[Federal Register Volume 85, Number 122 (Wednesday, June 24, 2020)]
[Rules and Regulations]
[Pages 37785-37805]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11464]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 350, 355, and 388

[Docket No. FMCSA-2017-0370]
RIN 2126-AC02


Motor Carrier Safety Assistance Program

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

ACTION: Final rule.

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SUMMARY: FMCSA amends two of the Agency's financial assistance 
programs. As required by the Fixing America's Surface Transportation 
(FAST) Act, FMCSA adopts a new funding formula based on recommendations 
from the Motor Carrier Safety Assistance Program (MCSAP) Formula 
Working Group (working group), effective for fiscal year (FY) 2021 
grant funds and beyond. This rule reorganizes the Agency's regulations 
to create a standalone subpart for the High Priority Program. It also 
includes other programmatic changes to reduce redundancies, require the 
use of 3-year MCSAP commercial vehicle safety plans (CVSPs), and align 
the financial assistance programs with FMCSA's current enforcement and 
compliance programs.

DATES: This final rule is effective July 24, 2020.
    Petitions for Reconsideration of this final rule must be submitted 
to the FMCSA Administrator no later than July 24, 2020.

FOR FURTHER INFORMATION CONTACT: Mr. Jack Kostelnik, State Programs 
Division, at FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-
0001; (202) 366-5721; jack.kostelnik@dot.gov. If you have questions on 
viewing or submitting material to the docket, contact Docket 
Operations, (202) 366-9826.

SUPPLEMENTARY INFORMATION: FMCSA organizes this final rule as follows:

I. Rulemaking Documents
    A. Availability of Rulemaking Documents
    B. Privacy Act
II. Executive Summary
    A. Purpose of the Regulatory Action
    B. Summary of Major Provisions
    C. Costs and Benefits
III. Abbreviations, Acronyms, and Symbols
IV. Legal Basis for the Rulemaking
V. Background and Proposed Rule
    A. Regulatory History

[[Page 37786]]

    B. Summary of the Proposed Rule
VI. Discussion of Comments and Responses
VII. International Impacts
VIII. Section-by-Section Analysis
    A. Subpart A--General
    B. Subpart B--MCSAP Administration
    C. Subpart C--MCSAP Required Compatibility Review
    D. Subpart D--High Priority Program
    E. Subpart E--Miscellaneous
IX. Guidance
X. Regulatory Analyses
    A. Executive Order (E.O.) 12866 (Regulatory Planning and 
Review), E.O. 13563 (Improving Regulation and Regulatory Review), 
and DOT Regulations
    B. E.O. 13771 (Reducing Regulation and Controlling Regulatory 
Costs)
    C. Congressional Review Act
    D. Regulatory Flexibility Act
    E. Assistance for Small Entities
    F. Unfunded Mandates Reform Act of 1995
    G. Paperwork Reduction Act
    H. E.O. 13132 (Federalism)
    I. Privacy
    J. E.O. 13175 (Indian Tribal Governments)
    K. National Environmental Policy Act of 1969

I. Rulemaking Documents

A. Availability of Rulemaking Documents

    For access to docket FMCSA-2017-0370 to read background documents 
and comments received, go to https://www.regulations.gov at any time, 
or to Docket Operations at U.S. Department of Transportation, Room W12-
140, West Building Ground Floor, 1200 New Jersey Avenue SE, Washington, 
DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except 
Federal holidays.

B. Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the 
public to better inform its rulemaking process. DOT posts these 
comments, without edit, including any personal information the 
commenter provides, to https://www.regulations.gov, as described in the 
system of records notice ``DOT/ALL 14--Federal Docket Management System 
(FDMS),'' which can be reviewed at https://www.transportation.gov/privacy.

II. Executive Summary

A. Purpose of the Regulatory Action

    The purpose of this regulatory action is to amend and reorganize 49 
CFR part 350, including adding relevant sections that are currently 
located in part 355, and to address certain regulations that are no 
longer necessary or are redundant. Moreover, the FAST Act requires 
FMCSA to implement a multi-year CVSP with annual updates for States \1\ 
applying for MCSAP funds and to provide a new MCSAP allocation formula. 
This rule implements the new MCSAP allocation formula, requires States 
to adopt 3-year CVSPs, and reorganizes the Agency's regulations to 
create a standalone subpart for the High Priority Program. FMCSA's 
primary legal authority for this rulemaking is Title V, Subtitle A of 
the FAST Act, Public Law 114-94, 129 Stat. 1312, 1514-34 (Dec. 4, 
2015).
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    \1\ Unless otherwise provided in this preamble, FMCSA uses the 
term ``State'' as including the District of Columbia and the 5 
Territories (American Samoa, the Commonwealth of the Northern 
Mariana Islands, the Commonwealth of Puerto Rico, Guam, and the 
Virgin Islands), consistent with 49 U.S.C. 31101(4).
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B. Summary of Major Provisions

    This rule implements a new MCSAP allocation formula that is 
effective for FY 2021 grant funds and beyond. The FAST Act required the 
Secretary of Transportation (Secretary) to assemble a working group to 
recommend a new MCSAP allocation formula. The Agency considered and 
fully adopts the recommendations of the working group.
    The new MCSAP allocation formula includes three components: State, 
Border, and Territory. The formula assigns each component a percentage 
of MCSAP funds. The State Component allocates funds using five equally-
weighted factors and then applies minimum and maximum caps to the 
allocated funding. The Border Component allocates funding based on the 
number of United States ports of entry and the number of commercial 
motor vehicle (CMV) crossings at those ports of entry, subject to 
minimum and maximum funding levels. This Border Component accounts for 
differences in the number of crossings per port of entry at the 
Northern border compared to the Southern border of the United States. 
Finally, the Territory Component ensures that each Territory, except 
for the Commonwealth of Puerto Rico (which is allocated funding under 
the State Component), receives a minimum funding amount of $350,000. 
The formula adds any funds not allocated under the Border or Territory 
Component to the State Component for allocation. The formula promotes 
stability in funding and protects States from experiencing significant 
and unpredicted changes by including a hold-harmless provision and a 
funding cap.
    This rule requires States to use CVSPs in accordance with the FAST 
Act, and provides direction to States on how and when to submit CVSPs 
on 3-year cycles. For the first year of the CVSP, States submit 
quantitative performance objectives, analysis of past performance, and 
other documents traditionally provided in an annual CVSP, as well as a 
budget for the initial year. For the second and third years of the 
CVSP, States submit an annual update that includes changes to the CVSP 
(including updates to performance objectives and adjustments to 
activities), a budget for the applicable fiscal year, and other 
documents required on an annual basis.
    FMCSA clarifies that it is a State's obligation to cooperate in the 
enforcement of hazardous materials safety permits for interstate and 
intrastate carriers issued under subpart E of 49 CFR part 385 by 
verifying possession of the permit when required while conducting 
vehicle inspections and investigations. This rule does not require 
States to adopt part 385 as a condition of receiving MCSAP funds, but 
States are strongly encouraged to do so to support a comprehensive CMV 
safety program.
    The rule also revises and reorganizes part 350. Currently, part 350 
intertwines the High Priority Program and MCSAP regulations, but some 
regulations do not apply to both programs. To provide clarity for the 
eligible recipients, this rule separates the two programs into 
different subparts in part 350. In addition, FMCSA adds relevant 
sections of part 355 to part 350. These changes address regulatory 
compatibility, reduce redundancy, and make part 350 more clear and 
concise.
    Finally, FMCSA removes part 388, titled ``Cooperative Agreements 
with States.'' FMCSA does not rely on part 388 provisions to enter into 
agreements with State partners because there is no specific funding for 
that part.

C. Costs and Benefits

    This rule adopts a new MCSAP allocation formula to replace the 
current formula that has been in use for more than a decade with little 
modification. The new formula makes several improvements over the 
current formula. The new formula will result in a reallocation of grant 
funding, beginning with FY 2021, but will not change the total amount 
of funds distributed.
    The rule requires States to use CVSPs in accordance with the FAST 
Act. It also provides direction to States on how and when to submit 
CVSPs on 3-year cycles. Under the current regulations, States submit 
lengthy CVSP applications annually to receive MCSAP funding. However, 
beginning in FY 2018, States began voluntarily submitting CVSPs on 3-
year cycles, as is now required by this rule. Following the 
implementation of

[[Page 37787]]

this rule, States will no longer be able to submit annual CVSP 
applications and must submit robust 3-year CVSP applications for the 
first year, with annual updates for the second and third years. Based 
on experience from voluntary implementation, FMCSA expects that 3-year 
CVSPs will be less burdensome and time consuming for States than 
submitting lengthy CVSP applications annually, which will result in 
lower program administrative costs. All 55 current MCSAP participants 
\2\ voluntarily transitioned to 3-year CVSPs, and thus, there is no 
impact from this change.
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    \2\ Currently, the 55 MCSAP participants consist of the States 
minus Oregon.
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III. Abbreviations, Acronyms, and Symbols

CE Categorical Exclusion
CFR Code of Federal Regulations
CHP Department of California Highway Patrol
CMV Commercial motor vehicle
CVSA Commercial Vehicle Safety Alliance
CVSP Commercial vehicle safety plan
DOT Department of Transportation
eCVSP Electronic commercial vehicle safety plan
E.O. Executive Order
FAST Act Fixing America's Surface Transportation Act
FHWA Federal Highway Administration
FMCSA Federal Motor Carrier Safety Administration
FMCSRs Federal Motor Carrier Safety Regulations
FR Federal Register
FY Fiscal year
HMRs Federal Hazardous Materials Regulations
MCSAP Motor Carrier Safety Assistance Program
MOE Maintenance of effort
NASI North American Standard Inspection
NOFO Notice of Funding Opportunity
NPRM Notice of proposed rulemaking
OMB Office of Management and Budget
PRISM Performance and Registration Information Systems Management
RFA Regulatory Flexibility Act
Sec.  Section
Secretary Secretary of Transportation
working group MCSAP Formula Working Group
U.S.C. United States Code
VMT Vehicle miles traveled

IV. Legal Basis for the Rulemaking

    FMCSA has and continues to issue the regulations found in 49 CFR 
parts 350 and 355 under the authority of 49 U.S.C. 504, 13902, 31101, 
31102, 31104, 31106, 31108, 31136, 31141, 31161, 31310, 31311, and 
31502.
    The primary basis for this rule is Title V, Subtitle A of the FAST 
Act, Public Law 114-94, 129 Stat. 1312, 1514-34 (Dec. 4, 2015), which 
consolidated several of FMCSA's financial assistance programs and 
authorized program funding levels through FY 2020. Key provisions, 
effective FY 2017, include section 5101, which amended 49 U.S.C. 31102, 
consolidating the former New Entrant, Performance and Registration 
Information Systems Management (PRISM), Safety Data Improvement, and 
Border Enforcement grant programs into the MCSAP formula grant. In 
addition, it established the High Priority Program as a separate 
discretionary financial assistance program for qualifying entities and 
projects relating to motor carrier safety and Innovative Technology 
Deployment. Section 5101 also amended 49 U.S.C. 31104, which 
prescribes, among other things, authorized funding levels through FY 
2020, the minimum Federal funding share applicable to these (and other) 
FMCSA financial assistance programs, and the periods of time in which 
awarded funds may be used.
    Section 5106 of the FAST Act (note following 49 U.S.C. 31102) 
required the Secretary to appoint a working group, consisting of 
prescribed stakeholder interests, to develop and recommend to the 
Secretary a new MCSAP allocation formula reflecting specified factors 
for the award of MCSAP funds. Following receipt of the working group's 
recommendations, section 5106 required the Secretary to issue a notice 
of proposed rulemaking (NPRM). The working group submitted its report 
on April 7, 2017, and an addendum to the report on January 8, 2019. As 
noted below, FMCSA issued its NPRM on August 22, 2019 (84 FR 44162).
    Section 5107 of the FAST Act (note following 49 U.S.C. 31102) 
addresses the maintenance of effort calculations for FY 2017 and 
subsequent fiscal years until the new MCSAP allocation formula is in 
place. It also allows States to request a one-time permanent adjustment 
to their maintenance of effort baselines in the first fiscal year of 
the new MCSAP allocation formula.
    FMCSA has authority under Federal hazardous materials 
transportation law, 49 U.S.C. 5101-5128, to require States to cooperate 
in the enforcement of Federal hazardous materials safety permit 
requirements as a condition to qualify for MCSAP funds. The purpose of 
the hazardous materials transportation law is ``to protect against the 
risks to life, property, and the environment that are inherent in the 
transportation of hazardous material in intrastate, interstate, and 
foreign commerce'' (49 U.S.C. 5101). Section 5109(a) provides that a 
``motor carrier may transport or cause to be transported by motor 
vehicle in commerce hazardous material only if the carrier holds a 
safety permit'' issued by FMCSA. The Secretary has authority to 
prescribe what hazardous materials require a safety permit (49 U.S.C. 
5109(b)). In addition, the Secretary has authority to require States to 
adopt provisions compatible with Federal provisions on hazardous 
materials transportation safety to receive MCSAP funds (49 U.S.C. 
31102(c)(1)). Exercising these authorities, this rule clarifies that 
States are required to cooperate in ensuring carriers transporting 
certain hazardous materials possess the required FMCSA hazardous 
materials safety permit.
    Any clarifying or non-substantive changes made by this final rule 
that are not explicitly attributed to the FAST Act or 49 U.S.C. 5101-
5128 are made under one or more of the statutory authorities listed at 
the beginning of this section. FMCSA implements these statutory 
provisions by delegation from the Secretary in 49 CFR 1.87.

V. Background and Proposed Rule

A. Regulatory History

    On August 22, 2019, FMCSA published an NPRM titled ``Motor Carrier 
Safety Assistance Program'' in the Federal Register (84 FR 44162). 
FMCSA received one comment requesting an extension of the comment 
period. On October 9, 2019, FMCSA published a notice extending the 
comment period to October 21, 2019 (84 FR 54093). FMCSA received three 
additional comments on the NPRM. No public meeting was requested and 
none was held.
    The NPRM included a detailed discussion of the background for this 
regulatory action, including the history of MCSAP, the FAST Act changes 
to MCSAP, a previous omnibus rule that implemented portions of the FAST 
Act, the working group, and States' voluntary transition to 3-year 
CVSPs. That discussion is not repeated here, but can be found in the 
published NPRM (84 FR at 44165-7).

B. Summary of the Proposed Rule

    A detailed summary of the proposed rule can be found in the NPRM 
(84 FR at 44167-72), which includes discussion of the separation of 
MCSAP and the High Priority Program provisions, the proposed MCSAP 
allocation formula, and the proposed 3-year CVSP requirements. It also 
included discussions of the following topics: (1) The proposed changes 
to fully implement the PRISM program; (2) the FMCSA Administrator's 
discretion to distribute funding during an extension of the Agency's 
authorization

[[Page 37788]]

or a period the Agency is operating under a continuing resolution; (3) 
the relocation to 49 CFR part 350 of relevant requirements of part 355 
relating to regulatory compatibility: (4) A State's obligation to 
cooperate in the enforcement of hazardous materials safety permits for 
interstate and intrastate carriers; and (5) the removal of 49 CFR part 
388 for which there is no specific funding and therefore no reliance by 
the Agency. Finally, FMCSA discussed changes to improve the 
organization of part 350, update definitions, and clarify when a State 
may retain an exemption for a particular segment of the motor carrier 
industry from all or part of its laws or regulations that were in 
effect before April 1988.

