Regulatory and Legislative Update - July 2023

Contents

Regulation and Enforcement

• FMCSA close to seeking input on safety fitness determination regulations
• FMCSA takes steps to address counteract fraudulent carriers
• Final guidance issued on definitions of brokers and bona fide agents
• Truck Leasing Task Force holds inaugural session
• FMCSA plans to address mandate concerning carriers’ knowledge of regulations
• NHTSA, FMCSA plan to mandate automatic braking systems on new trucks
• CARB, truck makers reach agreement on emissions regulations
• FMCSA clarifies reissuance date of guidance on its portal
• Driver denied request for a 5/5 split of sleeper berth time
• FMCSA plans to exempt recreational activity providers from authority registration
• FMCSA grants exemption to allow use of LED flares solely
• FMCSA still plans to study human interaction with automated driving systems

Legislation

• House DOT funding bill would block speed limiters, address younger driver measures

Advocacy and Comment

Regulation and Enforcement

FMCSA close to seeking input on safety fitness determination regulations

The White House’s Office of Management and Budget has cleared for formal publication an advance notice of proposed rulemaking (ANPRM) that would seek information on how FMCSA might use data and resources more effectively to identify unfit motor carriers and remove them from service. Details of the ANPRM, which presumably will be published in the Federal Register in the coming days, are unknown until the agency announces it, but available information states that the notice would seek comment on use of available safety data, including inspection data, in determining carrier fitness to operate. FMCSA will also see input on possible changes to the current three-tire safety fitness rating structure. The agency also plans to review the list of regulations that it uses in its safety fitness methodology.

FMCSA had signaled in early 2022 that it planned to revisit a safety fitness determination (SFD) rulemaking. Under the Obama administration, the agency in 2016 had issued a notice of proposed rulemaking to use Safety Measurement System (SMS) data alone to rate carriers under certain circumstances. Even before the end of the Obama administration, FMCSA had indicated that it was not prepared to move forward with a final rule and that it would issue supplemental NPRM. However, the Trump administration withdrew the rulemaking altogether in March 2017. One of the reasons given for the withdrawal was the pending report from the National Academies of Sciences on SMS and the Compliance, Safety, Accountability program. In February, FMCSA requested comments on proposed changes to SMS.

FMCSA takes steps to address counteract fraudulent carriers

In an effort to combat the recent upswing in fraudulent carriers, FMCSA implemented a new requirement for updating a company’s registration record. Effective immediately, representatives of regulated entities must submit a copy of their driver’s licenses along with their MCS-150/150B/150C and/or MCSA-5889 forms. FMCSA said the additional verification steps help safeguard firms’ data and ensures accuracy. A notice of the new requirement is available is at https://www.fmcsa.dot.gov/registration/registration-forms.

Final guidance issued on definitions of brokers and bona fide agents

FMCSA in June issued final regulatory guidance concerning the agency’s interpretation of the definitions of “broker” and “bona fide agents” as directed by Congress in the 2021 law known as the Infrastructure Investment and Jobs Act. The agency had issued interim guidance in November 2022 and requested comments in advance of publishing final guidance.

The final guidance document makes several changes to the interim guidance. In response to the interim guidance, some stakeholders had asked FMCSA to clarify whether internet-based loading matching services and load boards are considered brokers. The agency determined that merely making information about potential shippers publicly available – regardless of whether a fee is charged – does not require an entity to obtain broker authority.

Another issue on which FMCSA issued a clarification was the statement that determining whether an entity representing more than one motor carrier is a broker or bona fide agent is “highly fact specific and will entail determining whether the person or company is engaged in the allocation of traffic between motor carriers.” Some commenters wanted more clarity on the term “allocation of traffic.” The agency responded that it intended the term to mean “any exercise of discretion, choice, or decision-making on the agent’s part about which motor carrier to assign a load.” FMCSA provided several examples in the final guidance.

Regarding the role of dispatch services, FMCSA concluded that it’s interim guidance is sufficient. That guidance was that the agency does not have statutory authority to regulated dispatch services unless those entities also meet the criteria for registration as brokers, freight forwarders, and/or motor carriers.

For the Federal Register notice of final guidance, visit https://www.federalregister.gov/d/2023-13080.

Truck Leasing Task Force holds inaugural session

FMCSA’s Truck Leasing Task Force (TLTF) on July 11 held its first meeting. The task force was mandated by the Infrastructure Investment and Jobs Act and chartered on February 11, 2022, although its members were not named until May of this year. TLFT’s purpose is to examine the terms, conditions, and equitability of common truck leasing arrangements, particularly as they impact owner-operators and trucking businesses subject to such agreements.

