Regulatory and Legislative Update - June 2024

Contents

Regulation and Enforcement

• FMCSA to hold listening sessions on safety fitness procedures
• FMCSA outlines plan for updating registration process
• FMCSA to hold public meeting on fees charged for towing and recovery
• UCR fees to rise in 2025 after two years of decreases
• FMCSA rejects SBTC petition related to broker role in executing cargo claims
• Washington high school seeks age relief on commercial permits
• Company seeks exemption to allow limited interstate driving by younger drivers
• Oregon DOT seeks relief related to drivers from Freely Associated States
• AAMVA procedures for CDL system administration incorporated into FMCSRs
• Covenant, Landair seek relief from CDL restriction

Legislation

• House bill would address FMCSA’s commercial regulations enforcement

Advocacy and Comment

Regulation and Enforcement

FMCSA to hold listening sessions on safety fitness procedures

FMCSA will hold virtual and in-person sessions this month and next to obtain feedback on a potential new methodology to determine when a motor carrier is not fit to operate commercial motor vehicles in interstate commerce. The listening sessions are a continuation of the process the agency already started, including an advance notice of proposed rulemaking (ANPRM) published last summer. According to FMCSA’s most recent report on significant rulemaking activity, a notice of proposed rulemaking (NPRM) on safety fitness procedures is targeted for June 2025.

The purpose of the upcoming listening sessions is to solicit comments on options for changes to safety fitness determinations, including the use of available safety data in determining fitness to operate. FMCSA also is seeking input on possible changes to the current three-tier safety fitness rating structure. The first session will be virtual and will be held from 2 p.m. to 3:30 p.m. Eastern on June 25. The second session will be in person at the Texas Trucking Show in Houston from 1 p.m. to 2:30 p.m. Central on June 29. The third session, which will be virtual, is scheduled for 2 p.m. to 3:30 p.m. Eastern on July 31. FMCSA also is accepting written comments through August 7 at SafetyFitnessDetermination@dot.gov.

More on the in-person session is available at https://www.federalregister.gov/d/2024-12530. For information on the virtual sessions, see an FMCSA blog post at https://fmcsa.medium.com/we-want-to-hear-from-you-fmcsa-to-host-public-listening-sessions-ahead-of-safety-fitness-55e4755792df. Previous documents and comments are available at https://www.regulations.gov/docket/FMCSA-2022-0003.

FMCSA outlines plan for updating registration process

FMCSA held a virtual meeting on May 29 to lay out its plans for revamping the registration process for carriers, brokers, and other regulated entities. The meeting was a continuation of outreach that began in January with an in-person stakeholder meeting and continued with a presentation in March at the Mid-America Trucking Show. FMCSA has invited comments by June 18 on its plans. For the Federal Register notice, visit https://www.federalregister.gov/d/2024-08439. For comments and other resources related to that notice, visit https://www.regulations.gov/docket/FMCSA-2024-0109.

The agency acknowledges that that one of its goals is to make its antiquated registration system easier to use, but it also stresses that fraud prevention and information technology security measures are key goals. Changes aimed at making the system easier include planned use of edit checks, smart logic, and auto-population of pre-existing information to decrease redundant data entry. Security measures being eyed include items such as multi-factor authentication and visual identity verification as well as matching submitted business name and address information with other existing data sources.

One planned change that has garnered considerable attention is elimination of MC and FF numbers and instead using suffixes at the end of USDOT numbers to designate the authority as carrier, broker, or freight forwarders. Ken Riddle, director of FMCSA’s Office of Registration, indicated during the meeting the agency can execute that change at its own discretion without any further legislation or rulemaking.

Much of what FMCSA outlined during the May 29 session is a revamp of how the registration system operates and, apparently, falls within the agency’s current authority. However, Riddle noted several items under consideration that would require rulemaking. For example, while eliminating MC and FF numbers is under FMCSA’s authority, the agency would need to propose a rule to do the same with MX or NNA (non-North America domiciled carriers) numbers. FMCSA also wants to eliminate paper applications, but doing so would require a change in the regulations.