VI. Discussion of Comments and Responses

    FMCSA received four comments on the NPRM. The first comment 
requested an extension to the comment period, which was granted (as 
noted above in Regulatory History). The second comment was non-
responsive to the NPRM and, as such, is not discussed here. The 
Department of California Highway Patrol (CHP) and the Commercial 
Vehicle Safety Alliance (CVSA) submitted the remaining two comments. 
Both comments responded to the five questions posed in the NPRM. The 
Agency summarizes those comments below.
    Q.1. Are there other elements FMCSA should consider including in a 
new MCSAP allocation formula and, if so, what are they? Why should such 
elements be considered? How would they promote safety?
    Comments: Both the CHP and CVSA agreed with the MCSAP elements as 
proposed. CVSA stated that the ``working group conducted a rigorous 
review of the current formula components, as well as an extensive 
review of alternative data points before arriving at the final 
recommendation. The group used safety-based methodology and sought to 
balance the needs of individual [State] programs with the overarching 
goal of MCSAP. The final recommendations are designed to direct MCSAP 
funds to where they can most benefit overall commercial motor vehicle 
safety, while providing [S]tates with funding stability that enables 
program managers to plan and adjust their programs accordingly.'' CVSA 
also noted that any changes to the MCSAP elements should be subject to 
the same evaluation methodology and be based on the same priorities as 
those considered by the working group. The CHP commented that the 
funding allocations resulting from the proposed elements appropriately 
assist the CHP in promoting greater safety and compliance with 
regulatory requirements within the framework of current CHP operations 
that meet or exceed FMCSA grant program requirements.
    Response: FMCSA agrees with the commenters. As such, the Agency 
does not make any changes to the proposed elements included in the 
MCSAP allocation formula.
    Q.2. Should there be additional requirements in CVSPs to ensure 
MCSAP funding is used efficiently to promote safety and, if so, what 
are they? Why should such requirements be considered? How would they 
promote safety?
    Comments: CVSA responded that no additional requirements should be 
included and that additional requirements would not be effective. CVSA 
suggested that FMCSA should look for ways to reduce the burden on 
States by lessening current reporting requirements, particularly with 
respect to information to which the Agency has direct access or 
duplicative sections within the CVSP. The CHP suggested that there be a 
requirement to use ``commercially trained'' personnel when MCSAP money 
is used.
    Response: The Agency commits to look for ways to minimize burden by 
reviewing reporting requirements as a part of its annual review of CVSP 
design.
    Existing paragraph (p) of Sec.  350.211 provides a State must 
certify that MSCAP-funding personnel (including sub-grantees) meet the 
standards in 49 CFR part 385, subpart C, for performing inspections, 
audits, and investigations. Rather than repeating all the 
certifications that correspond to the conditions States must meet to 
qualify for MCSAP funds, as in existing Sec.  350.211, new Sec. Sec.  
350.211(i)(1)(i) and 350.213(e)(1)(i) provide that States must certify 
they meet all the MCSAP conditions in proposed Sec.  350.207. The 
relevant condition as proposed in Sec.  350.207(a)(6) required more 
broadly that States must provide assurances they have the ``qualified 
personnel necessary to enforce compatible safety laws, regulations, 
standards, and orders.'' The Agency agrees with the CHP comment that 
the added specificity in existing Sec.  350.211(p) provides clarity 
regarding what ``qualified personnel'' includes. Accordingly, FMCSA 
modifies Sec.  350.207(a)(6) to include language that clarifies 
certified personnel are required.
    Q.3. Should the Incentive Fund be eliminated from a new MCSAP 
allocation formula? Why should the Incentive Fund be kept or 
eliminated? How would keeping or eliminating the Incentive Fund promote 
safety?
    Comments: CVSA recommended elimination of the Incentive Fund. CVSA 
commented that the ``Incentive Fund model does not fit within the 
proposed structure, as it is not correlated with crash risk, nor does 
it provide stable, reliable funding for the jurisdictions.'' It 
continued, as noted by the working group, ``the factors used in the 
incentive model are no longer relevant. Distributing funds through the 
incentive model does not ensure that funds are being spent where they 
can have the most direct impact on safety.''
    The CHP stated that the Incentive Fund does not account for 
statistical anomalies over the 10-year crash average, allowing single 
or multiple mass-casualty events in a given year (i.e., an outlier 
event) to skew allocation of incentive funding. The CHP noted, if the 
Incentive Fund is retained, it should be modified to allow the 
exclusion of statistical outlier events.
    Response: As the working group and CVSA noted, the factors used in 
the Incentive Fund are no longer relevant. Thus, as proposed by the 
working group and in the NPRM, the Agency eliminates the Incentive 
Fund.
    Q.4. Should a new MCSAP allocation formula include variables 
connected with crash rates or risk? If so, what variables should be 
considered and why? How would such variables promote safety?
    Comments: CVSA recommended basing allocations on crash risk 
variables, as proposed by the working group. CVSA noted that the 
working group considered a number of different variables and measures 
before concluding that using crash risk, rather than crash rates or 
other crash-related metrics, would most effectively allocate funds to 
improve safety. CVSA stated ``[f]ocusing on crash rates may have the 
unintentional effect of moving funds away from a jurisdiction that has 
a higher risk of crashes but has been successful in reducing the 
occurrence of those crashes through implementation of their enforcement 
and outreach programs.''
    The CHP agreed with using crash rate variables, but noted the need 
to adjust crash rates to ensure that outlier events weigh less heavily 
than the overall number of crashes, to avoid results that present an 
inaccurate crash picture. The CHP continued that ``crash trends 
indicate a more accurate reflection of the true impacts of enforcement 
effectiveness than the sheer number of fatalities in a single 
[crash].''

[[Page 37789]]

    Response: FMCSA acknowledges the comments, which are in line with 
the formula proposed by the working group and included in the NPRM that 
bases allocations on crash risk variables. Because FMCSA eliminates the 
Incentive Fund and the MCSAP formula factors do not use crash rate 
data, the MCSAP allocation formula adopted in this rule should not 
produce the unintentional effects identified by CVSA and the CHP. 
Accordingly, the Agency does not change the proposed formula in this 
rule.
    Q.5.\3\ Should a new MCSAP allocation formula be more sensitive to 
changes in crash rates? If so, how could a new allocation formula be 
more sensitive to changes in crash rates and why would it be more 
sensitive to such changes? How would such a formula promote safety?
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    \3\ As noted by the CHP, the NPRM lists two questions numbered 
``4,'' instead of a question number 4 followed by a question number 
5. Both the CHP and CVSA labelled their comments as responses to 
question 5; therefore, FMCSA does the same in this final rule.
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    Comments: CVSA responded that the proposed allocation formula 
already balances a number of different factors, such as crash risk, 
with States' need for reliability and continuity in funding. CVSA 
recommended that FMCSA consider any suggested changes to the proposed 
formula carefully, as changes will likely disrupt the balance and have 
a negative impact on the overall performance of the new formula. While 
relationship to crash risk is a critical factor, CVSA responded that it 
is imperative that funds not shift too quickly or unpredictably. If 
States are not confident in the timing and amount of grant funding, 
they will be reluctant to fill positions, continue enforcement 
programs, or engage in bold new initiatives. The CHP commented that a 
formula that is more sensitive to changes in crash rates would harm 
States with outlier events, causing a reduction in funding for 
otherwise successful enforcement and education programs.
    Response: FMCSA agrees that an allocation formula that focuses on 
crash rates can have unintended consequences and harm States when an 
outlier event occurs. Basing the formula on crash risk, rather than 
crash rates, most effectively allocates funds to improve safety. The 
careful balance in the allocation formula of crash risk and 
predictability in funding is integral to ensuring robust safety 
programs and innovation. As such, the Agency makes no changes to the 
proposed formula in this rule.

Additional Comments

    CVSA also provided several additional comments. Some were more 
general in nature, and others were suggestions related to one or more 
specific sections, as reflected in the below discussion of those 
comments.
    CVSA supported FMCSA's efforts to revise part 350 to make necessary 
updates and clean up irrelevant sections because clarity and uniformity 
in the regulations are the cornerstones of an effective, consistent 
enforcement program. CVSA supported separate subparts for the 
requirements of MCSAP and the High Priority Program and the new 
requirements for CVSPs, stating these changes bring additional clarity 
to the regulations, improving States' ability to understand and comply 
with the requirements in part 350. As discussed above, CVSA supported 
the adoption of the recommendations set forth by the working group 
included in this rule. CVSA encouraged FMCSA to continue working to 
improve the existing data sets and identify potential new ones.
Section 350.103 When do the financial assistance program changes take 
effect?
    Comment: CVSA noted FMCSA proposed to implement the changes 
beginning with FY 2020; however, the comment period for the rulemaking 
ended after the beginning of the fiscal year. CVSA stated that the 
Agency should not move ahead with implementing the new allocation 
formula until after the close of the comment period and the Agency 
issues its final rule. Noting that States and FMCSA need time to 
prepare for and adjust their programs, CVSA recommended that the Agency 
implement the allocation formula and changes to part 350 beginning with 
FY 2021.
    Response: FMCSA agrees that States need time to prepare for the 
changes and adjust their programs accordingly. Therefore, FMCSA 
modifies Sec.  350.103 to provide that the changes to part 350 take 
effect for FY 2021 financial assistance funds and beyond.
Section 350.105 What definitions are used in this part?
    Comment: CVSA supported the definition changes FMCSA proposed with 
one exception. It requested that the definition for the North American 
Standard Inspection (NASI) include attribution to CVSA, as CVSA owns 
all rights to non-regulatory elements created within the NASI.
    CVSA agreed with the proposed elimination of an exception for 49 
CFR 171.15 and 171.16 in the definition of Hazardous Materials 
Regulations (HMRs) and stated it would improve reporting and data 
collection. However, CVSA noted the preamble discussion made it appear 
the referenced sections apply only to investigations and not to 
roadside inspections, but it found the discussion unclear. CVSA 
requested that the Agency clarify how this change would impact roadside 
inspections, or add language explaining it applies only to 
investigations.
    Response: With respect to the request to acknowledge CVSA's role in 
the development of the NASI, FMCSA revises the proposed definition to 
continue use of the language in existing Sec.  350.105. The existing 
definition states that FMCSA and CVSA developed the inspection 
criteria.
    Sections 171.15 and 171.16 contain requirements to provide a 
telephone or online report to the Pipeline and Hazardous Materials 
Safety Administration (PHMSA) through the National Response Center 
within 12 hours of a reportable incident (as defined by Sec.  171.15) 
and a written report to PHMSA within 30 days of a reportable incident 
(as defined by Sec.  171.16). Because the timing of these reports is 
tied to specific incidents, they are not generated and enforced through 
commercial vehicle inspections. This should provide the clarity CVSA 
requested.
Sections 350.201 What is MCSAP? and 350.207(a)(2) What conditions must 
a State meet to qualify for MCSAP funds?
    Comment: CVSA expressed concern that the proposed regulations were 
ambiguous in terms of what States must do to qualify for MCSAP funding. 
Specifically, proposed Sec.  350.201(b)(3) required States to ``[a]dopt 
and enforce effective motor carrier, CMV, and driver safety regulations 
and practices consistent with Federal requirements.'' Proposed Sec.  
350.207(a)(2) provided that to qualify for MCSAP funds a State must 
improve motor carrier safety ``by adopting and enforcing compatible 
safety laws and regulations, standards, and orders.'' CVSA noted the 
inconsistent language and that the proposed regulations no longer 
spelled out precisely which Federal Motor Carrier Safety Regulations 
(FMCSRs) and HMRs must be adopted by States to have compatible laws. 
CVSA requested that FMCSA revise the language to specifically identify 
which parts must be adopted.
    Response: With respect to Sec.  350.201(b)(3), CVSA points out an 
unintended consequence of the proposed language. FMCSA intended Sec.  
350.201 to be an overview of the goals

[[Page 37790]]

and purposes of MCSAP. The Agency further intended paragraph (b) to be 
a restatement of existing Sec.  350.103 regarding the purpose of part 
350, which restates the goals of MCSAP in 49 U.S.C. 31102(b). By 
replacing the introductory paragraph of existing Sec.  350.103 with the 
phrase ``MCSAP requires States to'' in proposed Sec.  350.201(b) for 
brevity, the Agency appeared to add new requirements for States that 
were inconsistent with those stated in the conditions of participation 
in proposed Sec.  350.207. This was not FMCSA's intent. To address this 
issue, FMCSA replaces the phrase ``MCSAP requires States to'' with a 
slightly modified version of the introductory paragraph in existing 
Sec.  350.103. FMCSA also makes changes in Sec.  350.201(b)(3) to 
maintain consistency in the use of the term ``compatible,'' as 
discussed in the next paragraph.
    CVSA correctly points out that, except for the definition section, 
the proposed regulations no longer spelled out precisely which FMCSRs 
and HMRs States had to adopt to have compatible laws. One of the 
Agency's goals for this rulemaking is to provide clarity for States 
with respect to compatibility issues. Currently, there are duplicative 
regulations addressing compatibility and inconsistent terminology is 
used when discussing compatibility. This understandably confused 
States. FMCSA addresses these issues by (1) integrating pertinent 
provisions of part 355 into part 350 to improve the organization and 
eliminate duplication of the compatibility regulations, and (2) using 
clearly defined terms consistently throughout part 350. As such, the 
Agency defines ``compatible'' and ``compatibility'' as terms of art in 
Sec.  350.105 using the terms ``FMCSRs'' and ``HMRs.'' In turn, the 
Agency defines the terms ``FMCSRs'' and ``HMRs'' in Sec.  350.105 by 
stating the specific regulatory parts included in those definitions 
that States must adopt. The intent is to simplify the regulatory text 
and improve consistency by substituting defined terms of art instead of 
lengthy repetitions of the parts of the regulations States must adopt 
and enforce, which are prone to being stated inconsistently. Because 
FMCSA's approach differs from what States are accustomed to, FMCSA 
revises the proposed regulatory text in this final rule to include 
cross-references to Sec.  350.105 the first time ``compatible'' or 
``compatibility'' is used in a section to remind readers to consult the 
specific regulatory definition.
    While reviewing the new terms in proposed Sec.  350.105 to respond 
to CVSA's comment, the Agency noticed the proposed definition of 
``compatible'' and proposed Sec.  350.303(d) conflicted with the 
underlying statutory provision in 49 U.S.C. 31141(c). Paragraph (c)(4) 
of that statutory section provides a State law or regulation on CMV 
safety (a CMV is defined in 49 U.S.C. 31132 to mean, in part, a vehicle 
used in interstate commerce) that is in addition to or more stringent 
than the FMCSRs may be enforced unless the Secretary decides that (A) 
the State provision has no safety benefit; (B) the State provision is 
incompatible with the FMCSRs; or (C) enforcement of the State provision 
would cause an unreasonable burden on interstate commerce (49 U.S.C. 
31141(c)(4)). FMCSA included the criteria in proposed Sec.  350.303. 
Proposed Sec.  350.303(d)(2)(iii) provided that, for such State 
provisions to be compatible with the FMCSRs and enforceable, the State 
had to demonstrate that (A) the State provisions had a safety benefit; 
(B) the State provisions were compatible with the FMCSRs; and (C) 
enforcement would not cause an unreasonable burden on interstate 
commerce. In doing so, FMCSA inadvertently created a standard to 
determine ``compatibility'' that uses the term ``compatible,'' which 
would effectively nullify some of the standard. Thus, FMCSA must align 
the regulations with the underlying statutory authority.
    The Agency corrects this regulatory conflict by changing Sec.  
350.303(d)(2)(ii) to provide that the State must demonstrate, in part, 
a law, regulation, standard, or order on CMV safety that is in addition 
to or more stringent than the FMCSRs ``does not unreasonably frustrate 
the Federal goal of uniformity.'' This change emphasizes the need for 
uniformity while providing flexibility to States with innovative safety 
requirements that are not identical to the national norm. Similarly, 
the Agency modifies the definition of ``compatible or compatibility'' 
in Sec.  350.105 relating to interstate commerce to incorporate the 
statutory standard (as set forth in Sec.  350.303(d)(2)(ii)) to ensure 
there is no discrepancy between statute and regulation.
Section 350.207(a)(28) What conditions must a State meet to qualify for 
MCSAP funds?
    Comment: CVSA expressed support for the addition in proposed Sec.  
350.207(a)(28) that States document compliance with hazardous materials 
safety permit requirements in the course of inspections they conduct. 
It noted, however, that States would need additional time to adopt 49 
CFR part 385.
    Response: FMCSA clarifies that the rule does not require States to 
adopt part 385, but States are strongly encouraged to do so to support 
a comprehensive CMV safety program. States must cooperate in the 
enforcement of hazardous materials safety permit requirements under 
part 385 by verifying possession of the permit when required while 
conducting vehicle inspections and investigations. States are not 
required, however, to investigate or enforce violations under part 385. 
This change fosters communication between States and FMCSA by having 
State enforcement personnel verify the presence of a hazardous 
materials safety permit, when required, during vehicle inspections and 
investigations that States conduct so FMCSA can take appropriate 
enforcement action when warranted. FMCSA revises the proposed 
regulatory text to clarify the requirement for States regarding 
hazardous materials safety permits.
Section 350.211 What must a State include for the first year of the 
CVSP?
    Comment: CVSA opposed removing the requirement that a State submit 
a training plan as part of the CVSP process. It stated that training 
for inspectors is critical to a uniform, effective national inspection 
program and that currently inspectors do not receive enough training. 
CVSA said that removing the requirement could result in a jurisdiction 
putting less focus on training, impacting both the State's program and 
the national program negatively.
    Response: FMCSA disagrees. While the existing regulations include a 
requirement for States to include training plans, the electronic 
commercial vehicle safety plan (eCVSP) does not include the training 
plans, and has not since the eCVSP's implementation in 2013. At that 
time, a direct reporting process between the States and the National 
Training Center replaced the State training plans. FMCSA has not 
observed adverse effects on inspector training because of the direct 
reporting process. FMCSA will include information in the annual MCSAP 
application announcement indicating how a State may report its training 
plan to the National Training Center if the State wishes to do so.
Section 350.219 How are MCSAP funds awarded under a continuing 
resolution or an extension of FMCSA's authorization?
    Comment: Section 350.219 clarifies the grant funding distribution 
process the Administrator may use in the event

