's June 8 notice concerning
the demonstration project, the provisional operating authority granted
to a Mexico-domiciled motor carrier to operate beyond the commercial
zone is limited to the transportation of international freight.
Therefore, a carrier providing point-to-point transportation services
in the U.S. is operating beyond the scope of its operating authority
and is in violation of 49 CFR 392.9a(a). Commercial vehicles found to
be operating beyond the scope of the carrier's provisional operating
authority will be placed out of service, and the motor carrier may be
subject to penalties.
The FMCSA has trained all State truck inspectors regarding
enforcement of operating authority and conducted significant outreach
to the law enforcement community to ensure they are aware of these
provisions and that they will examine MX trucks to determine if they
are violating these regulations. Additionally, we have provided and
will continue to provide

[[Page 46284]]

training to State and local law enforcement agencies on conducting
roadside vehicle/driver traffic stops and detecting cabotage violations
during stops of commercial motor vehicles for traffic violations. This
training, aimed at law enforcement agents who are not full-time truck
inspectors, but may encounter a Mexican truck during a traffic stop, is
being conducted in cooperation with the IACP, as mentioned previously
in this notice. The training material FMCSA developed with the IACP
includes a module on operating authority; part of this module includes
guidance concerning cabotage.
As FMCSA explained in its June 8 notice, previous efforts in
training on the enforcement of operating authority rules have been
successful. In 2006, the Southern border States (California, Arizona,
New Mexico, and Texas) discovered 2,328 instances (from 951,229
inspections) where a carrier was found to be operating outside the
scope of its operating authority. While these carriers may have been
operating outside the scope of their authority for reasons other than
cabotage (i.e., operating beyond the commercial zones or having not
received commercial zone authority), this data shows State and Federal
enforcement personnel are successfully enforcing this regulation.
The Agency and its State enforcement partners will also use records
such as logbooks and associated supporting documents such as bills of
lading during compliance reviews to determine if a Mexican carrier has
been operating beyond the scope of its authority by engaging in cabotage.
With regard to OOIDA's questions, the FMCSA considers all point-to-
point deliveries of freight within the U.S., regardless of the origin
of the freight, to be prohibited. Once the freight has been delivered
to an international port in the U.S., any subsequent movement of the
load from the port to another destination in the U.S. is considered a
point-to-point movement within the U.S. Therefore, participating
carriers are prohibited from engaging in such transportation
activities. If a participating carrier engages in such activities
during the demonstration project, FMCSA will remove the carrier from
the project.