Much of the first meeting, which was held virtually, revolved around introductions, ethics guidelines, and other organizational activities. The key substantive discussions concerned identifying information and data needed for conducting the task force’s work as well as organizations and experts that should provide presentations or briefings. For more information on the TLTF and the initial meeting, visit https://www.fmcsa.dot.gov/tltf.

FMCSA plans to address mandate concerning carriers’ knowledge of regulations

FMCSA apparently plans to resurrect a 24-year-old statutory requirement that it conduct a rulemaking to require that motor carrier applicants demonstrate that they are knowledgeable about applicable federal motor carrier safety standards. Congress imposed the requirement in the Motor Carrier Safety Improvement Act of 1999, which is the legislation that created FMCSA.

According to the latest unified agenda, FMCSA intends to issue a supplemental advance notice of proposed rulemaking (ANPRM) in August, all those target dates tend to be very loose. The original ANPRM was published in August 2009. FMCSA is considering whether to implement a proficiency examination as part of its revised new entrant safety assurance process.

NHTSA, FMCSA plan to mandate automatic braking systems on new trucks

In a joint notice of proposed rulemaking, the National Highway Traffic Safety Administration and FMCSA proposed a new Federal Motor Vehicle Safety Standard (FMVSS) to require automatic emergency braking (AEB) systems on vehicles with a gross vehicle weight rating greater than 10,000 pounds. The agencies also propose to amend FMVSS No. 136 to require nearly all heavy vehicles to have an electronic stability control system that meets the equipment requirements, general system operational capability requirements, and malfunction detection requirements of FMVSS No. 136.

The 2021 law known as the Infrastructure Investment and Jobs Act directed the Department of Transportation to prescribe an FMVSS that requires heavy commercial vehicles with FMVSS-required electronic stability control systems to be equipped with an AEB system. The NPRM also follows a NHTSA’s 2015 grant of a petition for rulemaking submitted by truck safety advocacy groups to require AEBs on certain heavy vehicles.

Comments on the NPRM are due September 5. For the Federal Register notice, visit https://www.federalregister.gov/d/2023-13622.

CARB, truck makers reach agreement on emissions regulations

The California Air Resources Board and major commercial vehicle manufacturers in July announced an agreement on emissions regulations, including both nitrogen oxide (NOx) and greenhouse gases. Under the agreement, CARB will align its regulations for emissions with the Environmental Protection Agency’s model year 2027 regulations and modify elements of its 2024 NOx regulations for which manufacturers will provide offsets needed to meet California’s emissions targets. CARB also agreed to provide at least four years of lead time and at least three years of regulatory stability before imposing new requirements. The state also will work to develop the infrastructure needed to support zero-emission vehicles (ZEVs).

In exchange for those concessions, truck makers committed to meeting CARB’s ZEV and pollutant regulations regardless of whether other entities attempt to challenge the state’s authority to impose those requirements. Multiple entities representing carriers, such as the American Trucking Associations and the Western States Trucking Association, have been weighing litigation against CARB. One group that questioned the agreement is the Clean Freight Coalition, which includes among its members the Truck and Engine Manufacturers Association (EMA). EMA signed the agreement with CARB on behalf of truck manufacturers.

FMCSA clarifies reissuance date of guidance on its portal

FMCSA issued a notice clarifying that when it established a portal (https://www.fmcsa.dot.gov/guidance) for regulatory guidance on March 3, 2020, the guidance was essentially republished with an effective date of March 3, 2020. The notice also clarifies the reissuance dates for guidance posted between March 4 and June 27, 2020, during the “grace period.” For the Federal Register notice, visit https://www.federalregister.gov/d/2023-13033.

Driver denied request for a 5/5 split of sleeper berth time

FMCSA has denied an exemption requested by truck driver Matthew Killmer for an exemption that would have allowed him to split his sleeper berth time into two 5-hour periods. Killmer had argued that the exemption would allow him to be more alert and rested and would facilitate finding a safe place to park his commercial motor vehicle.

In denying the application, FMCSA said that although many commenters had supported Killmer’s request, they did not provide any evidence to show that the exemption likely would provide a level of safety equivalent to the current regulatory requirements. The agency acknowledged concerns over parking but said those concerns were not a valid basis for evaluating the application. For the Federal Register notice, visit https://www.federalregister.gov/d/2023-14303.

FMCSA to exempt recreational activity providers from authority registration

FMCSA is requesting comments by August 21 on its proposed regulation to implement a statutory exemption from the agency’s operating authority registration rules for providers of recreational activities. The exemption was enacted as part of the 2021 law known as the Infrastructure Investment and Jobs Act. The exemption would apply to motor carriers operating vehicles designed or used to transport between 9 and 15 passengers (including the driver) if the motor vehicle is operated by a person that provides recreational activities within a 150 air-mile radius of the location at which passengers initially boarded the motor vehicle. FMCSA also proposed to define recreational activities. For the Federal Register notice, visit https://www.federalregister.gov/d/2023-13081.