[[Page 37791]]

of an extension of FMCSA's authorization or a continuing resolution 
impacting the Agency's budget. CVSA stated that it does not object to 
the proposed approach, but requested that FMCSA add a specific 
authority citation for clarity. CVSA also requested examples of when 
and how FMCSA applied this authority in the past.
    Response: Adding a specific authority citation to Sec.  350.219 
would not clarify the distribution process the Administrator may use in 
the event of an extension of the Agency's authorization or during a 
period the Agency operates under a continuing resolution. As stated in 
the NPRM, the Administrator's discretion to distribute funds in such 
situations is found generally in 49 U.S.C. 31102. Section 31102 
authorizes the Secretary to administer MCSAP. The Secretary's authority 
is delegated to FMCSA's Administrator in 49 CFR 1.87(f).

VII. International Impacts

    The FMCSRs, and any exceptions to the FMCSRs, apply only within the 
United States (and, in some cases, United States Territories). Motor 
carriers and drivers are subject to the laws and regulations of the 
countries in which they operate, unless an international agreement 
states otherwise. Drivers and carriers should be aware of the 
regulatory differences among nations.

VIII. Section-by-Section Analysis

    Unless explicitly set forth below, FMCSA adopts the sections as 
proposed in the August 22, 2019 NPRM. The Agency makes some revisions 
in response to comments and to correct regulatory language not aligned 
with its underlying statutory authority. Otherwise, the final rule 
makes only minor editorial and grammatical changes to improve clarity 
or readability, use consistent phrases, conform style, or correct 
typographical errors.

A. Subpart A--General

    Subpart A provides a general overview and defines the terms used in 
part 350, applicable to both MCSAP and the High Priority Program.
Sec.  350.101 What is the purpose of this part?
    FMCSA adopts Sec.  350.101 as proposed.
Sec.  350.103 When do the financial assistance program changes take 
effect?
    The Agency revises Sec.  350.103 to provide that the changes to the 
financial assistance programs take effect for FY 2021, which begins on 
October 1, 2020, rather than for FY 2020 as proposed. This change 
accounts for the timing of the issuance of this rule, which is too late 
to allow for use of the new MCSAP formula in time for FY 2020 grants. 
FMCSA removes the qualifier ``[u]nless otherwise provided'' because 
there are now no effective dates other than October 1, 2020 provided in 
part 350. FMCSA adds ``financial assistance funds and beyond'' at the 
end of the section to clarify that the changes will continue in effect 
for financial assistance funds awarded in subsequent fiscal years.
Sec.  350.105 What definitions are used in this part?
    The Agency adds a sentence in the introductory paragraph to remind 
readers that terms used in part 350 but not defined in Sec.  350.105 
are subject to the definitions in 49 CFR part 390.
    With the exceptions discussed below, FMCSA adopts the definitions 
as proposed with only minor editorial changes.
    FMCSA revises the definition of ``compatible or compatibility'' to 
align with and incorporate the standard in 49 U.S.C. 31141(c) regarding 
when a State may enforce a law, regulation, standard, or order on CMV 
safety that is in addition to or more stringent than the FMCSRs. In 
paragraph (1) pertaining to interstate commerce not involving hazardous 
materials, the standard of paragraph (1) of proposed Sec.  350.105 
becomes subparagraph (i). New subparagraph (ii) addresses State 
provisions that are in addition to or more stringent than the FMCSRs. 
When read together, the definition defines these particular State 
provisions as compatible with the FMCSRs when (1) they are identical to 
or have the same effect as the FMCSRs, or (2) if in addition to or more 
stringent than the FMCSRs, they have a safety benefit, do not 
unreasonably frustrate the Federal goal of uniformity, and do not cause 
an unreasonable burden on interstate commerce when enforced. In 
paragraph (2)(ii) pertaining to intrastate commerce not involving 
hazardous materials, FMCSA removes and replaces ``subpart C of this 
part'' with ``Sec.  350.305 or Sec.  350.307'' to more specifically 
identify the sections addressing intrastate variances. The Agency adds 
language in paragraphs (1) and (2) to clarify that the standards apply 
only to commerce ``not involving the movement of hazardous materials.'' 
Paragraph (3) remains as proposed.
    As explained above, the Agency changes the definition of ``North 
American Standard Inspection'' to continue use of the definition in 
existing Sec.  350.105. The definition reads: ``North American Standard 
Inspection means the methodology used by State CMV safety inspectors to 
conduct safety inspections of CMVs. This consists of various levels of 
inspection of the vehicle or driver or both. The inspection criteria 
are developed by FMCSA in conjunction with the Commercial Vehicle 
Safety Alliance (CVSA), which is an association of States, Canadian 
Provinces, and Mexico whose members agree to adopt these standards for 
inspecting CMVs in their jurisdiction.''
    In the definition of ``State,'' FMCSA adds the phrase ``unless 
otherwise specified in this part'' to emphasize that ``State'' is 
defined differently in some sections.

B. Subpart B--MCSAP Administration

    Subpart B provides an overview of MCSAP only. FMCSA revises the 
title to use the defined acronym for the Motor Carrier Safety 
Assistance Program.
Sec.  350.201 What is MCSAP?
    In Sec.  350.201(b), the Agency changes the paragraph title to 
``MCSAP purpose'' to reflect, as explained above, that this section is 
a restatement of existing Sec.  350.103 about the purpose of part 350, 
which restates the goals of MCSAP in 49 U.S.C. 31102(b). In addition, 
FMCSA replaces the phrase ``MCSAP requires States to'' with a slightly 
modified version of the introductory paragraph in current Sec.  350.103 
regarding the purposes of part 350, to correct the unintentional 
appearance of imposing new requirements on States to receive MCSAP 
funds. The introductory language reads: ``The purpose of MCSAP is to 
ensure FMCSA and States, local government agencies, other political 
jurisdictions, Federally-recognized Indian Tribes, and other 
organizations and persons work in partnership to establish programs to 
improve motor carrier, CMV, and driver safety to support a safe and 
efficient transportation system by--.'' The Agency also makes 
conforming grammatical changes. Finally, FMCSA removes the phrases 
``consistent with Federal requirements'' and ``regulations and 
practices'' from proposed paragraph (b)(3) and uses the defined term 
``compatible'' and the phrase ``laws, regulations, standards, and 
orders'' to ensure consistent use of defined terms and phrases in part 
350. Paragraph (b)(3) reads: ``Adopting and enforcing effective and 
compatible (as defined in Sec.  350.105 of this part) motor carrier, 
CMV, and driver safety laws, regulations, standards, and orders.''

[[Page 37792]]

Sec.  350.203 What are the national MCSAP elements?
    FMCSA adopts Sec.  350.203 as proposed.
Sec.  350.205 What entities are eligible for funding under MCSAP?
    FMCSA adopts Sec.  350.205 as proposed.
Sec.  350.207 What conditions must a State meet to qualify for MCSAP 
funds?
    In Sec.  350.207(a)(2), the Agency adds a cross reference to Sec.  
350.105 for the definition of ``compatible.'' In Sec.  350.207(a)(6), 
FMCSA clarifies that the Lead State Agency must give satisfactory 
assurances in the CVSP that the Lead State Agency ``and any 
subrecipient of MCSAP funds'' has the legal authority, resources, and 
qualified personnel necessary to enforce compatible laws, regulations, 
standards, and orders on CMV safety, consistent with current MCSAP 
requirements. As explained above, FMCSA also adds language in paragraph 
(a)(6) to clarify that only MCSAP-funded personnel certified in 
accordance with 49 CFR part 385, subpart C, may perform inspections, 
audits, and investigations. In Sec.  350.207(a)(28), the Agency 
clarifies that a State's requirement with respect to hazardous 
materials safety permits is limited to verifying possession of the 
permit when required while conducting vehicle inspections and 
investigations, as applicable.
Sec.  350.209 How and when does a State apply for MCSAP funds using a 
CVSP?
    FMCSA changes the words ``MCSAP application memorandum'' to ``MCSAP 
application announcement'' in Sec.  350.209(b).
Sec.  350.211 What must a State include for the first year of the CVSP?
    FMCSA changes the beginning of several paragraphs from ``The first 
year of the CVSP . . .'' to ``For the first year of the CVSP, . . .'', 
with conforming changes to the sentences, for consistency across the 
sections. In Sec.  350.211(a)(1) and (k), the Agency changes the words 
``MCSAP application memorandum'' to ``MCSAP application announcement.'' 
In Sec.  350.211(i)(1)(ii), FMCSA changes the phrase ``the State 
maintains required compatibility'' to ``State laws, regulations, 
standards, and orders on CMV safety are compatible (as defined in Sec.  
350.105 of this part)'' to have consistent terminology with Sec.  
350.213(e)(1)(ii). Finally, in paragraph (j), the Agency changes the 
phrase ``that was enacted by the State since the last CVSP or annual 
update was submitted'' to ``that was enacted by the State since the 
prior year's submission'' to use consistent terminology in the sections 
and avoid confusion.
Sec.  350.213 What must a State include for the second and third years 
of the CVSP?
    In Sec.  350.213(a), FMCSA changes ``a State must submit'' to ``a 
Lead State Agency must submit'' to use consistent terminology in the 
sections. In Sec.  350.213(a) and (g), the Agency changes the words 
``MCSAP application memorandum'' to ``MCSAP application announcement.'' 
The Agency changes the words ``prior year's CVSP'' in paragraph (a) and 
``last CVSP or annual update was submitted'' in paragraph (f) to 
``prior year's submission'' to use consistent terminology in the 
sections and avoid confusion. In Sec.  350.213(e)(1)(ii), FMCSA adds a 
cross reference to Sec.  350.105 for the definition of ``compatible.''
Sec.  350.215 What response does a State receive to its CVSP?
    FMCSA changes the section title for clarity. In Sec.  
350.215(a)(1)(ii)(B), the Agency adds a cross reference to Sec.  
350.105 for the definition of ``compatible.'' Also, some of the 
regulatory text detailing the Agency response to the annual update 
submission was inadvertently left out of paragraph (b)(1). FMCSA adds 
the phrase ``because the annual update'' as a lead-in to new paragraphs 
(A) and (B) in Sec.  350.215(b)(1)(ii), which features the same 
language as in Sec.  350.215(a)(1)(ii) related to the Agency response 
for the first year of the CVSP.
Sec.  350.217 How are MCSAP funds allocated?
    In Sec.  350.217(e), the Agency makes minor edits to clarify how 
the hold-harmless provision and funding cap are calculated. FMCSA adds 
the quoted language to paragraph (1) to clarify that the dollar amounts 
calculated under paragraphs (c)(6) and (d)(5) of Sec.  350.217 will be 
totaled ``for each State'' and then divided by the total MCSAP funds 
``available for allocation under paragraphs (c) and (d) of this 
section'' to determine a State's percentage of the total MCSAP funds. 
In paragraph (2), the Agency changes the location of the word ``total'' 
at the beginning of the paragraph so the text reads ``percentage of 
total MCSAP funding.'' FMCSA also clarifies that the total MCSAP 
funding in the prior year does not include amounts allocated to 
American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, 
and the Virgin Islands. In paragraph (3), the Agency adds a cross 
reference to clarify the State's percentage of MCSAP funds allocated 
for the prior fiscal year is ``as calculated under paragraph (e)(2) of 
this section.''
Sec.  350.219 How are MCSAP funds awarded under a continuing resolution 
or an extension of FMCSA's authorization?
    In Sec.  350.219, FMCSA deletes the words ``appropriations act'' 
after ``continuing resolution'' in the title and introductory clause of 
the section.
Sec.  350.221 How long are MCSAP funds available to a State?
    FMCSA adopts Sec.  350.221 as proposed.
Sec.  350.223 What are the Federal and State shares of costs incurred 
under MCSAP?
    FMCSA changes the words ``FMCSA policy'' to ``the MCSAP application 
announcement'' in Sec.  350.223(b)(1) and (2) to clarify where States 
can find eligible costs. FMCSA also changes the words ``MCSAP 
application memorandum'' to ``MCSAP application announcement'' in Sec.  
350.223(c)(2)(i).
Sec.  350.225 What MOE must a State maintain to qualify for MCSAP 
funds?
    In the introductory paragraph of Sec.  350.225(a), FMCSA deletes 
the phrase ``equal to the average aggregate expenditure of the Lead 
State Agency'' because it is redundant. Section 350.225 reflects, in 
paragraphs (a)(2) and (e), that the grants issued for FY 2021 will be 
the first year of grants using the new MCSAP allocation formula. 
Paragraph (b)(5) now includes a cross reference to Sec.  350.223 to 
further clarify that the MOE calculation excludes a State's matching 
funds. Paragraph (c) now includes clarifying language regarding 
eligible costs for the calculation of the MOE and expenditures under 
the current MOE.
Sec.  350.227 What activities are eligible for reimbursement under 
MCSAP?
    In Sec.  350.227(c), FMCSA separates the introductory paragraph 
into paragraph (1) to provide the provisions for State traffic laws and 
regulations relating to CMVs and a paragraph (2) for those provisions 
relating to non-CMVs, to clarify that the qualifications for 
reimbursement of traffic enforcement activities apply only to 
enforcement of laws and regulations relating to non-CMVs. In doing so, 
FMCSA moves the phrase ``when necessary to promote the safe operation 
of CMVs'' to a new paragraph (c)(2)(i) to further clarify that it is a 
qualification for reimbursement. The Agency redesignates the following 
paragraphs accordingly. With the addition of the new paragraph 
(c)(2)(i), FMCSA deletes the redundant phrase

[[Page 37793]]

``when necessary to promote the safe operation of CMVs'' in paragraph 
(c)(2)(iii).
Sec.  350.229 What specific costs are eligible for reimbursement under 
MCSAP?
    In Sec.  350.229(a), FMCSA deletes the words ``FMCSA policy,'' 
changes the words ``MCSAP application memorandum'' to ``MCSAP 
application announcement,'' and clarifies where States can find 
eligible costs. In paragraph (b), FMCSA changes the words ``MCSAP 
application memorandum'' to ``MCSAP application announcement.''
Sec.  350.231 What are the consequences for failure to meet MCSAP 
conditions?
    FMCSA adopts Sec.  350.231 as proposed.