E. Section 6901(b)(2)(B)(iv)--Evaluation Standards

Evaluating Carrier and Driver Safety Performance
The ATA, Altshuler, and Advocates argued that the evaluation
process for the demonstration project must include safety performance
standards. Advocates asked FMCSA to provide information on the safety
evaluation criteria.
FMCSA Response:
The FMCSA's June 8 notice provided appropriate safety performance
standards for the participating carriers. These carriers must comply
with all U.S. safety requirements and will not be granted an exemption
for the purpose of participating in the project.
The evaluation process will provide an assessment of whether the
safety performance of Mexico-domiciled carriers operating beyond the
border commercial zones in the U.S. differs from the performance
exhibited by U.S.-domiciled carriers. Specifically, the evaluation will
focus on answering the following five key safety questions:
• Are the available crash data for Mexico-domiciled carriers
participating in the project statistically different from comparable
U.S.-domiciled carriers?
• Do Mexico-licensed commercial drivers pose a greater risk
to the traveling public than U.S. CDL holders in terms of demonstrated
unsafe driving practices, such as speeding, improper lane changes,
controlled substances use/alcohol misuse?
• Are the trucks operated by Mexico-domiciled motor carriers
maintained at levels similar to those of U.S.-domiciled carriers, or do
they have higher out-of-service rates?
• In the course of conducting PASAs, did FMCSA detect
violations of critical safety regulations in any greater proportion
than found in new entrant audits of U.S.-domiciled carriers?
• What other safety problems are being experienced by
enforcement personnel and others in the course of implementing the
demonstration project?
The FMCSA's June 8 notice explained how the Agency will assess
crash rates, driver behavior, the number of driver out-of-service
orders, the number of PASA violations, and post-authority safety
violations. The Agency believes the level of detail provided in the
June 8 notice fulfills the requirements of 49 U.S.C. 31315.
Data Collection and Evaluation
Advocates expressed concern about the project's data collection
methodology and the quality of the data sample. Advocates also remarked
that the notice does not describe specific data collection measures.
The organization expressed concern that data analysis would be
inadequate without a control group and application of other peer-
approved scientific principles.
Furthermore, Advocates argued ``This is not only an unfair basis
for comparison, but FMCSA is ignoring scientific, peer accepted
principles on how a comparison or control group is carefully selected
to compare with a study group.'' Altshuler agreed, saying, ``* * * the
notice fails to offer any criteria pursuant to which the program's
success may be assessed. Although certain statistics apparently will be
tracked, there is no framework or method for evaluating those statistics.''
FMCSA Response:
The FMCSA disagrees with Advocates' assertions. The Agency has
structured the demonstration project in a manner that will enable an
appropriate collection and analysis of data. As discussed in the June 8
notice, the Secretary has appointed a panel of three independent
transportation evaluators to assess the safety performance of Mexico-
domiciled carriers operating beyond the border commercial zone in the
United States. The evaluators are Mortimer L. Downey III, former Deputy
Secretary of Transportation, Kenneth M. Mead, former DOT Inspector
General, and James T. Kolbe, former U.S. Congressman from Arizona. The
Office of the Secretary has asked DOT's Research and Innovative
Technology Administration's Transportation Safety Institute (TSI) to
manage the project independently of FMCSA for independent evaluation
purposes. TSI has retained a project manager and technical staff to
work with the evaluators. The evaluation will provide an assessment of
whether the safety performance of Mexico-domiciled carriers operating
beyond the border commercial zone in the U.S. differs from the
performance exhibited by U.S.-domiciled carriers. The data will be
collected in the United States by FMCSA and the States through their
routine monitoring of the Mexico-domiciled carriers and will be
forwarded to the Evaluation Panel for any subsequent analysis.
Report to Congress on the Independent Evaluation
Several commenters expressed concern that the project did not
contain credible independent evaluation. Advocates commented that the
demonstration project failed to provide a method for reporting its
findings to Congress. They expressed concern that only U.S. DOT and
FMCSA will review the project without reporting its results. The ATA
suggested that FMCSA form an independent evaluation panel to review and
assess the impact of the demonstration project.

[[Page 46285]]

FMCSA Response:
The FMCSA's June 8 notice identified the independent evaluation
team, and no commenter has provided any evidence that would question
the team's credibility. The work of the team and its project management
staff will be completely independent of DOT.
The FMCSA's June 8 notice also explains the requirements of section
6901, which includes the requirement for the OIG to transmit to
Congress and the Secretary of Transportation a report verifying
compliance with each of the requirements of subsection (a) Of section
350 of the 2002 DOT Appropriations Act. Section 6901 also requires that
the OIG submit to Congress and the Secretary an interim report 6 months
after the commencement of the project, and a final report within 60
days after the conclusion of the project. In addition, because section
6901 requires that FMCSA satisfy the requirements of 49 U.S.C. 31315(c)
in conducting the demonstration project, the Agency is required to, and
will, submit a report detailing the results of the project to Congress
upon the project's completion.
Also, the Secretary of Transportation has committed to having a bi-
partisan independent review panel assert its involvement from the onset
to the conclusion of the demonstration project. There will be more than
adequate opportunity for an independent evaluation of the project.