Other changes under consideration that would require rulemaking outlined during the May 29 stakeholder meeting include:

• Mandatory insurance filings for private hazardous materials (HM) and exempt for-hire carriers;
• Mandatory service of process agent filings (BOC-3) for private and exempt for-hire carriers;
• Changes to fees;
• An end to transfers of authority;
• Annual updates of registration data (as opposed to the current biennial update); and
• Allowing challenges to registration to be completed online via the FMCSA Register.

FMCSA to hold public meeting on fees charged for towing and recovery

FMCSA has scheduled a public meeting for June 21 to engage motor carriers and other stakeholders on the issue of towing and recovery services for commercial motor vehicle operations, specifically on industry practices regarding the disclosure of towing fees to CMV owners and the question of whether owners are made aware of costs and fees prior to the tow.

he meeting will be held at 9 a.m. at the DOT headquarters building, but there will also be a virtual option for attendance. Written comments may be submitted by July 1. For information, visit https://www.fmcsa.dot.gov/towingfees/fmcsa-towing-fees-public-meeting. For the Federal Register notice, visit https://www.federalregister.gov/d/2024-11957.

In a related development, FMCSA back in February had submitted comments on the issue of predatory towing as part of a Federal Trade Commission rulemaking regarding unfair and deceptive fees. FMCSA’s comments are available at https://www.regulations.gov/comment/FTC-2023-0064-3134.

UCR fees to rise in 2025 after two years of decreases

Registration fees under the Unified Carrier Registration Plan and Agreement will rise by an average of 25% in 2025 after an average decrease of 37.3% over the past two years. FMCSA's final rule, which is based on a recommendation from the UCR Plan, applies to motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies. Petitions for reconsideration must be submitted by July 17. For the Federal Register notice, visit https://www.federalregister.gov/d/2024-13192.

FMCSA rejects SBTC petition related to broker role in executing cargo claims

FMCSA on June 3 denied a petition for rulemaking filed in November by the Small Business Transportation Coalition related to broker involvement in shippers’ cargo claims. Specifically, SBTC had requested an amendment to 49 CFR 371 to include language that prohibits property brokers from assuming the role of a shipper’s insurance adjuster for loss and damage claims against a motor carrier.

Washington high school seeks age relief on commercial permits

FMCSA invited comments until June 17 on an application from Connell High School (CHS) of Connell, Washington, for an exemption beginning September 2024 to allow students under the age of 18 who are enrolled in CHS’s commercial driver’s license (CDL) program to obtain a commercial learner’s permit (CLP). Participants would obtain a CLP at 17 and receive 180 hours of classroom and drive time instruction before obtaining a CDL at 18. For the Federal Register notice, visit https://www.federalregister.gov/d/2024-10856.

Company seeks exemption to allow limited interstate driving by younger drivers

FMCSA is inviting comments by July 11 on an application from 3 North LLC for a five-year exemption to enable three of its commercial driver’s license holders under the age of 21 with the requisite “K” restriction for intrastate-only operations to drive commercial motor vehicles in intrastate operations in a state other than their State of domicile. The applicant indicates these individuals will drive less than 20 miles per day in intrastate commerce. For the Federal Register notice, visit https://www.federalregister.gov/d/2024-12767.

Oregon DOT seeks relief related to drivers from Freely Associated States

FMCSA is inviting comments by July 11 on an application from the Oregon Department of Transportation for a limited exemption from the commercial driver's license (CDL) rules concerning acceptable proof of citizenship or lawful permanent residency for citizens of Freely Associated States (FAS) who now reside in Oregon and wish to obtain a CDL. The FAS are the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. If the exemption is granted, Oregon would be allowed to issue standard commercial learner permits and CDLs to these individuals, rather than issuing non-domiciled CLPs and CDLs. For the Federal Register notice, visit https://www.federalregister.gov/d/2024-12766.