C. Subpart C--MCSAP-Required Compatibility Review

    Subpart C includes information related to the MCSAP-required 
compatibility review and variances for intrastate commerce available to 
States participating in MCSAP.
Sec.  350.301 What is the purpose of this subpart?
    In the introductory paragraph, FMCSA adds a cross reference to 
Sec.  350.105 for the definition of ``compatibility.''
Sec.  350.303 How does a State ensure compatibility?
    In Sec.  350.303(a), FMCSA adds a cross reference to Sec.  350.105 
for the definition of ``compatibility.'' FMCSA revises paragraph (d) to 
conform to that definition in substance and organization by setting 
forth the standards applicable to each type of commerce in separate 
paragraphs, and to use the terms ``compatible'' and ``compatibility'' 
consistently. FMCSA moves proposed paragraph (d)(2)(i) to paragraph 
(d)(1) with minor edits. The Agency specifies that the State must 
determine whether its laws, regulations, standards, and orders are 
identical to or have the same effect as, are in addition to or more 
stringent than, or are less stringent than the FMCSRs, or are identical 
to the HMRs. FMCSA removes the words ``corresponding provision of'' and 
``provisions of,'' as they are unnecessary.
    In paragraph (d)(2), FMCSA adds an introductory clause providing 
that the paragraph applies to interstate commerce not involving the 
movement of hazardous materials. To align the regulations with the 
underlying statutory authority as mentioned above, the Agency revises 
and renumbers proposed paragraphs (d)(2)(ii) through (d)(2)(iv) as 
paragraphs (d)(2)(i) through (d)(2)(iii) to address the enforceability 
of State provisions that are identical to or have the same effect as, 
are in addition to or more stringent than, and are less stringent than 
the FMCSRs, each in its own separate paragraph. In paragraph (d)(2)(ii) 
(relating to State provisions that are in addition to or more stringent 
than the FMCSRs), FMCSA changes the language from ``[i]t is compatible 
with the FMCSRs'' to ``does not unreasonably frustrate the Federal goal 
of uniformity.'' In paragraph (d)(2)(iii) (relating to State provisions 
that are less stringent than the FMCSRs), the Agency removes the 
proposed language providing ``unless it falls within the provisions of 
Sec. Sec.  350.305 or 350.307'' and moves it to paragraph (d)(3)(ii) 
because it is only applicable to intrastate commerce not involving the 
movement of hazardous materials.
    The Agency adds paragraph (d)(3) to create a separate paragraph 
that addresses State provisions applicable to intrastate commerce not 
involving hazardous materials to conform to the definition and 
organization of ``compatible'' in Sec.  350.105. In the new paragraph, 
FMCSA separates into paragraphs (d)(3)(i) and (d)(3)(ii) the standard 
for State provisions that are identical to or have the same effect as 
the FMCSRs and the standard for those that differ from the FMCSRs, 
respectively. The Agency redesignates the following subparagraphs in 
paragraph (d) accordingly.
    Paragraph (d)(4) provides the standard applicable to interstate and 
intrastate commerce involving the movement of hazardous materials.
    Finally, in paragraph (g)(3), the Agency changes the words ``State 
or person'' to ``petitioner'' for clarity.
Sec.  350.305 What specific variances from the FMCSRs are allowed for 
State laws and regulations applicable to intrastate commerce and are 
not subject to Federal jurisdiction?
    FMCSA revises the title of this section to improve readability and 
emphasize that variances are only available for State provisions 
applicable to intrastate commerce. Otherwise, FMCSA adopts Sec.  
350.305 as proposed with only minor editorial changes.
Sec.  350.307 How may a State obtain a new exemption for State laws or 
regulations for a specific industry involved in intrastate commerce?
    FMCSA revises the title of this section to improve readability. 
Otherwise, FMCSA adopts Sec.  350.307 as proposed with only minor 
editorial changes.
Sec.  350.309 What are the consequences if a State has provisions that 
are not compatible?
    In Sec.  350.309(a), FMCSA adds a cross reference to Sec.  350.105 
for the definition of ``compatible.''

D. Subpart D--High Priority Program

    Subpart D describes the High Priority Program.
Sec.  350.401 What is the High Priority Program and what entities are 
eligible for funding under the High Priority Program?
    FMCSA adds to the section title ``and what entities are eligible 
for funding under the High Priority Program'' to indicate the section 
also identifies the eligible entities. Otherwise, FMCSA adopts Sec.  
350.401 as proposed with only a minor editorial change.
Sec.  350.403 What are the High Priority Program objectives?
    In Sec.  350.403(e) and (f), FMCSA deletes the phrase ``safety data 
improvement projects'' to align with the authorizing statute. Section 
350.403(g) already includes ``safety data improvement projects;'' 
accordingly, inclusion of the phrase in Sec.  350.403(e) and (f) is 
duplicative and confusing for the reader.
    In Sec.  350.403(h), FMCSA adds the phrase ``by States'' to clarify 
that Innovative Technology Deployment funds only may be given to 
States, in accordance with the authorizing statute. In paragraph (i), 
FMCSA changes the conjunction ``and'' to ``or'' to clarify a High 
Priority Program project only needs to include one, not all, of the 
objectives.
Sec.  350.405 What conditions must an applicant meet to qualify for 
High Priority Program funds?
    FMCSA reorganizes Sec.  350.405 so the High Priority Program 
eligibility requirements for funds related to motor carrier safety 
activities for States are in paragraph (a)(1) and applicants other than 
States are in paragraph (a)(2). Conforming changes are made to the 
numbering of the paragraphs. In paragraph (b), FMCSA adds the 
eligibility requirements States must satisfy to qualify for High 
Priority Program funds for Innovative Technology Deployment activities 
set forth at 49 U.S.C. 31102(l)(3)(C). FMCSA believes it will be more 
convenient for applicants to have all the eligibility requirements for 
High Priority Program funds in one location and to know them prior to 
the availability of the NOFO.

[[Page 37794]]

Sec.  350.407 How and when does an eligible entity apply for High 
Priority Program funds?
    FMCSA adds a sentence to clarify when an entity must apply for High 
Priority Program funds.
Sec.  350.409 What response will an applicant receive under the High 
Priority Program?
    FMCSA adopts Sec.  350.409 as proposed.
Sec.  350.411 How long are High Priority Program funds available to a 
recipient?
    FMCSA revises the paragraph titles to correspond to Sec.  350.405. 
Otherwise, FMCSA adopts Sec.  350.411 as proposed with only minor 
editorial changes.
Sec.  350.413 What are the Federal and recipient shares of costs 
incurred under the High Priority Program?
    In Sec.  350.413(b), FMCSA removes the word ``policy'' and replaces 
it with the words ``in the NOFO'' to clarify where entities can find 
eligible costs.
Sec.  350.415 What types of activities and projects are eligible for 
reimbursement under the High Priority Program?
    FMCSA adopts Sec.  350.415 as proposed.
Sec.  350.417 What specific costs are eligible for reimbursement under 
the High Priority Program?
    FMCSA adopts Sec.  350.417 as proposed.

E. Miscellaneous

    FMCSA removes and reserves part 355 of title 49 of the CFR 
(Compatibility of State Laws and Regulations Affecting Interstate Motor 
Carrier Operations) as proposed. FMCSA also removes and reserves part 
388 (Cooperative Agreements with States) as proposed.

X. Regulatory Analyses

A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 
13563 (Improving Regulation and Regulatory Review), and DOT Regulations

    The Office of Information and Regulatory Affairs determined that 
this final rule is not a significant regulatory action under section 
3(f) of E.O. 12866, Regulatory Planning and Review (58 FR 51735, Oct. 
4, 1993), as supplemented by E.O. 13563, Improving Regulation and 
Regulatory Review (76 FR 3821, Jan. 21, 2011), and does not require an 
assessment of potential costs and benefits under section 6(a)(3) of 
E.O. 12866. Accordingly, the Office of Management and Budget (OMB) has 
not reviewed it under that Order. In addition, this rule is not 
significant within the meaning of DOT regulations (84 FR 71714, Dec. 
27, 2019).
    The purpose of the rule is to amend and reorganize 49 CFR part 350, 
including adding relevant sections that are currently located in part 
355. Certain regulations are no longer necessary or are redundant. 
Moreover, the FAST Act requires FMCSA to implement a multi-year CVSP 
with annual updates for States applying for MCSAP funds and to provide 
a new MCSAP allocation formula. The new MCSAP formula helps the Federal 
Government operate more efficiently by establishing a reallocation of 
grant funds based on changes in safety factors. The new formula 
reallocates FY 2021 grant funding, but does not change the total amount 
of funds distributed. States are the only affected entities of this 
rule.
    The new MCSAP allocation formula replaces the current formula that 
has been in use for more than a decade with little modification and 
makes several improvements over the current formula. The basis of the 
new formula is a careful statistical analysis of the relationship 
between numerous highway safety variables, crashes, and fatalities. 
While this analysis revealed that several of the existing formula 
factors (e.g., special fuel consumption and population) remain highly 
correlated with crashes, newer data are available to more closely link 
the allocation of funding to safety risk.
    The formula discontinues the use of Incentive Funds. Instead, the 
formula allocates funds primarily based on the calculation of the 
applicable highway and safety factors. Mitigation measures ensure that 
State funding levels do not fluctuate substantially from year to year. 
Specifically, subject to the availability of funding, a State would not 
have a decrease of more than 3 percent, or an increase of more than 5 
percent, compared to its share of the formula grant calculation in the 
previous year.\4\ This provides the State a degree of predictability to 
aid in budget planning, while still allowing for fair allocation of 
funds based on changes in safety factors.
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    \4\ In this respect, the States, the District of Columbia, and 
the Commonwealth of Puerto Rico are treated differently than the 
remaining Territories. The U.S. Census Bureau does not provide 
annual population estimates for Territories other than the 
Commonwealth of Puerto Rico. Thus, these percentage limitations 
governing funding levels do not apply to these Territories.
---------------------------------------------------------------------------

    The new MCSAP formula results in a reallocation of grant funding 
but will not change the total amount of funds distributed and will not 
impose or reduce any costs associated with the program.
    FMCSA clarifies that it is a State's obligation to cooperate in the 
enforcement of hazardous materials safety permits for interstate and 
intrastate carriers as required under subpart E of 49 CFR part 385. The 
rule requires States to verify possession of the permit when required 
while conducting vehicle inspections and investigations. State 
officials already receive training on subpart E of part 385; therefore, 
FMCSA estimates that no new costs or benefits result from this 
clarification.
    The rule requires States to use CVSPs in accordance with the FAST 
Act. The rule provides direction to States on how and when to submit 
CVSPs, which are on 3-year cycles. Under the current regulations, 
States must submit lengthy annual CVSP applications to receive MCSAP 
funding. This rule requires States to submit robust 3-year CVSP 
applications for the first year, with annual updates for the second and 
third years, resulting in a decrease in costs, or a cost savings, for 
States and FMCSA. Specifically, for the first year of the CVSP, States 
submit information regarding performance goals, past performance, and 
other documents traditionally provided in an annual CVSP. For the 
second and third years of the CVSP, States submit an annual update that 
includes a budget for the applicable fiscal year, changes to the CVSP, 
and other documents required on an annual basis. In response to 
comments from CVSA, these changes are implemented for FY 2021 and not 
FY 2020 grant funds, as proposed. This adjustment is to account for the 
timing of this final rule.
    The rule eliminates the exception to adopt Sec. Sec.  171.15 and 
171.16 in the HMRs by States participating in MCSAP. These provisions 
require reporting of certain hazardous materials incidents. This rule 
allows States to ensure compliance with these provisions during the 
course of investigations, but does not require States to conduct 
investigations. Additionally, eliminating the exception does not expand 
the incident reporting burden. State officials already receive 
investigation training, which includes training on enforcement of 
Sec. Sec.  171.15 and 171.16. Therefore, FMCSA estimates that no new 
costs or benefits result from this exception elimination.

B. E.O. 13771 (Reducing Regulation and Controlling Regulatory Costs)

    E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, 
does not apply to this action because it is a nonsignificant regulatory 
action, as defined in section 3(f) of E.O. 12866, and has zero costs; 
therefore, it is not

[[Page 37795]]

subject to the ``2 for 1'' and budgeting requirements.\5\
---------------------------------------------------------------------------

    \5\ Executive Office of the President. Executive Order 13771 of 
January 30, 2017. Reducing Regulation and Controlling Regulatory 
Costs. 82 FR 9339-9341. February 3, 2017.
---------------------------------------------------------------------------

C. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).\6\
---------------------------------------------------------------------------

    \6\ A ``major rule'' means any rule that the Administrator of 
the Office of Information and Regulatory Affairs at OMB finds has 
resulted in or is likely to result in (a) an annual effect on the 
economy of $100 million or more; (b) a major increase in costs or 
prices for consumers, individual industries, Federal agencies, State 
agencies, local government agencies, or geographic regions; or (c) 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic 
and export markets (5 U.S.C. 804(2)).
---------------------------------------------------------------------------

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. 601 et 
seq.), as amended by the Small Business Regulatory Enforcement Fairness 
Act of 1996 (Pub. L. 104-121, 110 Stat. 857 (Mar. 29, 1996), note 
following 5 U.S.C. 601), requires Federal agencies to consider the 
impact of their regulatory proposals on small entities, analyze 
effective alternatives that minimize small entity impacts, and make 
their analyses available for public comment. The term ``small 
entities'' means small businesses and not-for-profit organizations that 
are independently owned and operated and are not dominant in their 
fields, and governmental jurisdictions with populations under 50,000 (5 
U.S.C. 601(6)). Section 605 of the RFA allows an agency to certify a 
rule, in lieu of preparing an analysis, if the rulemaking is not 
expected to have a significant economic impact on a substantial number 
of small entities.
    This rule primarily affects States applying for MCSAP funds due to 
the new MCSAP allocation formula governing distribution of MCSAP funds 
and the requirement to submit CVSPs on a 3-year cycle. States are not 
small entities because they do not meet the definition of a small 
entity in section 601 of the RFA. Specifically, States are not small 
governmental jurisdictions under section 601(5) of the RFA, both 
because State government is not among the various levels of government 
listed in section 601(5), and because, even if this were the case, no 
State, including the District of Columbia and the 5 Territories, has a 
population of less than 50,000, which is the criterion to be a small 
governmental jurisdiction under section 601(5) of the RFA.
    Although States would not be small entities, there is a possibility 
that other entities that may be grant program applicants could be small 
entities. These other entities include local governments, Federally-
recognized Indian Tribes, other political jurisdictions, universities, 
non-profit organizations, and other persons who, although not eligible 
for MCSAP funds, which are designated for States, would be eligible for 
funding under the High Priority Program. However, the impact of the 
rule results from changes to MCSAP, which do not affect the High 
Priority Program applicants. As such, FMCSA has determined that these 
non-State entities would not experience economic impacts as a result of 
the rule.
    In summary, this rule only impacts States, including the District 
of Columbia and the 5 Territories, which are not small entities. The 
rule thus does not have a significant economic impact on the regulated 
entities, and does not significantly impact a substantial number of 
small entities. Accordingly, I certify that the action does not have a 
significant economic impact on a substantial number of small entities.