F. Section 6901(b)(2)(B)(v)--Equivalent U.S. and Mexican Standards

Physical Qualification Standards
The Teamsters, Public Citizen, OOIDA, and Advocates expressed
concern over driver compliance with medical qualifications. The
Teamsters said that in FMCSA's recent Notice of Proposed Rulemaking for
combining the medical qualifications with the CDL process, FMCSA
indicated that there is no agreement between the U.S. and Mexico
concerning the medical qualifications for drivers. The commenter said
little is known about the physical and medical criteria used to qualify
truck drivers in Mexico, and FMCSA must know how the Mexican system of
evaluating drivers compares to the U.S. system. Public Citizen said
that FMCSA has acknowledged in pending rulemaking that commercial
drivers will select health care providers who will find them physically
fit to operate commercial motor vehicles. The commenter expressed
concern about the quality of the medical examinations and physical
fitness requirements for CDLs in Mexico.
Similarly, Advocates stated that because FMCSA did not provide
specific information about the Mexican physical qualification
standards, the public cannot determine whether, in fact, they are
equivalent to U.S. physical qualification standards.
FMCSA Response:
The FMCSA determined in 1991 that the physical qualifications
standards in Mexico are comparable to, but not identical to U.S.
requirements. This notice and comment process is not addressing whether
the Agency's previous determination was appropriate.
In Mexico, in order to obtain the Licencia Federal de Conductor a
driver must meet the requirements established by the Ley de Caminos,
Puentes y Autotransporte Federal (LCPAF or Roads, Bridges and Federal
Motor Carrier Transportation Act) Article 36, and Reglamento de
Autotransporte Federal y Servicios Auxiliares (RAFSA, or Federal Motor
Carrier Transportation Act) Article 89, which state a Mexican driver
must pass the medical exam performed by Mexico's Secretariat of
Communications and Transportation (SCT), Directorship General of
Protection and Prevention Medicine in Transportation (DGPMPT). The
medical exams are conducted by government doctors instead of the
private physicians performing the exam on U.S. drivers.
The Agency emphasizes that drivers for Mexico-domiciled motor
carriers have been operating within commercial zones for years with the
medical certification provided as part of the LFC, and the Agency is
not aware of any safety problems that have arisen as a result.
Accordingly, FMCSA sees no reason to revise its previous judgment that
the medical standards are comparable.

IV. Other Issues Raised by Commenters

Impact on Truck Drivers, Small Fleets, and Businesses

Numerous commenters expressed concern that the demonstration
project would adversely affect U.S. carriers by giving a competitive
advantage to Mexican carriers. Several commenters noted that Mexican
carriers would benefit from lower wages for drivers. Commenters also
discussed taxes and fees that carriers must pay.
Demarche wrote:

``Smaller, minority-owned carriers have the ability to service
shippers domestically, and desire to have the same opportunities
available to them as other carriers. The demonstration project tilts
the competitive advantage to Mexican carriers and creates increased
competition for smaller carriers in the U.S., causing a potential
strain on the trucking industry.''

Demarche discussed driver shortages in the industry, and projected
that a decrease in the industry's white male population ``provides an
opportunity for traditionally disadvantaged groups to gain sustainable
employment in the industry and fulfill the lofty employment
requirements of many carriers.'' Demarche noted that the industry
generates business growth in certain demographic groups and concluded
that the proposed demonstration project would allow Mexican carriers to
ship freight to U.S. destinations at lower labor costs than U.S.-based
carriers can. Demarche believes ``Lower labor costs [in Mexico]
will
lead to lower rates [than U.S. carriers]
carriers can provide,
ultimately enticing shippers to use Mexican domiciled carriers to haul
freight.'' Demarche also expressed concern that shippers have no
incentive to ensure driver compliance with applicable laws and ``may
not have an overwhelming concern on who is hauling goods, just as long
as freight is received by the customer at the right price and place.''
Demarche argued that this scenario increased competition among smaller
and minority-owned carriers, caused these carriers to lower costs and
further decrease profit margins, and essentially shut out minority-
owned carriers from this segment of the industry.
OOIDA believes the demonstration project would be disadvantageous
to U.S. motor carriers because ``Complying with our tax regulations
will place them in an uneven economic competitive environment compared
to foreign rivals.'' OOIDA indicated that Mexican carriers are likely
to cross the border with fuel tanks filled to capacity to avoid paying
Federal or State fuel taxes. OOIDA continued, ``With industry fuel
mileage averages, Mexican trucks could be expected to operate between
1,500 and 1,800 miles without purchasing U.S. taxed fuel.''
OOIDA commented on the impacts of insurance on small business
owners, in relation to cross-border trucking. OOIDA wrote ``All
commercially available U.S. insurance policies that cover the vehicle
itself specifically exclude travel into Mexico[,]'' and that only large
self-insured carriers likely will have access to Mexico. The
organization concluded that the demonstration project effectively would
exclude small business truckers from the Mexican market. OOIDA knew of
no available insurance coverage for a small business motor carrier
operating in Mexico with mortgaged equipment.