FMCSA grants exemption to allow use of LED flares solely

FMCSA has granted a five-year exemption to Pi Variables to allow commercial motor vehicle operators to use LED flares in place of place of bidirectional emergency reflective triangles, fusees, or liquid-burning flares when CMVs are stopped on the traveled portion or shoulder of a highway. The company had argued that that LED flares are preferable to liquid-burning flares and fusee flares as those can create a fire hazard, pollute water runoff, generate inhalation hazards and are not usable in situations where flammable material has been spilled. FMCSA determined that granting the exemption would likely achieve a level of safety equivalent to or greater than the level of safety provided by the regulations. For the Federal Register notice, visit https://www.federalregister.gov/d/2023-13205.

FMCSA still plans to study the human interaction with automated driving systems

FMCSA has requested comments by July 24 on its proposal to collect drivers’ responses to a series of questionnaires that the agency plans to use to help evaluate how commercial motor vehicle drivers engage with Level 2 advanced driver assistance systems (ADAS) and Level 3 automated driving systems. FMCSA initially had invited comment on its plans in September 2022, and the latest notice responds to that input as well as requests further comment. Approximately 100 drivers will participate in the study of non-driving secondary task engagement, transfer of control, and training on driver behavior in CMVs equipped with ADAS and ADS. For the Federal Register notice, visit https://www.federalregister.gov/d/2023-13366.

Legislation

House DOT funding bill would block speed limiters, address younger driver measures

The House Appropriations Committee on July 18 is scheduled to consider a funding bill for the Department of Transportation that would bar FMCSA from mandating speed limiters on heavy-duty trucks. Last year, FMCSA announced that it intended to move forward with a rule that would require carriers to use speed-limiting technology already installed on their truck engines.

The appropriations bill also would block two conditions FMCSA imposed on participation in the Safe Driver Apprenticeship Pilot Program, which Congress established in 2021 to test the use of commercial drivers aged 18 to 20 in interstate operations. The two conditions addressed in the bill are use of inward-facing cameras and carrier registration of an apprenticeship program with the Department of Labor. A serious challenge to the proposed changes to the younger driver pilot program is possible given that a similar measure did not have the votes in May to win approval by the House Transportation & Infrastructure Committee.

Advocacy and Comment

This summer brings several notable items on FMCSA’s agenda:

1. Last month, FMCSA issued final guidance on its dispatch services initiative. While the agency – to its credit – did not change the clear definition of broker or open the door for increased broker fraud masquerading as multiple agents, it missed an opportunity to address the identity fraud issue when unlicensed brokers fraudulently represent themselves as motor carriers or their exclusive agents.

2. The agency is taking steps to address fraud in the supply chain. Without any fanfare, FMCSA published a new alert and accompanying procedures for authorizing reinstatement requiring additional identification to accompany the application process. A part of the focused attention is on defective and perjurious new entrant applications. Clearly, whether a new entrant has a principal place of business and operates or owns equipment are essential questions that FMCSA should front-load into the application process.

3. FMCSA held its first Truck Leasing Task Force meeting, which was a delayed fulfillment of a congressional directive. While the Owner-Operator Independent Drivers Association and the Teamsters Union are represented, representation is lacking for the small carriers that must finance or lease their equipment. Abuses of the truth-in-leasing regulations, the contaminating control issue and de facto sham leases are major issues, but the first meeting avoided key topics, such as the regulations themselves, leaseback arrangements, or the control test analysis. With still-high truck prices, issues of equipment and driver longevity unresolved and affected by state and federal welfare and environmental changes, the scope of this task force as a policy issue is difficult to determine.

4. Finally, this month’s Regulatory Update notes that the White House’s Office of Management and Budget recently approved FMCSA’s advance notice of proposed rulemaking safety fitness determination. OMB approved the ANRPM at the end of June after just a couple of weeks of review, so the document presumably will be published in the very presumable will be published in the very near future.

We do not yet know what FMCSA’s notice will contain, but our ongoing coverage and prior efforts of the Obama administration certainly suggest what can anticipated. Ultimately, the agency can be expected to propose new regulations to replace the safety fitness rules and audit procedures which have been in place for decades. Meanwhile, systemic problems with using roadside inspections and DataQs as well as the data sufficiency and accuracy issues remain unsolved and unaddressed.

The legacy of CSA 2010 will be revisited in a rulemaking context, which will trigger the Administrative Procedure Act and the need for important findings of fact and law, which is subject to judicial appeal. Any FMCSA notice on this issue will be covered in subsequent months. Interested coalition partners, and those participating in past advocacy should prepare to monitor this issue closely and rank this issue as one of continuing importance.