E. Assistance for Small Entities

    In accordance with section 213(a) of the Small Business Regulatory 
Enforcement Fairness Act of 1996, FMCSA wants to assist small entities 
in understanding this final rule so that they can better evaluate its 
effects on themselves and participate in the rulemaking initiative. If 
the final rule will affect your small business, organization, or 
governmental jurisdiction and you have questions concerning its 
provisions or options for compliance, please consult the FMCSA point of 
contact, Mr. Jack Kostelnik, listed in the FOR FURTHER INFORMATION 
CONTACT section of this final rule.
    Small businesses may send comments on the actions of Federal 
employees who enforce or otherwise determine compliance with Federal 
regulations to the Small Business Administration's Small Business and 
Agriculture Regulatory Enforcement Ombudsman and the Regional Small 
Business Regulatory Fairness Boards. The Ombudsman evaluates these 
actions annually and rates each agency's responsiveness to small 
business. If you wish to comment on actions by employees of FMCSA, call 
1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights 
of small entities to regulatory enforcement fairness and an explicit 
policy against retaliation for exercising these rights.

F. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or Tribal government, in 
the aggregate, or by the private sector of $165 million (which is the 
value equivalent of $100 million in 1995, adjusted for inflation to 
2018 levels) or more in any 1 year. Though this final rule will not 
result in such an expenditure, the Agency does discuss the effects of 
this rule elsewhere in this preamble.

G. Paperwork Reduction Act

    This rule would call for no new collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The Agency notes 
that MCSAP applications are not subject to OMB's standard application 
requirements pursuant to 2 CFR 1201.206. Entities apply for the 
Agency's other financial assistance programs using standardized forms 
found in grants.gov, which account for any information collection 
burden and are not impacted by this rule.

H. E.O. 13132 (Federalism)

    A rule has implications for federalism under section 1(a) of E.O. 
13132 if it has ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' FMCSA determined that this rule does not have substantial 
direct costs on or for States, nor would it limit the policymaking 
discretion of States. Nothing in this document preempts any State law 
or regulation. Therefore, this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Impact 
Statement.

I. Privacy

    Section 522 of title I of division H of the Consolidated 
Appropriations Act, 2005 (Pub. L. 108-447, 118 Stat. 2809, 3268 (Dec. 
8, 2004), note following 5 U.S.C. 552a), requires the Agency to conduct 
a privacy impact assessment of a regulation that will affect the 
privacy of individuals. The assessment considers impacts of the rule on 
the privacy of information in an identifiable form and related matters. 
The FMCSA Privacy Officer has evaluated the risks

[[Page 37796]]

and effects the rulemaking might have on collecting, storing, and 
sharing personally identifiable information and has evaluated 
protections and alternative information handling processes in 
developing the rule to mitigate potential privacy risks. FMCSA 
determined that this rule does not require the collection of individual 
personally identifiable information.
    Additionally, the Agency submitted a Privacy Threshold Assessment 
analyzing the rulemaking to the DOT, Office of the Secretary's Privacy 
Office. The DOT Privacy Office has determined that this rulemaking does 
not create privacy risk.
    The E-Government Act of 2002 (Pub. L. 107-347, 208, 116 Stat. 2899, 
2921 (Dec. 17, 2002)), requires Federal agencies to conduct a privacy 
impact assessment for new or substantially changed technology that 
collects, maintains, or disseminates information in an identifiable 
form. No new or substantially changed technology would collect, 
maintain, or disseminate information because of this rule.

J. E.O. 13175 (Indian Tribal Governments)

    This rule does not have Tribal implications under E.O. 13175, 
Consultation and Coordination with Indian Tribal Governments, because 
it does not have a substantial direct effect on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian Tribes.

K. National Environmental Policy Act of 1969

    FMCSA analyzed this rule for the purpose of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and 
determined this action is categorically excluded from further analysis 
and documentation in an environmental assessment or environmental 
impact statement under FMCSA Order 5610.1 (69 FR 9680, Mar. 1, 2004), 
Appendix 2, paragraphs 6.f. and 6.g. The Categorical Exclusions (CEs) 
in paragraphs 6.f. and 6.g. cover regulations implementing activities, 
whether performed by FMCSA or by States pursuant to MCSAP, and 
procedures to promote adoption and enforcement of State laws and 
regulations pertaining to CMV safety that are compatible with the 
FMCSRs and HMRs, and procedures to provide guidelines for a continuous 
regulatory review of State laws and regulations. These CEs cover the 
requirements in this rule and the rule does not have any effect on the 
quality of the environment.

List of Subjects

49 CFR 350

    Grant programs-transportation, Highway safety, Motor carriers, 
Motor vehicle safety, Reporting and recordkeeping requirements

49 CFR 355

    Highway safety, Intergovernmental relations, Motor carriers, Motor 
vehicle safety, Reporting and recordkeeping requirements

49 CFR 388

    Administrative practice and procedure, Highway safety, Motor 
carriers, Motor vehicle safety

    In consideration of the foregoing, FMCSA amends 49 CFR chapter III 
as follows:

0
1. Revise part 350 to read as follows:

PART 350--MOTOR CARRIER SAFETY ASSISTANCE PROGRAM (MCSAP) AND HIGH 
PRIORITY PROGRAM

Subpart A--General
Sec.
350.101 What is the purpose of this part?
350.103 When do the financial assistance program changes take 
effect?
350.105 What definitions are used in this part?
Subpart B--MCSAP Administration
350.201 What is MCSAP?
350.203 What are the national MCSAP elements?
350.205 What entities are eligible for funding under MCSAP?
350.207 What conditions must a State meet to qualify for MCSAP 
funds?
350.209 How and when does a State apply for MCSAP funds using a 
CVSP?
350.211 What must a State include for the first year of the CVSP?
350.213 What must a State include for the second and third years of 
the CVSP?
350.215 What response does a State receive to its CVSP?
350.217 How are MCSAP funds allocated?
350.219 How are MCSAP funds awarded under a continuing resolution or 
an extension of FMCSA's authorization?
350.221 How long are MCSAP funds available to a State?
350.223 What are the Federal and State shares of costs incurred 
under MCSAP?
350.225 What MOE must a State maintain to qualify for MCSAP funds?
350.227 What activities are eligible for reimbursement under MCSAP?
350.229 What specific costs are eligible for reimbursement under 
MCSAP?
350.231 What are the consequences for failure to meet MCSAP 
conditions?
Subpart C--MCSAP-Required Compatibility Review
350.301 What is the purpose of this subpart?
350.303 How does a State ensure compatibility?
350.305 What specific variances from the FMCSRs are allowed for 
State laws and regulations applicable to intrastate commerce and are 
not subject to Federal jurisdiction?
350.307 How may a State obtain a new exemption for State laws or 
regulations for a specific industry involved in intrastate commerce?
350.309 What are the consequences if a State has provisions that are 
not compatible?
Subpart D--High Priority Program
350.401 What is the High Priority Program and what entities are 
eligible for funding under the High Priority Program?
350.403 What are the High Priority Program objectives?
350.405 What conditions must an applicant meet to qualify for High 
Priority Program funds?
350.407 How and when does an eligible entity apply for High Priority 
Program funds?
350.409 What response will an applicant receive under the High 
Priority Program?
350.411 How long are High Priority Program funds available to a 
recipient?
350.413 What are the Federal and recipient shares of costs incurred 
under the High Priority Program?
350.415 What types of activities and projects are eligible for 
reimbursement under the High Priority Program?
350.417 What specific costs are eligible for reimbursement under the 
High Priority Program?

    Authority: 49 U.S.C. 504, 13902, 31101, 31102, 31104, 31106, 
31108, 31136, 31141, 31161, 31310, 31311, 31502; secs. 5106 and 
5107, Pub. L. 114-94, 129 Stat. 1312, 1530; and 49 CFR 1.87.

Subpart A--General


Sec.  350.101  What is the purpose of this part?

    The purpose of this part is to provide direction for entities 
seeking MCSAP or High Priority Program funding to improve motor 
carrier, CMV, and driver safety.


Sec.  350.103  When do the financial assistance program changes take 
effect?

    The changes to the FMCSA financial assistance programs under this 
part take effect for fiscal year 2021 (beginning October 1, 2020) 
financial assistance funds and beyond.


Sec.  350.105  What definitions are used in this part?

    Unless specifically defined in this section, terms used in this 
part are subject to the definitions in 49 CFR part 390. As used in this 
part:

[[Page 37797]]

    Administrative takedown funds means funds FMCSA deducts each fiscal 
year from the amounts made available for MCSAP and the High Priority 
Program for expenses incurred by FMCSA for training State and local 
government employees and for the administration of the programs.
    Administrator means the administrator of FMCSA.
    Border State means a State that shares a land border with Canada or 
Mexico.
    Commercial motor vehicle (CMV) means a motor vehicle that has any 
of the following characteristics:
    (1) A gross vehicle weight (GVW), gross vehicle weight rating 
(GVWR), gross combination weight (GCW), or gross combination weight 
rating (GCWR) of 4,537 kilograms (10,001 pounds) or more.
    (2) Regardless of weight, is designed or used to transport 16 or 
more passengers, including the driver.
    (3) Regardless of weight, is used in the transportation of 
hazardous materials and is required to be placarded pursuant to 49 CFR 
part 172, subpart F.
    Commercial vehicle safety plan (CVSP) means a State's CMV safety 
objectives, strategies, activities, and performance measures that cover 
a 3-year period, including the submission of the CVSP for the first 
year and annual updates thereto for the second and third years.
    Compatible or compatibility means State laws, regulations, 
standards, and orders on CMV safety that:
    (1) As applicable to interstate commerce not involving the movement 
of hazardous materials:
    (i) Are identical to or have the same effect as the FMCSRs; or
    (ii) If in addition to or more stringent than the FMCSRs, have a 
safety benefit, do not unreasonably frustrate the Federal goal of 
uniformity, and do not cause an unreasonable burden on interstate 
commerce when enforced;
    (2) As applicable to intrastate commerce not involving the movement 
of hazardous materials:
    (i) Are identical to or have the same effect as the FMCSRs; or
    (ii) Fall within the limited variances from the FMCSRs allowed 
under Sec.  350.305 or Sec.  350.307; and
    (3) As applicable to interstate and intrastate commerce involving 
the movement of hazardous materials, are identical to the HMRs.
    FMCSA means the Federal Motor Carrier Safety Administration of the 
United States Department of Transportation.
    FMCSRs means:
    (1) The Federal Motor Carrier Safety Regulations under parts 390, 
391, 392, 393, 395, 396, and 397 of this subchapter; and
    (2) Applicable standards and orders issued under these provisions.
    HMRs means:
    (1) The Federal Hazardous Materials Regulations under subparts F 
and G of part 107, and parts 171, 172, 173, 177, 178, and 180 of this 
title; and
    (2) Applicable standards and orders issued under these provisions.
    High Priority Program funds means total funds available for the 
High Priority Program, less the administrative takedown funds.
    Investigation means an examination of motor carrier operations and 
records, such as drivers' hours of service, maintenance and inspection, 
driver qualification, commercial driver's license requirements, 
financial responsibility, crashes, hazardous materials, and other 
safety and transportation records, to determine whether a motor carrier 
meets safety standards, including the safety fitness standard under 
Sec.  385.5 of this subchapter, or, for intrastate motor carrier 
operations, the applicable State standard.
    Lead state agency means the State CMV safety agency responsible for 
administering the CVSP throughout a State.
    Maintenance of effort (MOE) means the level of a State's financial 
expenditures, other than the required match, the Lead State Agency is 
required to expend each fiscal year in accordance with Sec.  350.225.
    Motor carrier means a for-hire motor carrier or private motor 
carrier. The term includes a motor carrier's agents, officers, and 
representatives, as well as employees responsible for hiring, 
supervising, training, assigning, or dispatching a driver or an 
employee concerned with the installation, inspection, and maintenance 
of motor vehicle equipment or accessories.
    Motor Carrier Safety Assistance Program (MCSAP) funds means total 
formula grant funds available for MCSAP, less the administrative 
takedown funds.
    New entrant safety audit means the safety audit of an interstate 
motor carrier that is required as a condition of MCSAP eligibility 
under Sec.  350.207(a)(26), and, at the State's discretion, an 
intrastate new entrant motor carrier under 49 U.S.C. 31144(g) that is 
conducted in accordance with subpart D of part 385 of this subchapter.
    North American Standard Inspection means the methodology used by 
State CMV safety inspectors to conduct safety inspections of CMVs. This 
consists of various levels of inspection of the vehicle or driver or 
both. The inspection criteria are developed by FMCSA in conjunction 
with the Commercial Vehicle Safety Alliance (CVSA), which is an 
association of States, Canadian Provinces, and Mexico whose members 
agree to adopt these standards for inspecting CMVs in their 
jurisdiction.
    State means a State of the United States, the District of Columbia, 
American Samoa, the Commonwealth of the Northern Mariana Islands, the 
Commonwealth of Puerto Rico, Guam, and the Virgin Islands, unless 
otherwise specified in this part.
    Traffic enforcement means the stopping of vehicles operating on 
highways for moving violations of State, Tribal, or local motor vehicle 
or traffic laws by State, Tribal, or local officials.

Subpart B--MCSAP Administration


Sec.  350.201  What is MCSAP?

    (a) General. MCSAP is a Federal formula grant program that provides 
financial assistance to States to reduce the number and severity of 
crashes, and resulting injuries and fatalities, involving CMVs and to 
promote the safe transportation of passengers and hazardous materials. 
The goal of MCSAP is to reduce CMV-involved crashes, fatalities, and 
injuries through consistent, uniform, and effective CMV safety programs 
that include driver or vehicle inspections, traffic enforcement, 
carrier investigations, new entrant safety audits, border enforcement, 
safety data improvements, and Performance and Registration Information 
Systems Management (PRISM).
    (b) MCSAP purpose. The purpose of MCSAP is to ensure FMCSA and 
States, local government agencies, other political jurisdictions, 
Federally-recognized Indian Tribes, and other organizations and persons 
work in partnership to establish programs to improve motor carrier, 
CMV, and driver safety to support a safe and efficient transportation 
system by--
    (1) Making targeted investments to promote safe CMV transportation, 
including transportation of passengers and hazardous materials;
    (2) Investing in activities likely to generate maximum reductions 
in the number and severity of CMV crashes and in fatalities resulting 
from CMV crashes;
    (3) Adopting and enforcing effective and compatible (as defined in 
Sec.  350.105 of this part) motor carrier, CMV, and driver safety laws, 
regulations, standards, and orders; and
    (4) Assessing and improving State-wide performance of motor 
carrier, CMV, and driver safety by setting

[[Page 37798]]

program goals and meeting performance standards, measurements, and 
benchmarks.
    (c) State participation. MCSAP sets conditions of participation for 
States and promotes the adoption and uniform enforcement of compatible 
laws, regulations, standards, and orders on CMV safety.


Sec.  350.203  What are the national MCSAP elements?

    The national MCSAP elements are:
    (a) Driver inspections;
    (b) Vehicle inspections;
    (c) Traffic enforcement;
    (d) Investigations;
    (e) New entrant safety audits;
    (f) CMV safety programs focusing on international commerce in 
border States;
    (g) Beginning October 1, 2020, full participation in PRISM or an 
acceptable alternative as determined by the Administrator;
    (h) Accurate, complete, timely, and corrected data;
    (i) Public education and awareness; and
    (j) Other elements that may be prescribed by the Administrator.


Sec.  350.205  What entities are eligible for funding under MCSAP?

    Only States are eligible to receive MCSAP grants directly from 
FMCSA.


Sec.  350.207  What conditions must a State meet to qualify for MCSAP 
funds?