AAMVA procedures for CDL system administration incorporated into FMCSRs

FMCSA issued a final rule to incorporate into the Federal Motor Carrier Safety Regulations (FMCSRs) by reference the most recent edition of the American Association of Motor Vehicle Administrators, Inc.’s (AAMVA’s) Commercial Driver's License Information System (CDLIS) State Procedures Manual (SPM), version c.0. The rule, which is effective July 15, will require all state driver’s licensing agencies to use this edition of the manual to follow standard administrative practices required by the states. For the Federal Register notice, visit https://www.federalregister.gov/d/2024-12882.

Covenant, Landair seek relief from CDL restriction

FMCSA is accepting comments until June 24 on an application from Covenant Transport Inc. and Landair Transport Inc. – jointly doing business as Covenant Logistics – requesting an exemption to allow commercial learner's permit (CLP) holders who have passed the commercial driver's license skills test but have not yet received a CDL document to drive a Covenant Logistics’ commercial motor vehicle without being accompanied by a CDL holder in the passenger seat. For the Federal Register notice, visit https://www.federalregister.gov/d/2024-11275.

Legislation

House bill would address FMCSA’s commercial regulations enforcement

The ranking Democrat on the highways and transit subcommittee of the House Transportation & Infrastructure Committee and a Republican member of that committee have jointly introduced legislation (H.R. 8505) aimed at strengthening FMCSA’s enforcement of the commercial regulations on motor carriers, brokers, and freight forwarders. The lead sponsor, Del. Eleanor Holmes Norton (D-D.C.), is promoting the bill as an effort to strengthen consumer protections against fraud involving residential moving companies, but several changes that would be implemented by the legislation would involve the full range of commercial regulations.

In introducing H.R. 8505, Norton stated that a Department of Transportation administrative law judge in 2019 ruled that FMCSA lacked authority to assess civil penalties for violations of commercial regulations and registration requirements. As interpreted by the agency, the ALJ ruling requires instead that the Department of Justice initiate any action in federal court.

“This bill would reverse the ALJ’s decision and provide explicit authority for FMCSA to adjudicate and assess civil penalties for unfair business practices and consumer protection violations, as well as give FMCSA authority to enforce roadway safety regulations against fraudsters,” Norton said in her introduction statement.

H.R. 8505 also would give FMCSA explicit authority to withhold registration from any applicant that fails to provide a valid principal place of business or that fail to disclose common ownership with any other registered entities at the time of registration. Norton said that although FMCSA already requires designation of principal places of business and disclosure of common ownership, the agency can take enforcement action only after the entity is registered and refuses to cooperate with investigations.

Rep. Mike Ezell (R-Mississippi) is an original co-sponsor of H.R. 8505, and Rep. Daniel Meuser (R-Pennsylvania) has since joined as a co-sponsor. The bill has been endorsed by several organizations concerned about fraud in freight transportation.

For more information, visit https://www.congress.gov/bill/118th-congress/house-bill/8505.

Advocacy and Comment

This month’s update shows the wide range of pending administrative and judicial initiatives. Issues like revision of safety ratings, the need for regulatory reform involving Federal enforcement of anti-fraud abuses, and the need for prosecution of fraudsters at the Federal level are all involved. Clearly, Congress is becoming involved and the scope of the FMCSA’s vetting and enforcement powers are at issue.

Additional comments on the Agency’s new application reform initiative are due tomorrow (June 18, 2024). Set forth above is the additional information gleaned about the new application proposal of May 29 which is further evidence that our request to postpone its implementation until rulemaking is conducted is appropriate.

The Transportation & Logistics Council, a reform coalition member, is holding an informative webinar on fraud entitled, “Vetting Transportation Service Providers / Avoiding Theft, Fraud and Scams” which is open to the public. To register see https://tlcouncil.org/food-produce-claims-90-minute-virtual-workshop-online-registration.