[[Page 46286]]

FMCSA Response:
The FMCSA does not believe the demonstration project will have a
significant adverse impact on U.S. motor carriers or drivers. As an
initial matter, however, it is important to note that FMCSA lacks the
authority to alter the terms under which Mexican carriers operate in
the United States based on the possible economic impact of those
carriers on U.S. carriers. FMCSA's responsibility, pursuant to the
President's November 2002 order, is to implement NAFTA's motor carrier
provisions in a manner consistent with the motor carrier safety laws.
While the wages for a Mexico-domiciled driver may differ from those
of a U.S.-domiciled driver, wages represent only one factor in the cost
of a trucking operation. The costs for safety management controls to
achieve full compliance with U.S. safety requirements, equipment
maintenance, fuel, taxes and insurance costs must also be considered.
Therefore, driver wages alone should not be considered the determining
factor for an economic advantage.
Also, Mexico-domiciled motor carriers cannot compete against U.S.-
domiciled carriers for point-to-point deliveries of domestic freight
cabotage within the United States. Section 365.501(b) provides that ``a
Mexico-domiciled carrier may not provide point-to-point transportation
services, including express delivery services, within the United States
for goods other than international cargo.''
The provisional operating authority granted to a Mexican domiciled
motor carrier to operate beyond the commercial zone is limited to the
transportation of international freight. Therefore, a carrier providing
point-to-point transportation services in the U.S. is operating beyond
the scope of its operating authority and is in violation of 49 CFR
392.9a(a). Commercial vehicles found to be operating beyond the scope
of the carrier's provisional operating authority will be placed out of
service, and the motor carrier may be subject to penalties.

Concerns About Furthering Illegal Activity

Many commenters argued that the demonstration project generally
will further illegal activity within the U.S. Commenters specified drug
trafficking, illegal immigration, smuggling, illegal cargo, and tax
evasion. Commenters also believed that drivers would violate laws
unrelated to motor carriage.
FMCSA Response:
The FMCSA disagrees with the commenters on this issue. The FMCSA is
not aware of any information that would suggest the demonstration
project will increase the extent to which illegal activities occur.
Mexico-domiciled motor carriers are already allowed to operate in
commercial zones. Many of the carriers that have applied for authority
to operate beyond the commercial zones and participate in the
demonstration project are already conducting CMV operations in the
U.S., albeit limited to the commercial zones. Therefore, FMCSA does not
anticipate problems with this population of carriers
As indicated in the May 1 notice, participating carriers were
selected from several hundred Mexico-domiciled carriers that filed a
complete OP-1 (MX) application. The carriers that are 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. Therefore, FMCSA does not
believe the participating carriers represent a significant risk of
illegal drug activities.
The participating carriers, like the carriers currently operating
into the border commercial zones, will be subject to the full array of
customs and immigration inspections when they enter the United States.
Persons entering the U.S. for business purposes and traveling beyond
the commercial zones must obtain a visa.
It is inappropriate to conclude that Mexico-domiciled carriers are
likely to engage in illegal activities simply because they are from
Mexico. In any case, FMCSA does not have the statutory authority to
deny long-haul Mexico-domiciled carriers operating authority based
solely on commenters' perceptions that they are more likely than U.S.
carriers to engage in illegal activities.

Hazardous Materials and Passenger Carriers

Altshuler, ODOT, and Advocates noted that the Federal Register
notice does not explicitly state that motor carriers transporting
hazardous materials (HM) or passengers are not eligible to participate
in the demonstration project. These commenters requested a definitive
statement on this issue from FMCSA.
The Teamsters noted that one of the most frequent out-of-service
(OOS) violations for Mexican drivers hauling HM into the commercial
zones is displaying incorrect placards or no placards at all. The
Teamsters questioned how FMCSA would assure the stop of HM inside
commercial zones without proper placards.
FMCSA Response:
The FMCSA emphasizes that the May 1 and June 8 notices did include
statements indicating Mexico-domiciled motor carriers transporting
passengers or hazardous materials will not be permitted to participate
in the demonstration project. For example, the portion of the May 1
notice that discusses the selection criteria for participating carriers
indicates that carriers known to transport passengers of hazardous
materials would be eliminated from consideration. The FMCSA takes this
opportunity to reiterate that Mexico-domiciled carriers transporting
passengers or hazardous materials will not be allowed to participate in
the demonstration project. The Agency will ensure that this aspect of
the project is continually emphasized in materials provided to
potential program participants before the PASA is conducted, in
conversations with carrier officials during the PASA, and in the
operating authority document.