    (a) General. To qualify for MCSAP funds, a State must:
    (1) Designate a Lead State Agency;
    (2) Assume responsibility for improving motor carrier safety by 
adopting and enforcing compatible (as defined in Sec.  350.105 of this 
part) laws, regulations, standards, and orders on CMV safety, except as 
may be determined by the Administrator to be inapplicable to a State 
enforcement program;
    (3) Ensure that the State will cooperate in the enforcement of 
financial responsibility requirements under part 387 of this 
subchapter;
    (4) Provide that the State will enforce the registration 
requirements under 49 U.S.C. 13902 and 31134 by prohibiting the 
operation of any vehicle discovered to be operated by a motor carrier 
without a registration issued under those sections or operated beyond 
the scope of the motor carrier's registration;
    (5) Provide a right of entry (or other method a State may use that 
is adequate to obtain necessary information) and inspection to carry 
out the CVSP;
    (6) Give satisfactory assurances in its CVSP that the Lead State 
Agency and any subrecipient of MCSAP funds have the legal authority, 
resources, and qualified personnel (including individuals certified in 
accordance with 49 CFR part 385, subpart C, to perform inspections, 
audits, and investigations) necessary to enforce compatible laws, 
regulations, standards, and orders on CMV safety;
    (7) Provide satisfactory assurances that the State will undertake 
efforts that will emphasize and improve enforcement of State and local 
traffic laws and regulations on CMV safety;
    (8) Give satisfactory assurances that the State will devote 
adequate resources to the administration of the CVSP throughout the 
State, including the enforcement of compatible laws, regulations, 
standards, and orders on CMV safety;
    (9) Provide that the MOE of the Lead State Agency will be 
maintained each fiscal year in accordance with Sec.  350.225;
    (10) Provide that all reports required in the CVSP be available to 
FMCSA upon request, meet the reporting requirements, and use the forms 
for recordkeeping, inspections, and investigations that FMCSA 
prescribes;
    (11) Implement performance-based activities, including deployment 
and maintenance of technology, to enhance the efficiency and 
effectiveness of CMV safety programs;
    (12) Establish and dedicate sufficient resources to a program to 
ensure that accurate, complete, and timely motor carrier safety data 
are collected and reported, and to ensure the State's participation in 
a national motor carrier safety data correction system prescribed by 
FMCSA;
    (13) Ensure that the Lead State Agency will coordinate the CVSP, 
data collection, and information systems with the State highway safety 
improvement program under 23 U.S.C. 148(c);
    (14) Ensure participation in information technology and data 
systems as required by FMCSA for jurisdictions receiving MCSAP funding;
    (15) Ensure that information is exchanged with other States in a 
timely manner;
    (16) Grant maximum reciprocity for inspections conducted under the 
North American Standard Inspection Program through the use of a 
nationally accepted system that allows ready identification of 
previously inspected CMVs;
    (17) Provide that the State will conduct comprehensive and highly 
visible traffic enforcement and CMV safety inspection programs in high-
risk locations and corridors;
    (18) Ensure that driver or vehicle inspections will be conducted at 
locations that are adequate to protect the safety of drivers and 
enforcement personnel;
    (19) Except in the case of an imminent or obvious safety hazard, 
ensure that an inspection of a vehicle transporting passengers for a 
motor carrier of passengers is conducted at a bus station, terminal, 
border crossing, maintenance facility, destination, or other location 
where a motor carrier may make a planned stop (excluding a weigh 
station);
    (20) Provide satisfactory assurances that the State will address 
activities in support of the national program elements listed in Sec.  
350.203, including activities:
    (i) Aimed at removing impaired CMV drivers from the highways 
through adequate enforcement of regulations on the use of alcohol and 
controlled substances and by ensuring ready roadside access to alcohol 
detection and measuring equipment;
    (ii) Aimed at providing training to MCSAP personnel to recognize 
drivers impaired by alcohol or controlled substances; and
    (iii) Related to criminal interdiction, including human 
trafficking, when conducted with an appropriate CMV inspection and 
appropriate strategies for carrying out those interdiction activities, 
including interdiction activities that affect the transportation of 
controlled substances (as defined in section 102 of the Comprehensive 
Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 802) and 
listed in 21 CFR part 1308) by any occupant of a CMV;
    (21) Ensure that detection of criminal activities and size and 
weight activities described in Sec.  350.227(b), if financed through 
MCSAP funds, will not diminish the effectiveness of the development and 
implementation of the programs to improve motor carrier, CMV, and 
driver safety;
    (22) Ensure consistent, effective, and reasonable sanctions;
    (23) Provide that the State will include in the training manuals 
for the licensing examinations to drive a CMV and non-CMV information 
on best practices for driving safely in the vicinity of CMVs and non-
CMVs;
    (24) Require all registrants of CMVs to demonstrate their knowledge 
of applicable FMCSRs, HMRs, or compatible State laws, regulations, 
standards, and orders on CMV safety;
    (25) Ensure that the State transmits to inspectors the notice of 
each Federal exemption granted under subpart C of part 381 of this 
subchapter and Sec. Sec.  390.23 and 390.25 of this subchapter that 
relieves a person or class of persons in whole or in part from 
compliance

[[Page 37799]]

with the FMCSRs or HMRs that has been provided to the State by FMCSA 
and identifies the person or class of persons granted the exemption and 
any terms and conditions that apply to the exemption;
    (26) Subject to paragraphs (b) and (c)(1) of this section, conduct 
new entrant safety audits of interstate and, at the State's discretion, 
intrastate new entrant motor carriers in accordance with subpart D of 
part 385 of this subchapter;
    (27) Subject to paragraph (c)(2) of this section, beginning October 
1, 2020, participate fully in PRISM by complying with the conditions 
for full participation, or receiving approval from the Administrator 
for an alternative approach for identifying and immobilizing a motor 
carrier with serious safety deficiencies in a manner that provides an 
equivalent level of safety;
    (28) Ensure that the State will cooperate in the enforcement of 
hazardous materials safety permits issued under subpart E of part 385 
of this subchapter by verifying possession of the permit when required 
while conducting vehicle inspections and investigations, as applicable; 
and
    (29) For Border States, conduct a border CMV safety program 
focusing on international commerce that includes enforcement and 
related projects, or forfeit all funds allocated for border-related 
activities.
    (b) New entrant safety audits--Use of third parties. If a State 
uses a third party to conduct new entrant safety audits under paragraph 
(a)(26) of this section, the State must verify the quality of the work 
and the State remains solely responsible for the management and 
oversight of the audits.
    (c) Territories. (1) The new entrant safety audit requirement under 
paragraph (a)(26) does not apply to American Samoa, the Commonwealth of 
the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, 
and the Virgin Islands.
    (2) The required PRISM participation date under paragraph (a)(27) 
of this section does not apply to American Samoa, the Commonwealth of 
the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, 
and the Virgin Islands.


Sec.  350.209  How and when does a State apply for MCSAP funds using a 
CVSP?

    (a) MCSAP application submission format. (1) The CVSP is a 3-year 
plan.
    (2) The first year of the CVSP varies by State, depending on when 
the State implemented the CVSP.
    (3) For the first year of the CVSP, the Lead State Agency must 
submit a CVSP projecting programs and projects covering 3 years and a 
budget for the first fiscal year for which the CVSP is submitted, as 
explained in Sec.  350.211.
    (4) For the second and third years of the CVSP, the Lead State 
Agency must submit an annual update and budget for that fiscal year and 
any other needed adjustments or changes to the CVSP, as explained in 
Sec.  350.213.
    (b) MCSAP application submission deadline. (1) The Lead State 
Agency must submit the first year of the CVSP, or the annual updates, 
to FMCSA by the date prescribed in the MCSAP application announcement 
for the fiscal year.
    (2) The Administrator may extend for a period not exceeding 30 days 
the deadline prescribed in the MCSAP application announcement for 
document submission for good cause.


Sec.  350.211  What must a State include for the first year of the 
CVSP?

    (a) General. (1) For the first year of the CVSP, the Lead State 
Agency must submit a CVSP that complies with the MCSAP application 
announcement and, at a minimum, provides a performance-based program 
with a general overview section that includes:
    (i) A statement of the Lead State Agency's goal or mission; and
    (ii) A program summary of the effectiveness of prior activities in 
reducing CMV crashes, injuries, and fatalities and in improving driver 
and motor carrier safety performance.
    (2) The program summary must identify and address safety or 
performance problems in the State.
    (3) The program summary must use 12-month data periods that are 
consistent from year to year. This may be a calendar year, fiscal year, 
or any 12-month period for which the State's data is current.
    (4) The program summary must show trends supported by safety and 
program performance data collected over several years.
    (b) National MCSAP elements. (1) For the first year of the CVSP, 
the Lead State Agency must include a brief narrative describing how the 
State CVSP addresses the national program elements listed in Sec.  
350.203.
    (2) The CVSP must address each national program element even if 
there are no planned activities in a program area.
    (c) Resource allocation. For the first year of the CVSP, the Lead 
State Agency must explain the rationale for the State's resource 
allocation decisions.
    (d) Specific activities. For the first year of the CVSP, the Lead 
State Agency must have a narrative section that includes a description 
of how the CVSP supports:
    (1) Activities aimed at removing impaired CMV drivers from the 
highways through adequate enforcement of restrictions on the use of 
alcohol and controlled substances and by ensuring ready roadside access 
to alcohol detection and measuring equipment;
    (2) Activities aimed at providing an appropriate level of training 
to MCSAP personnel to recognize drivers impaired by alcohol or 
controlled substances;
    (3) Criminal interdiction activities and appropriate strategies for 
carrying out those interdiction activities, including human 
trafficking, and interdiction activities affecting the transportation 
of controlled substances by any occupant of a CMV; and
    (4) Activities to enforce registration requirements and to 
cooperate in the enforcement of financial responsibility requirements 
under Sec.  392.9a and part 387 of this subchapter.
    (e) Performance objectives. For the first year of the CVSP, the 
Lead State Agency must include performance objectives, strategies, and 
activities stated in quantifiable terms, that are to be achieved 
through the CVSP.
    (f) Monitoring. For the first year of the CVSP, the Lead State 
Agency must include a description of the State's method for ongoing 
monitoring of the progress of the CVSP.
    (g) Budget. For the first year of the CVSP, the Lead State Agency 
must include a budget for that year that describes the expenditures for 
allocable costs, such as personnel and related costs, equipment 
purchases, printing, information systems costs, and other eligible 
costs consistent with Sec.  350.229.
    (h) List of MCSAP contacts. For the first year of the CVSP, the 
Lead State Agency must include a list of MCSAP contacts.
    (i) Certification. (1) For the first year of the CVSP, the Lead 
State Agency must certify that it has:
    (i) Met all the MCSAP conditions in Sec.  350.207; and
    (ii) Completed the annual review required by Sec.  350.303 and 
determined that State laws, regulations, standards, and orders on CMV 
safety are compatible (as defined in Sec.  350.105 of this part).
    (2) If a State law, regulation, standard, or order on CMV safety is 
no longer compatible, the certifying official must explain the State's 
plan to address the discrepancy.
    (3) A certification under this paragraph must reflect that the 
certifying official has authority to make the certification on behalf 
of the State.

[[Page 37800]]

    (j) New or amended laws. For the first year of the CVSP, the Lead 
State Agency must submit to FMCSA a copy of any new or amended law, 
regulation, standard, or order on CMV safety that was enacted by the 
State since the prior year's submission.
    (k) Further submissions. For the first year of the CVSP, the Lead 
State Agency must also submit other information required, as described 
in the MCSAP application announcement for that fiscal year.


Sec.  350.213  What must a State include for the second and third years 
of the CVSP?

    (a) General. For the second and third years of the CVSP, a Lead 
State Agency must submit an annual update that complies with the MCSAP 
application announcement and, at a minimum, must include program goals, 
certifications, and other information revised since the prior year's 
submission, and the items listed in paragraphs (b) to (g) of this 
section.
    (b) Budget. For the second and third years of the CVSP, the Lead 
State Agency must include a budget that supports the applicable fiscal 
year of the CVSP and describes the expenditures for allocable costs, 
such as personnel and related costs, equipment purchases, printing, 
information systems costs, and other eligible costs consistent with 
Sec.  350.229.
    (c) Resource allocation. For the second and third years of the 
CVSP, the Lead State Agency must explain the rationale for the State's 
resource allocation decisions.
    (d) List of MCSAP contacts. For the second and third years of the 
CVSP, the Lead State Agency must include a list of MCSAP contacts.
    (e) Certification. (1) For the second and third years of the CVSP, 
the Lead State Agency must certify that it has:
    (i) Met all the MCSAP conditions in Sec.  350.207; and
    (ii) Completed the annual review required by Sec.  350.303 and 
determined that State laws, regulations, standards, and orders on CMV 
safety are compatible (as defined in Sec.  350.105 of this part).
    (2) If a State law, regulation, standard, or order on CMV safety is 
no longer compatible, the certifying official must explain the State's 
plan to address the discrepancy.
    (3) A certification under this paragraph must reflect that the 
certifying official has authority to make the certification on behalf 
of the State.
    (f) New or amended laws. For the second and third years of the 
CVSP, the Lead State Agency must submit to FMCSA a copy of any new or 
amended law, regulation, standard, or order on CMV safety that the 
State enacted since the prior year's submission.
    (g) Further submissions. For the second and third years of the 
CVSP, the Lead State Agency must submit other information required, as 
described in the MCSAP application announcement for that fiscal year.


Sec.  350.215  What response does a State receive to its CVSP?

    (a) First year of the CVSP. (1) FMCSA will notify the Lead State 
Agency within 30 days after FMCSA begins its review of the State's 
first year of the CVSP, including the budget, whether FMCSA:
    (i) Approves the CVSP; or
    (ii) Withholds approval because the CVSP:
    (A) Does not meet the requirements of this part; or
    (B) Is not adequate to ensure effective enforcement of compatible 
(as defined in Sec.  350.105 of this part) laws, regulations, 
standards, and orders on CMV safety.
    (2) If FMCSA withholds approval of the CVSP, FMCSA will give the 
Lead State Agency a written explanation of the reasons for withholding 
approval and allow the Lead State Agency to modify and resubmit the 
CVSP for approval.
    (3) The Lead State Agency will have 30 days from the date of the 
notice under paragraph (a)(2) of this section to modify and resubmit 
the CVSP.
    (4) Failure to resubmit the modified CVSP may delay funding or 
jeopardize MCSAP eligibility.
    (5) Final disapproval of a resubmitted CVSP will result in 
disqualification for MCSAP funding for that fiscal year.
    (b) Annual update for the second or third year of the CVSP. (1) 
FMCSA will notify the Lead State Agency within 30 days after FMCSA 
begins its review of the State's annual update, including the budget, 
whether FMCSA:
    (i) Approves the annual update; or
    (ii) Withholds approval because the annual update:
    (A) Does not meet the requirements of this part; or
    (B) Is not adequate to ensure effective enforcement of compatible 
laws, regulations, standards, and orders on CMV safety.
    (2) If FMCSA withholds approval of the annual update, FMCSA will 
give the Lead State Agency a written explanation of the reasons for 
withholding approval and allow the Lead State Agency to modify and 
resubmit the annual update for approval.
    (3) The Lead State Agency will have 30 days from the date of the 
notice under paragraph (b)(2) of this section to modify and resubmit 
the annual update.
    (4) Failure to resubmit the modified annual update may delay 
funding or jeopardize MCSAP eligibility.
    (5) Final disapproval of a resubmitted annual update will result in 
disqualification for MCSAP funding for that fiscal year.
    (c) Judicial review. Any State aggrieved by an adverse decision 
under this section may seek judicial review under 5 U.S.C. chapter 7.


Sec.  350.217  How are MCSAP funds allocated?

    (a) General. Subject to the availability of funding, FMCSA must 
allocate MCSAP funds to grantees with approved CVSPs in accordance with 
this section.
    (b) Territories--excluding the Commonwealth of Puerto Rico. (1) Not 
more than 0.49 percent of the MCSAP funds may be allocated in 
accordance with this paragraph among the Territories of American Samoa, 
the Commonwealth of the Northern Mariana Islands, Guam, and the Virgin 
Islands.
    (2) Half of the MCSAP funds available under paragraph (b)(1) of 
this section will be divided equally among the Territories.
    (3) The remaining MCSAP funds available under paragraph (b)(1) of 
this section will be allocated among the Territories in a manner 
proportional to the Territories' populations, as reflected in the 
decennial census issued by the U.S. Census Bureau.
    (4) The amounts calculated under paragraphs (b)(2) and (b)(3) of 
this section will be totaled for each Territory.
    (5) The amounts calculated under paragraph (b)(4) of this section 
will be adjusted proportionally, based on population, to ensure that 
each Territory receives at least $350,000.
    (c) Border States. (1) Not more than 11 percent of the MCSAP funds 
may be allocated in accordance with this paragraph among Border States 
that maintain a border enforcement program.
    (2) The shares for each border State will be calculated based on 
the number of CMV crossings at each United States port of entry, as 
determined by the Bureau of Transportation Statistics, with each border 
State receiving:
    (i) 1 share per 25,000 annual CMV crossings at each United States 
port of entry on the Mexican border, with a minimum of 8 shares for 
each port of entry; or
    (ii) 1 share per 200,000 annual CMV crossings at each United States 
port of entry on the Canadian border, with a minimum of 0.25 share for 
each port of entry with more than 1,000 annual CMV crossings.

[[Page 37801]]

    (3) The shares of all Border States calculated under paragraph 
(c)(2) of this section will be totaled.
    (4) Each individual border State's shares calculated under 
paragraph (c)(2) of this section will be divided by the total shares 
calculated in paragraph (c)(3) of this section.
    (5) The percentages calculated in paragraph (c)(4) of this section 
will be adjusted proportionally to ensure that each Border State 
receives at least 0.075 percent but no more than 55 percent of the 
total border allocation available under paragraph (c)(1) of this 
section.
    (6) Each Border State's percentage calculated in paragraph (c)(5) 
of this section will be multiplied by the total border allocation 
available under this paragraph to determine the dollar amount of the 
border State's allocation.
    (7) To maintain eligibility for an allocation under this paragraph, 
a Border State must maintain a border enforcement program, but may 
expend more or less than the amounts allocated under this paragraph for 
border activities. Failure to maintain a border enforcement program 
will result in forfeiture of all funds allocated under this paragraph, 
but will not affect the Border State's allocation under paragraph (d) 
of this section.
    (8) Allocations made under this paragraph are in addition to 
allocations made under paragraph (d) of this section.
    (d) States--including the Commonwealth of Puerto Rico. (1)(i) At 
least 88.51 percent of the MCSAP funds must be allocated in accordance 
with this paragraph (d)(1)(i) among the eligible States, including the 
Commonwealth of Puerto Rico, but excluding American Samoa, the 
Commonwealth of the Northern Mariana Islands, Guam, and the Virgin 
Islands.
    (ii) The amounts made available under paragraphs (b) and (c) of 
this section that are not allocated under those paragraphs must be 
added to the total amount to be allocated in accordance with this 
paragraph.
    (iii) In the case of reallocation of funds under paragraph (c) of 
this section by a border State that no longer maintains a border 
enforcement program, no portion of the reallocated funds will be 
allocated to that border State.
    (2) The amount available under paragraph (d)(1) of this section 
will be calculated based on each State's percentage of the national 
total for each of the following equally-weighted factors:
    (i) National Highway System Road Length Miles, as reported by the 
Federal Highway Administration (FHWA);
    (ii) All Vehicle Miles Traveled, as reported by the FHWA;
    (iii) Population (annual census estimates), as issued by the U.S. 
Census Bureau;
    (iv) Special Fuel Consumption, as reported by the FHWA; and
    (v) Carrier Registrations, as determined by FMCSA, based on the 
physical State of the carrier, and calculated as the sum of interstate 
carriers and intrastate hazardous materials carriers.
    (3) Each State's percentages calculated in paragraph (d)(2) of this 
section will be averaged.
    (4) The percentage calculated in paragraph (d)(3) of this section 
will be adjusted proportionally to ensure that each State receives at 
least 0.44 percent but no more than 4.944 percent of the MCSAP funds 
available under paragraph (d)(1) of this section.
    (5) Each State's percentage will be multiplied by the total MCSAP 
funds available under this paragraph to determine the dollar amount of 
the State's allocation.
    (e) Hold-harmless provision and funding cap. (1) The dollar amounts 
calculated under paragraphs (c)(6) and (d)(5) of this section will be 
totaled for each State and then divided by the total MCSAP funds 
available for allocation under paragraphs (c) and (d) of this section 
to determine a State's percentage of the total MCSAP funds.
    (2) Each State's percentage of total MCSAP funding in the fiscal 
year immediately prior to the year for which funding is being allocated 
will be determined by dividing the State's dollar allocation by the 
total MCSAP funding in that prior year, excluding funds allocated to 
the Territories of American Samoa, the Commonwealth of the Northern 
Mariana Islands, Guam, and the Virgin Islands.
    (3) Proportional adjustments will be made to ensure that each 
State's percentage of MCSAP funds as calculated under paragraph (e)(1) 
of this section will be no less than 97 percent or more than 105 
percent of the State's percentage of MCSAP funds allocated for the 
prior fiscal year as calculated under paragraph (e)(2) of this section.
    (f) Withholding. (1) Allocations made under this section are 
subject to withholdings under Sec.  350.231(d).
    (2) Minimum or maximum allocations described in paragraphs (b), 
(c), and (d) of this section are to be applied prior to any reduction 
under Sec.  350.231(d).
    (3) State MCSAP funds affected by Sec.  350.231(d) will be 
allocated to the unaffected States in accordance with paragraph (d) of 
this section.
    (4) Paragraph (e) of this section does not apply after any 
reduction under Sec.  350.231(d).


Sec.  350.219  How are MCSAP funds awarded under a continuing 
resolution or an extension of FMCSA's authorization?

    In the event of a continuing resolution or an extension of FMCSA's 
authorization, subject to the availability of funding, FMCSA may first 
issue grants to States that have the lowest percent of undelivered 
obligations of the previous Federal fiscal year's funding, or as 
otherwise determined by the Administrator.


Sec.  350.221  How long are MCSAP funds available to a State?

    MCSAP funds obligated to a State will remain available for the 
Federal fiscal year that the funds are obligated and the next full 
Federal fiscal year.


Sec.  350.223  What are the Federal and State shares of costs incurred 
under MCSAP?

    (a) Federal share. FMCSA will reimburse at least 85 percent of the 
eligible costs incurred under MCSAP.
    (b) Match. (1) In-kind contributions are acceptable in meeting a 
State's matching share under MCSAP if they represent eligible costs, as 
established by 2 CFR parts 200 and 1201 and the MCSAP application 
announcement.
    (2) States may use amounts generated under the Unified Carrier 
Registration Agreement as part of the State's match required for MCSAP, 
provided the amounts are not applied to the MOE required under Sec.  
350.225 and are spent on eligible costs, as established by 2 CFR parts 
200 and 1201 and the MCSAP application announcement.
    (c) Waiver. (1) The Administrator waives the requirement for the 
matching share under MCSAP for American Samoa, the Commonwealth of the 
Northern Mariana Islands, Guam, and the Virgin Islands.
    (2) The Administrator reserves the right to reduce or waive the 
matching share under MCSAP for other States in any fiscal year:
    (i) As announced in the MCSAP application announcement; or
    (ii) As determined by the Administrator on a case-by-case basis.


Sec.  350.225  What MOE must a State maintain to qualify for MCSAP 
funds?

    (a) General. Subject to paragraph (e) of this section, a State must 
maintain an MOE each fiscal year for CMV safety programs eligible for 
funding under this part at a level at least equal to:
    (1) The average level of that expenditure for the base period of 
fiscal years 2004 and 2005; or
    (2) The level of expenditure in fiscal year 2021, as adjusted under 
section

[[Page 37802]]

5107 of the Fixing America's Surface Transportation (FAST) Act (Pub. L. 
114-94, 129 Stat. 1312, 1532-34 (2015)).
    (b) Calculation. In determining a State's MOE, FMCSA:
    (1) May allow the State to exclude State expenditures for 
Federally-sponsored demonstration and pilot CMV safety programs and 
strike forces;
    (2) May allow the State to exclude expenditures for activities 
related to border enforcement and new entrant safety audits;
    (3) May allow the State to use amounts generated under the Unified 
Carrier Registration Agreement, provided the amounts are not applied to 
the match required under Sec.  350.223;
    (4) Requires the State to exclude Federal funds; and
    (5) Requires the State to exclude State matching funds required 
under Sec.  350.223.
    (c) Costs. (1) In calculating the MOE under paragraph (b) of this 
section, a State must include all eligible costs associated with 
activities performed during the base period by the Lead State Agency 
that receives funds under this part.
    (2) In its annual MOE, a State must include only those activities 
that meet the current requirements for funding eligibility under MCSAP.
    (d) Waivers and modifications. (1) If a State requests, FMCSA may 
waive or modify the State's obligation to meet its MOE for a fiscal 
year if FMCSA determines that the waiver or modification is reasonable, 
based on circumstances described by the State.
    (2) Requests to waive or modify the State's obligation to meet its 
MOE must be submitted to FMCSA in writing.
    (3) FMCSA will review the request and provide a response as soon as 
practicable, but no later than 120 days following receipt of the 
request.
    (e) Permanent adjustment. After Federal fiscal year 2021, at the 
request of a State, FMCSA may make a permanent adjustment to reduce the 
State's MOE only if a State has new information unavailable to it 
during Federal fiscal year 2021.


Sec.  350.227  What activities are eligible for reimbursement under 
MCSAP?

    (a) General. The primary activities eligible for reimbursement 
under MCSAP are:
    (1) Activities that support the national program elements listed in 
Sec.  350.203; and
    (2) Sanitary food transportation inspections performed under 49 
U.S.C. 5701.
    (b) Additional activities. If part of the approved CVSP and 
accompanied by an appropriate North American Standard Inspection and 
inspection report, additional activities eligible for reimbursement 
are:
    (1) Enforcement of CMV size and weight limitations at locations, 
other than fixed-weight facilities, where the weight of a CMV can 
significantly affect the safe operation of the vehicle, such as near 
steep grades or mountainous terrains, or at ports where intermodal 
shipping containers enter and leave the United States; and
    (2) Detection of, and enforcement activities taken as a result of, 
criminal activity involving a CMV or any occupant of the vehicle, 
including the trafficking of human beings.
    (c) Traffic enforcement activities. (1) Documented activities to 
enforce State traffic laws and regulations designed to promote the safe 
operation of CMVs are eligible for reimbursement under MCSAP.
    (2) Documented activities to enforce State traffic laws and 
regulations relating to non-CMVs are eligible for reimbursement under 
MCSAP if:
    (i) The documented activities are necessary to promote the safe 
operation of CMVs;
    (ii) The number of motor carrier safety activities, including 
safety inspections, is maintained at a level at least equal to the 
average level of such activities conducted in the State in fiscal years 
2004 and 2005; and
    (iii) The State does not use more than 10 percent of its MCSAP 
funds for enforcement activities relating to non-CMVs, unless the 
Administrator determines that a higher percentage will result in 
significant increases in CMV safety.


Sec.  350.229  What specific costs are eligible for reimbursement under 
MCSAP?

    (a) General. FMCSA must establish criteria for activities eligible 
for reimbursement and make those criteria available to the States in 
the MCSAP application announcement before the MCSAP application period.
    (b) Costs eligible for reimbursement. All costs relating to 
activities eligible for reimbursement must be necessary, reasonable, 
allocable, and allowable under this subpart and 2 CFR parts 200 and 
1201. The eligibility of specific costs for reimbursement is addressed 
in the MCSAP application announcement and is subject to review and 
approval by FMCSA.
    (c) Ineligible costs. MCSAP funds may not be used for the:
    (1) Acquisition of real property or buildings; or
    (2) Development, implementation, or maintenance of a State registry 
of medical examiners.


Sec.  350.231  What are the consequences for failure to meet MCSAP 
conditions?

    (a) General. (1) If a State is not performing according to an 
approved CVSP or not adequately meeting the conditions set forth in 
Sec.  350.207, the Administrator may issue a written notice of proposed 
determination of nonconformity to the chief executive of the State or 
the official designated in the CVSP.
    (2) The notice will set forth the reasons for the proposed 
determination.
    (b) Response. The State has 30 days from the date of the notice to 
reply. The reply must address the discrepancy cited in the notice and 
must provide documentation as requested.
    (c) Final Agency decision. (1) After considering the State's reply, 
the Administrator makes a final decision.
    (2) In the event the State fails to timely reply to a notice of 
proposed determination of nonconformity, the notice becomes the 
Administrator's final determination of nonconformity.
    (d) Consequences. Any adverse decision will result in FMCSA:
    (1) Withdrawing approval of the CVSP and withholding all MCSAP 
funds to the State; or
    (2) Finding the State in noncompliance in lieu of withdrawing 
approval of the CVSP and withholding:
    (i) Up to 5 percent of MCSAP funds during the fiscal year that 
FMCSA notifies the State of its noncompliance;
    (ii) Up to 10 percent of MCSAP funds for the first full fiscal year 
of noncompliance;
    (iii) Up to 25 percent of MCSAP funds for the second full fiscal 
year of noncompliance; and
    (iv) Up to 50 percent of MCSAP funds for the third and any 
subsequent full fiscal year of noncompliance.
    (e) Judicial review. Any State aggrieved by an adverse decision 
under this section may seek judicial review under 5 U.S.C. chapter 7.

Subpart C--MCSAP-Required Compatibility Review


Sec.  350.301  What is the purpose of this subpart?

    The purpose of this subpart is to assist States receiving MCSAP 
funds to address compatibility (as defined in Sec.  350.105), including 
the availability of variances or exemptions allowed under Sec.  350.305 
or Sec.  350.307, to:
    (a) Promote adoption and enforcement of compatible laws, 
regulations, standards, and orders on CMV safety;
    (b) Provide for a continuous review of laws, regulations, 
standards, and orders on CMV safety;
    (c) Establish deadlines for States to achieve compatibility; and

[[Page 37803]]

    (d) Provide States with a process for requesting variances and 
exemptions for intrastate commerce.


Sec.  350.303  How does a State ensure compatibility?