Minimum Levels of Financial Responsibility

The Truck Safety Coalition (the Coalition) stated that although
FMCSA asserts that Mexican-domiciled motor carriers will be required to
carry insurance through a U.S. insurer, the current level of insurance
is only $750,000, an amount that is too low to protect American
citizens. The Coalition suggested that there should be a substantial
increase in the minimum amount of insurance coverage required for
foreign carriers operating inside the U.S., at least to an amount that
might be more commensurate with the losses suffered in the event of a
crash involving personal injury and death.
FMCSA Response:
There is no merit to the Coalition's suggestion that Mexico-
domiciled motor carriers transporting general freight should be
required to have a greater level of financial responsibility than U.S.-
based motor carriers transporting the same types of cargo. Mexico-
domiciled carriers must establish financial responsibility, as required
by 49 CFR part 387, through an insurance carrier licensed in a State in
the United States. Based on the terms provided in

[[Page 46287]]

the required endorsement, FMCSA Form MCS-90, if there is a final
judgment against the motor carrier for loss and damages associated with
a crash in the United States, the insurer must pay the claim. The
financial responsibility claims would involve legal proceedings in the
United States and an insurer based here. There is no reason that a
Mexico-domiciled carrier, insured by a U.S.-based company, should be
required to have a greater level of insurance coverage than a U.S.-
based carrier.

Vehicle Inspection and Fleet Safety

Altshuler expressed concern that the May 1 Federal Register notice
provided no specific details on the PASA, e.g., the scope of that
inspection, whether the inspection is physical or merely an audit of
the carrier's vehicle's paperwork, and whether the results of those
inspections will be made public. Altshuler stated that the notice also
fails to identify the frequency with which the PASA and the inspections
will be performed and it is unclear if the safety audit will be
repeated every 3 months, or if some other, type of inspection will
occur every 3 months.
Advocates said the statement ``Every truck that crosses the border
as part of the pilot will be checked--every truck, every time'' gives
the impression that each participating vehicle will be inspected upon
each entry into the U.S. However, the commenter noted that the notice
states that ``[e]ach 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,'' which appears to mean that
demonstration project vehicles will not be fully inspected on each entry.
FMCSA Response:
The June 8 notice provides details about the PASA. During the on-
site PASA, FMCSA will select vehicles for inspection from among those
that are intended for use in the United States. The Agency will also
review fleet maintenance records to assess the carrier's inspection,
repair and maintenance practices. A complete copy of the Agency's PASA
training material is in the docket listed at the beginning of this notice.
In response to Altshuler's question, each participating carrier
will be required to successfully complete subjected to only one PASA.
In response to questions about roadside inspections, FMCSA and its
State partners will check participating carrier's CMVs every time they
cross the border to ensure the vehicles display current CVSA decals.
However, the Agency and the States do not intend to conduct a full
safety inspection of vehicles operated by participating carriers when
such vehicles display a current CVSA decal unless the vehicle has an
obvious safety deficiency, in which case an inspection will be
conducted regardless of whether there is a current CVSA decal.
The FMCSA notes there is no statutory or regulatory requirement to
check every Mexico-domiciled truck, every time. The statement Advocates
referenced was part of a media advisory and was meant to emphasize
Mexico-domiciled trucks coming into the U.S. would be held to the same
safety standards as U.S. trucks. Every truck, every time is expected to
be in compliance with U.S. safety requirements.

Suspension and Revocation of Participating Carriers

The Teamsters said it was unclear as to the criteria to use for
disqualifying carriers. Both the Teamsters and OOIDA recommended that
violating cabotage laws should disqualify a carrier from participating
in the demonstration project. The Teamsters recommended that FMCSA
should terminate any Mexican carriers caught hauling hazardous
materials loads from the demonstration project.
FMCSA Response:
Any Mexico-domiciled carrier operating as part of this
demonstration program will immediately be subject to suspension and
revocation of its registration if it receives an ``Unsatisfactory''
safety rating. Any Mexico-domiciled carrier that receives a
``Conditional'' safety rating as a result of a compliance review will
have its authority revoked unless it can demonstrate corrective action
within 30 days--this is a more stringent standard for U.S.-based
carriers that receive a conditional rating; they are allowed to
continue operating. Also, any carrier in the demonstration project will
have its authority suspended if it fails to maintain insurance on file
with FMCSA. Any vehicles found operating in the United States by a
carrier without active operating authority will be placed out of service.
In addition to loss of authority for less than satisfactory safety
ratings or absence of insurance, drivers and carriers participating in
the demonstration project, like all commercial motor vehicle drivers
and motor carriers operating in the U.S., are subject to civil
penalties for violations of the Federal Motor Carrier Safety Regulations.
Participating carriers will be removed from the program if FMCSA
determines the carrier violates U.S. cabotage rules or transports
hazardous materials or passengers beyond the commercial zones.