    (a) General. The Lead State Agency is responsible for reviewing and 
analyzing State laws, regulations, standards, and orders on CMV safety 
to ensure compatibility (as defined in Sec.  350.105 of this part).
    (b) Compatibility deadline. As soon as practicable, but no later 
than 3 years after the effective date of any new addition or amendment 
to the FMCSRs or HMRs, the State must amend its laws, regulations, 
standards, and orders to ensure compatibility.
    (c) State adoption of a law, regulation, standard, or order on CMV 
safety. A State must submit to FMCSA a copy of any new or amended State 
law, regulation, standard, or order on CMV safety immediately after its 
enactment or issuance and with the State's next annual compatibility 
review.
    (d) Annual State compatibility review. (1) A State must conduct a 
review of its laws, regulations, standards, and orders on CMV safety, 
including those of its political subdivisions, for compatibility and 
report in the first year of the CVSP or annual update as part of its 
application for funding under Sec.  350.209 each fiscal year. In 
conducting this compatibility review, the State must determine which of 
its laws, regulations, standards, and orders on CMV safety are 
identical to or have the same effect as, are in addition to or more 
stringent than, or are less stringent than the FMCSRs or are identical 
to the HMRs.
    (2) As applicable to interstate commerce not involving the movement 
of hazardous materials:
    (i) If a State satisfactorily demonstrates a law, regulation, 
standard, or order on CMV safety is identical to or has the same effect 
as the FMCSRs, the State provision is compatible and enforceable.
    (ii) If a State satisfactorily demonstrates a law, regulation, 
standard, or order on CMV safety that is in addition to or more 
stringent than the FMCSRs has a safety benefit, does not unreasonably 
frustrate the Federal goal of uniformity, and does not cause an 
unreasonable burden on interstate commerce when enforced, the State 
provision is compatible and enforceable.
    (iii) If a State law, regulation, standard, or order on CMV safety 
is less stringent than the FMCSRs, the State provision is not 
compatible and not enforceable.
    (3) As applicable to intrastate commerce not involving the movement 
of hazardous materials:
    (i) If a State satisfactorily demonstrates a law, regulation, 
standard, or order on CMV safety is identical to or has the same effect 
as the FMCSRs, the State provision is compatible and enforceable.
    (ii) If a State satisfactorily demonstrates a law, regulation, 
standard, or order on CMV safety that is in addition to, more stringent 
than, or less stringent than the FMCSRs falls within a limited variance 
from the FMCSRs allowed under Sec.  350.305 or Sec.  350.307, the State 
provision is compatible and enforceable.
    (4) As applicable to interstate and intrastate commerce involving 
the movement of hazardous materials, if a State satisfactorily 
demonstrates a law, regulation, standard, or order on CMV safety is 
identical to the HMRs, the State provision is compatible and 
enforceable.
    (5) The State's laws, regulations, standards, and orders on CMV 
safety reviewed for the commercial driver's license compliance report 
are excluded from the compatibility review.
    (6) Definitions of words or terms in a State's laws, regulations, 
standards, and orders on CMV safety must be compatible with those in 
the FMCSRs and HMRs.
    (e) Reporting to FMCSA. (1) The reporting required by paragraph (d) 
of this section, to be submitted with the first year of the CVSP or 
annual update, must include:
    (i) A copy of any State law, regulation, standard, or order on CMV 
safety that was adopted or amended since the State's last report; and
    (ii) A certification that states the annual review was performed 
and State laws, regulations, standards, and orders on CMV safety remain 
compatible, and that provides the name of the individual responsible 
for the annual review.
    (2) If State laws, regulations, standards, and orders on CMV safety 
are no longer compatible, the certifying official must explain the 
State's plan to correct the discrepancy.
    (f) FMCSA response. Not later than 10 days after FMCSA determines 
that a State law, regulation, standard, or order on CMV safety is not 
compatible and may not be enforced, FMCSA must give written notice of 
the decision to the State.
    (g) Waiver of determination. (1) A State or any person may petition 
the Administrator for a waiver of a decision by the Administrator that 
a State law, regulation, standard, or order on CMV safety is not 
compatible and may not be enforced.
    (2) Before deciding whether to grant or deny a waiver under this 
paragraph, the Administrator shall give the petitioner an opportunity 
for a hearing on the record.
    (3) If the petitioner demonstrates to the satisfaction of the 
Administrator that the waiver is consistent with the public interest 
and the safe operation of CMVs, the Administrator shall grant the 
waiver as expeditiously as practicable.


Sec.  350.305  What specific variances from the FMCSRs are allowed for 
State laws and regulations applicable to intrastate commerce and are 
not subject to Federal jurisdiction?

    (a) General. (1) Except as otherwise provided in this section, a 
State may exempt a CMV from all or part of its laws or regulations 
applicable to intrastate commerce, if the gross vehicle weight rating, 
gross combination weight rating, gross vehicle weight, or gross 
combination weight does not equal or exceed 11,801 kilograms (26,001 
pounds).
    (2) A State may not exempt a CMV from laws or regulations under 
paragraph (a)(1) of this section if the vehicle:
    (i) Transports hazardous materials requiring a placard; or
    (ii) Is designed or used to transport 16 or more people, including 
the driver.
    (b) Non-permissible exemption--Type of business operation. (1) 
Subject to paragraph (b)(2) of this section and Sec.  350.307, State 
laws and regulations applicable to intrastate commerce may not grant 
exemptions based on the type of transportation being performed (e.g., 
for-hire carrier, private carrier).
    (2) A State may retain those exemptions from its motor carrier 
safety laws and regulations that were in effect before April 1988, are 
still in effect, and apply to specific industries operating in 
intrastate commerce, provided the scope of the original exemption has 
not been amended.
    (c) Non-permissible exemption--Distance. (1) Subject to paragraph 
(c)(2) of this section, State laws and regulations applicable to 
intrastate commerce must not include exemptions based on the distance a 
motor carrier or driver operates from the work reporting location.
    (2) Paragraph (c)(1) of this section does not apply to distance 
exemptions contained in the FMCSRs.
    (d) Hours of service. State hours-of-service limitations applied to 
intrastate transportation may vary to the extent that they allow:
    (1) A 12-hour driving limit, provided that a driver of a CMV is not 
permitted to drive after having been on duty more than 16 hours;

[[Page 37804]]

    (2) Driving prohibitions for drivers who have been on duty 70 hours 
in 7 consecutive days or 80 hours in 8 consecutive days; or
    (3) Extending the 100-air mile radius under Sec.  395.1(e)(1)(i) of 
this subchapter to a 150-air mile radius.
    (e) Age of CMV driver. All intrastate CMV drivers must be at least 
18 years of age.
    (f) Driver physical conditions. (1) Intrastate drivers who do not 
meet the physical qualification standards in Sec.  391.41 of this 
subchapter may continue to be qualified to operate a CMV in intrastate 
commerce if:
    (i) The driver was qualified under existing State law or regulation 
at the time the State adopted physical qualification standards 
consistent with the Federal standards in Sec.  391.41 of this 
subchapter;
    (ii) The otherwise non-qualifying medical or physical condition has 
not substantially worsened; and
    (iii) No other non-qualifying medical or physical condition has 
developed.
    (2) The State may adopt or continue programs granting variances to 
intrastate drivers with medical or physical conditions that would 
otherwise be non-qualifying under the State's equivalent of Sec.  
391.41 of this subchapter if the variances are based on sound medical 
judgment combined with appropriate performance standards ensuring no 
adverse effect on safety.
    (3) A State that has physical qualification standards or variances 
continued in effect or adopted by the State under this paragraph for 
drivers operating CMVs in intrastate commerce has the option not to 
adopt laws and regulations that establish a separate registry of 
medical examiners trained and qualified to apply such physical 
qualification standards or variances.
    (g) Additional variances. A State may apply to the Administrator 
for a variance from the FMCSRs not otherwise covered by this section 
for intrastate commerce. The variance will be granted only if the State 
satisfactorily demonstrates that the State law, regulation, standard, 
or order on CMV safety:
    (1) Achieves substantially the same purpose as the similar Federal 
regulation;
    (2) Does not apply to interstate commerce; and
    (3) Is not likely to have an adverse impact on safety.


Sec.  350.307  How may a State obtain a new exemption for State laws or 
regulations for a specific industry involved in intrastate commerce?

    FMCSA will only consider a State's request to exempt a specific 
industry from all or part of a State's laws or regulations applicable 
to intrastate commerce if the State submits adequate documentation 
containing information allowing FMCSA to evaluate:
    (a) The type and scope of the industry exemption request, including 
the percentage of the industry it affects, number of vehicles, mileage 
traveled, and number of companies it involves;
    (b) The type and scope of the requirement to which the exemption 
would apply;
    (c) The safety performance of that specific industry (e.g., crash 
frequency, rates, and comparative figures);
    (d) Inspection information (e.g., number of violations per 
inspection, and driver and vehicle out-of-service information);
    (e) Other CMV safety regulations enforced by other State agencies 
not participating in MCSAP;
    (f) The commodity the industry transports (e.g., livestock or 
grain);
    (g) Similar exemptions granted and the circumstances under which 
they were granted;
    (h) The justification for the exemption; and
    (i) Any identifiable effects on safety.


Sec.  350.309  What are the consequences if a State has provisions that 
are not compatible?

    (a) General. To remain eligible for MCSAP funding, a State may not 
have in effect or enforce any State law, regulation, standard, or order 
on CMV safety that the Administrator finds is not compatible (as 
defined in Sec.  350.105).
    (b) Process. FMCSA may initiate a proceeding to withdraw the 
current CVSP approval or withhold MCSAP funds in accordance with Sec.  
350.231 if:
    (1) A State enacts a law, regulation, standard, or order on CMV 
safety that is not compatible;
    (2) A State fails to adopt a new or amended FMCSR or HMR within 3 
years of its effective date; or
    (3) FMCSA finds, based on its own initiative or on a petition of a 
State or any person, that a State law, regulation, standard, order, or 
enforcement practice on CMV safety, in either interstate or intrastate 
commerce, is not compatible.
    (c) Hazardous materials. Any decision regarding the compatibility 
of a State law, regulation, standard, or order on CMV safety with the 
HMRs that requires an interpretation will be referred to the Pipeline 
and Hazardous Materials Safety Administration of the United States 
Department of Transportation before proceeding under Sec.  350.231.

Subpart D--High Priority Program


Sec.  350.401  What is the High Priority Program and what entities are 
eligible for funding under the High Priority Program?

    The High Priority Program is a competitive financial assistance 
program available to States, local governments, Federally-recognized 
Indian Tribes, other political jurisdictions, and other persons to 
carry out high priority activities and projects that augment motor 
carrier safety activities and projects. The High Priority Program also 
promotes the deployment and use of innovative technology by States for 
CMV information systems and networks. Under this program, the 
Administrator may make competitive grants to and enter into cooperative 
agreements with eligible entities to carry out high priority activities 
and projects that augment motor carrier safety activities and projects. 
The Administrator also may award grants to States for projects planned 
in accordance with the Innovative Technology Deployment Program.


Sec.  350.403  What are the High Priority Program objectives?

    FMCSA may use the High Priority Program funds to support, enrich, 
or evaluate CMV safety programs and to:
    (a) Target unsafe driving of CMVs and non-CMVs in areas identified 
as high-risk crash corridors;
    (b) Improve the safe and secure movement of hazardous materials;
    (c) Improve safe transportation of goods and passengers in foreign 
commerce;
    (d) Demonstrate new technologies to improve CMV safety;
    (e) Support participation in PRISM by Lead State Agencies:
    (1) Before October 1, 2020, to achieve full participation in PRISM; 
and
    (2) Beginning on October 1, 2020, or once full participation in 
PRISM is achieved, whichever is sooner, to conduct special initiatives 
or projects that exceed routine operations for participation;
    (f) Support participation in PRISM by entities other than Lead 
State Agencies;
    (g) Support safety data improvement projects conducted by:
    (1) Lead State Agencies for projects that exceed MCSAP safety data 
requirements; or
    (2) Entities other than Lead State Agencies for projects that meet 
or exceed MCSAP safety data requirements;
    (h) Advance the technological capability and promote the Innovative 
Technology Deployment of intelligent transportation system applications 
for CMV operations by States;

[[Page 37805]]

    (i) Increase public awareness and education on CMV safety; or
    (j) Otherwise improve CMV safety.


Sec.  350.405  What conditions must an applicant meet to qualify for 
High Priority Program funds?

    (a) Motor carrier safety activities. To qualify for High Priority 
Program funds related to motor carrier safety activities under Sec.  
350.403 paragraphs (a) through (g), (i), and (j):
    (1) States must:
    (i) Participate in MCSAP under subpart B of this part; and
    (ii) Prepare a proposal that is responsive to the High Priority 
Program Notice of Funding Opportunity (NOFO).
    (2) Applicants other than States must, to the extent applicable:
    (i) Prepare a proposal that is responsive to the NOFO;
    (ii) Except for Federally-recognized Indian Tribes, coordinate the 
proposal with the Lead State Agency to ensure the proposal is 
consistent with State and national CMV safety program priorities;
    (iii) Certify that the applicant has the legal authority, 
resources, and trained and qualified personnel necessary to perform the 
functions specified in the proposal;
    (iv) Designate an individual who will be responsible for 
implementing, reporting, and administering the approved proposal and 
who will be the primary contact for the project;
    (v) Agree to prepare and submit all reports required in connection 
with the proposal or other conditions of the grant or cooperative 
agreement;
    (vi) Agree to use the forms and reporting criteria required by the 
Lead State Agency or FMCSA to record work activities to be performed 
under the proposal;
    (vii) Certify that a political jurisdiction will impose sanctions 
for violations of CMV and driver laws and regulations that are 
consistent with those of the State; and
    (viii) Certify participation in national databases appropriate to 
the project.
    (b) Innovative Technology Deployment activities. To qualify for 
High Priority Program funds for Innovative Technology Deployment 
activities under Sec.  350.403(h), States must:
    (1) Prepare a proposal that is responsive to the NOFO;
    (2) Have a CMV information systems and networks program plan 
approved by the Administrator that describes the various systems and 
networks at the State level that need to be refined, revised, upgraded, 
or built to accomplish deployment of CMV information systems and 
networks capabilities;
    (3) Certify to the Administrator that its CMV information systems 
and networks deployment activities, including hardware procurement, 
software and system development, and infrastructure modifications--
    (i) Are consistent with the national intelligent transportation 
systems and CMV information systems and networks architectures and 
available standards; and
    (ii) Promote interoperability and efficiency to the extent 
practicable; and
    (4) Agree to execute interoperability tests developed by FMCSA to 
verify that its systems conform with the national intelligent 
transportation systems architecture, applicable standards, and 
protocols for CMV information systems and networks.


Sec.  350.407  How and when does an eligible entity apply for High 
Priority Program funds?

    FMCSA publishes application instructions and criteria for eligible 
activities to be funded under this subpart in a NOFO at least 30 days 
before the financial assistance program application period closes. 
Entities must submit the application by the date prescribed in the 
NOFO.


Sec.  350.409  What response will an applicant receive under the High 
Priority Program?

    (a) Approval. If FMCSA awards a grant or cooperative agreement, the 
applicant will receive a grant agreement to execute.
    (b) Denial. If FMCSA denies the grant or cooperative agreement, the 
applicant will receive a notice of denial.


Sec.  350.411  How long are High Priority Program funds available to a 
recipient?

    (a) Motor carrier safety activities. High Priority Program funds 
related to motor carrier safety activities under Sec.  350.403(a) 
through (g), (i), and (j) obligated to a recipient are available for 
the rest of the fiscal year in which the funds are obligated and the 
next 2 full fiscal years.
    (b) Innovative Technology Deployment activities. High Priority 
Program funds for Innovative Technology Deployment activities under 
Sec.  350.403(h) obligated to a State are available for the rest of the 
fiscal year in which the funds were obligated and the next 4 full 
fiscal years.


Sec.  350.413  What are the Federal and recipient shares of costs 
incurred under the High Priority Program?

    (a) Federal share. FMCSA will reimburse at least 85 percent of the 
eligible costs incurred under the High Priority Program.
    (b) Match. In-kind contributions are acceptable in meeting the 
recipient's matching share under the High Priority Program if they 
represent eligible costs, as established by 2 CFR parts 200 and 1201 
and FMCSA in the NOFO.
    (c) Waiver. The Administrator reserves the right to reduce or waive 
the recipient's matching share in any fiscal year:
    (1) As announced in the NOFO; or
    (2) As determined by the Administrator on a case-by-case basis.


Sec.  350.415  What types of activities and projects are eligible for 
reimbursement under the High Priority Program?

    Activities that fulfill the objectives in Sec.  350.403 are 
eligible for reimbursement under the High Priority Program.


Sec.  350.417  What specific costs are eligible for reimbursement under 
the High Priority Program?

    (a) Costs eligible for reimbursement. All costs relating to 
activities eligible for reimbursement must be necessary, reasonable, 
allocable, and allowable under this subpart and 2 CFR parts 200 and 
1201. The eligibility of specific costs for reimbursement is addressed 
in the NOFO and is subject to review and approval by FMCSA.
    (b) Ineligible costs. High Priority Program funds may not be used 
for the:
    (1) Acquisition of real property or buildings; or
    (2) Development, implementation, or maintenance of a State registry 
of medical examiners.

PART 355--[Removed and Reserved]

0
2. Under the authority of 49 U.S.C. 504 and 31101 et seq., remove and 
reserve part 355, consisting of Sec. Sec.  355.1 through 355.25 and 
Appendix A to part 355.

PART 388--[Removed and Reserved]

0
3. Under the authority of 49 U.S.C. 113 and 502, remove and reserve 
part 388, consisting of Sec. Sec.  388.1 through 388.8.

    Issued under authority delegated in 49 CFR 1.87.
James A. Mullen,
Deputy Administrator.
[FR Doc. 2020-11464 Filed 6-23-20; 8:45 am]
BILLING CODE 4910-EX-P