FMCSA Authority To Proceed With the Project

Altshuler set out its interpretation of the process requirements
under section 350(c). It said that provision requires DOT's Inspector
General ``to conduct a `comprehensive review of borders operations' to
verify the existence of 8 conditions (and to) perform such a review
`180 days after the first review is completed, and at least annually
thereafter'.'' The commenter said the Secretary of Transportation then
must certify in writing and addressing any Inspector General finding
relating to the eight conditions, ``* * * that the opening of the
border does not pose an unacceptable safety risk to the American
public.'' Other commenters expressed the same or similar views.
OOIDA believes ``Section 6901 does not permit FMCSA to proceed with
a pilot program until the [Inspector General]
publishes a new report
and that report verifies FMCSR compliance with Section 350.'' The
Teamsters argued that the Inspector General's not having made the
required verifications ``begs the question as to whether the DOT has
acted prematurely and without proper statutory authority to conduct
this pilot program.''
Advocates said, ``At the threshold, the Project violates section
31315 because providing notice and comment did not occur prior to
implementation of the Project[.]'' Advocates asserted that the Agency
already had taken ``major actions'' to allow Mexico-domiciled carriers
to operate in the U.S. beyond the border zones, that the May 1 Notice
conceded the Agency already had begun the project, and that the Office
of the Secretary had characterized the demonstration project as a
``fait accompli'' in February 2007. Advocates pointed out that the
Secretary said, on February 23, 2007, that FMCSA would complete initial
safety audits for project participants in 60 days so that the selected
carriers could begin traveling beyond the border areas. The comment
observed, ``That 60-day calendar for implementing the Demonstration
Project would conclude prior to the date of the instant notice asking
for public comment on the content of the Project.''
FMCSA Response:
There is no basis for the claim by Altshuler and others that the
Secretary of Transportation must repeat the certification required by
section

[[Page 46288]]

350(c)(2) of the 2002 DOT Appropriations Act after each OIG review
required by section 350(c)(1) and (d). In 2002 the OIG verified FMCSA's
compliance with section 350(c)(1)(A)-(H), and the Secretary certified
``that the opening of the border does not pose an unacceptable safety
risk to the American public,'' as required by section 350(c)(2).
Section 350(d) requires the OIG to conduct its second review and
subsequent annual reviews ``using the criteria in (c)(1)(A) through
(c)(1)(H) consistent with paragraph (c) of this section. * * *''
Section 350(d) is directed exclusively to the OIG; it does not refer to
section 350(c)(2), nor does it mention a Secretarial certification.
There is nothing to suggest that OIG reviews subsequent to the initial
finding of compliance with section 350(c)(1) require a corresponding
certification by the Secretary.
The demonstration project will commence upon the grant of
provisional operating authority to long-haul Mexico-domiciled carriers.
However, FMCSA will not begin granting such authority until after the
report required by section 6901(b)(1) has been completed and the Agency
completes any follow-up actions needed to address any issues that may
be raised in the report.
With regard to Advocates' comment, FMCSA emphasizes the project is
not a ``pilot program'' within the meaning of 49 U.S.C. 31315(c)
because the Agency is not testing innovative approaches to motor
carrier safety and is not granting any exemptions from the safety
regulations. The requirements of 49 U.S.C. 31315(c) were not applicable
to the demonstration project until the enactment of the 2007 Act. In
accordance with the 2007 Act, FMCSA published a notice in the Federal
Register on June 8, 2007, announcing additional details about the
project and requesting public comment.
The demonstration project satisfies the requirement that the level
of safety provided be equivalent to or greater than the level of safety
provided through existing safety regulations. The participating carriers
will not be provided exemptions from any of the existing safety regulations.
The Advocates claim that the Agency had already initiated the
program prior to the publication of either the May 1 or June 8 notice
are incorrect. In fact, no Mexico-domiciled motor carrier has been
granted authority to operate beyond the commercial zones. The Agency
has completed significant amounts of preparatory work in anticipation
of launching the project, such as reviewing applications for operating
authority and conducting PASAs. However, FMCSA has not granted authority
to Mexico-domiciled carriers to operate beyond the commercial zones.

``Demonstration Project'' or ``Pilot Program''

Responding to the May 1 Notice, Advocates argued that FMCSA was
undertaking a statutory ``pilot program'' under 49 U.S.C. 31315(c) that
required following a number of procedural steps and meeting various
statutory preconditions. Advocates argue that the demonstration project
``is testing an `innovative approach to motor carrier, commercial motor
vehicle, and driver safety,'' and ``is intended to evaluate
alternatives to regulations.''
FMCSA Response:
The demonstration project is not a ``pilot program'' within the
meaning of 49 U.S.C. 31315 because the Agency is not testing an
innovative approach to motor carrier safety and is not granting any
exemptions from its safety regulations. During the demonstration
project, all participating carriers will be required to comply with
existing U.S. safety regulations; no alternatives to existing
regulations are being implemented, and no exemptions are being
provided. However, because section 6901 of the 2007 Act requires that
FMCSA ensure that the demonstration project satisfies the pilot program
prerequisites of 49 U.S.C. 31315, Advocates' concerns have been
effectively resolved by the 2007 statute.

Collection of Taxes

OOIDA noted that FMCSA was without authority or responsibility for
collecting various State and Federal taxes, and therefore the Agency
could offer no assurances ``Mexican motor carrier will pay all
applicable U.S. `vehicle registration and taxation, and fuel taxes.''
OOIDA emphasized the Agency could not audit Mexican carriers for their
required compliance with the International Fuel Tax Agreement, or
provide assistance to the States to help ensure the Mexico-domiciled
carriers comply with the International Registration Plan, nor ensure
Mexican carriers pay other State taxes and fees imposed on the U.S.
motor carrier industry.
FMCSA Response:
The collection of State taxes and registration fees are State
responsibilities over which the Agency has no control. However, FMCSA
has worked with State tax and vehicle registration officials to ensure
that Mexico-domiciled long-haul motor carriers will pay applicable fuel
taxes and registration fees for operating commercial vehicles in the
U.S. and that those taxes and fees will be subject to apportionment
among the U.S. states and Canadian provinces as required by law.
Specifically, in 2001 the National Governors Association Center for
Best Practices, in cooperation with the International Fuel Tax
Association, Inc. (IFTA, Inc.), the group responsible for managing the
International Fuel Tax Agreement (IFTA), and the International
Registration Plan, Inc. (IRP, Inc.), which manages the International
Registration Plan (IRP), convened a Fuel Tax and Registration Working
Group comprised of State officials to recommend strategies for
collecting appropriate taxes and fees from Mexico-domiciled carriers as
they begin operations under NAFTA. Subsequently, a NAFTA Border States
Working Group was formed consisting of representatives from each of the
border States, and representatives from IFTA, IRP, the U.S. Department
of Transportation, Transport Canada, Mexico SCT, and ATA to further
develop these strategies. The Working Group's recommendations have been
adopted by the States and Provinces that are parties to IRP and IFTA.
As a result of these efforts, Mexican long-haul carriers participating
in the demonstration project will be subject to the same state fuel tax
and registration fees and apportionment system that applies to U.S. and
Canadian carriers and will be subject to State fuel tax and
registration fee audits.
The FMCSA worked with the NAFTA Border States Working Group to
develop an IRP/IFTA awareness course. The course was presented to
Mexico-domiciled motor carriers and Mexican government officials at six
locations in Mexico and the United States. The training provided an
overview of IRP/IFTA and the principles of reciprocity between member
jurisdictions. The course presented the basic IRP/IFTA forms and a
demonstration of record keeping requirements. It also provides points-
of-contact for the four Southern Border States. Trainings sessions were
held in: Monterrey, Mexico; Mexico City, Mexico; Otay Mesa, California;
Laredo, Texas; El Paso, Texas; and, Nogales, Arizona.

IV. FMCSA Intent To Proceed With the Demonstration Project

In consideration of the above, FMCSA believes it is appropriate to
commence the demonstration project after the U.S. Department of
Transportation's Inspector General completes his report to Congress, as
required by section 6901(b)(1) of the Act, and the Agency completes any
follow-up actions needed

[[Page 46289]]

to address any issues that may be raised in the report.

Issued on: August 10, 2007.
David H. Hugel,
Deputy Administrator.
[FR Doc. E7-16207 Filed 8-16-07; 8:45 am]
BILLING CODE 4910-EX-P

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