Lease and Interchange of Vehicles; Motor Carriers of Passengers
| Citation | 84 FR 40272 |
| Published date | 14 August 2019 |
| Record Number | 2019-17342 |
| Section | Rules and Regulations |
| Court | Federal Motor Carrier Safety Administration |
Federal Register, Volume 84 Issue 157 (Wednesday, August 14, 2019)
[Federal Register Volume 84, Number 157 (Wednesday, August 14, 2019)]
[Rules and Regulations]
[Pages 40272-40296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17342]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Part 390
[Docket No. FMCSA-2012-0103]
RIN 2126-AC07 and 2126-AC22
Lease and Interchange of Vehicles; Motor Carriers of Passengers
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Final rule.
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SUMMARY: FMCSA amends its May 27, 2015, final rule on Lease and
Interchange of Vehicles; Motor Carriers of Passengers (2015 final rule)
in response to petitions for rulemaking. This final rule narrows the
applicability of the 2015 final rule by excluding certain contracts and
other agreements between motor carriers of passengers that have active
passenger carrier operating authority registrations with FMCSA from the
definition of lease and the associated regulatory requirements. For
passenger carriers that remain subject to the leasing and interchange
requirements, FMCSA returns the bus marking requirement to its July 1,
2015, state with slight modifications to add references to leased
vehicles; revises the exception for the delayed writing of a lease
during certain emergencies; and removes the 24-hour lease notification
requirement.
DATES: This final rule is effective October 15, 2019. Compliance date:
As of October 15, 2019, the compliance date for the requirements in
subpart G of 49 CFR part 390 (Sec. Sec. 390.401 and 390.403) is
January 1, 2021.
Comments sent to the Office of Management and Budget (OMB) on the
collection of information must be received by OMB on or before
September 13, 2019. OMB must receive your comments by this date in
order to act quickly on the information collection request.
Petitions for reconsideration of this final rule must be submitted
to the
[[Page 40273]]
FMCSA Administrator no later than September 13, 2019.
ADDRESSES: All comments on the collection of information should
reference Federal Docket Management System (FDMS) Docket Number FMCSA-
2012-0103. Interested persons are invited to submit written comments on
information collection to the Office of Information and Regulatory
Affairs, Office of Management and Budget. Comments should be addressed
to the attention of the Desk Officer, Department of Transportation/
Federal Motor Carrier Safety Administration, and sent via:
Electronic mail: [email protected].
Fax: 1-202-395-6974.
Mail: Office of Information and Regulatory Affairs, Office
of Management and Budget, Docket Library, Room 10102, 725 17th Street
NW, Washington, DC 20503.
To avoid duplication, please use only one of these three methods.
Petitions for reconsideration of this final rule must be submitted
in accordance with 49 CFR 389.35 and submitted to the FMCSA
Administrator, Federal Motor Carrier Safety Administration, 1200 New
Jersey Ave. SE, Washington, DC 20590-0001.
FOR FURTHER INFORMATION CONTACT: Ms. Loretta Bitner, (202) 366-2400,
[email protected], Office of Enforcement and Compliance. FMCSA
office hours are from 9 a.m. to 5 p.m., Monday through Friday, except
Federal holidays.
SUPPLEMENTARY INFORMATION:
This final rule is organized as follows:
I. Rulemaking Documents
A. Availability of Rulemaking Documents
B. Privacy Act
II. Executive Summary
A. Purpose of the Final Rule
B. Summary of the Major Provisions
C. Costs and Benefits
III. Abbreviations
IV. Legal Basis
V. Discussion of Proposed Rulemaking and Comments
A. Proposed Rulemaking
B. Comments and Responses
C. Examples of Final Rule Implementation
VI. International Impacts
VII. Section-by-Section Description of the Rule
A. Section 390.5 Definitions
B. Section 390.21 Marking of Self-Propelled CMVs and Intermodal
Equipment
C. Part 390, Subpart F Lease and Interchange of Passenger-
Carrying Commercial Motor Vehicles
D. Part 390, Subpart G Lease and Interchange of Passenger-
Carrying Commercial Motor Vehicles
E. Section 390.401 Applicability
F. Section 390.403 Lease and Interchange Requirements
VIII. Regulatory Analyses
A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563
(Improving Regulation and Regulatory Review), and DOT Regulatory
Policies and Procedures
B. E.O. 13771 (Reducing Regulation and Controlling Regulatory
Costs)
C. Regulatory Flexibility Act
D. Assistance for Small Entities
E. Unfunded Mandates Reform Act of 1995
F. Paperwork Reduction Act
G. E.O. 13132 (Federalism)
H. E.O. 12988 (Civil Justice Reform)
I. E.O. 13045 (Protection of Children)
J. E.O. 12630 (Taking of Private Property)
K. Privacy
L. E.O. 12372 (Intergovernmental Review)
M. E.O. 13211 (Energy Supply, Distribution, or Use)
N. E.O. 13783 (Promoting Energy Independence and Economic
Growth)
O. E.O. 13175 (Indian Tribal Governments)
P. National Technology Transfer and Advancement Act (Technical
Standards)
Q. Environment (NEPA and CAA)
I. Rulemaking Documents
A. Availability of Rulemaking Documents
For access to docket FMCSA-2012-0103 to read background documents
and comments received, go to http://www.regulations.gov at any time, or
to Docket Services at U.S. Department of Transportation, Room W12-140,
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 www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.
II. Executive Summary
A. Purpose of the Final Rule
FMCSA revises its regulations governing the lease and interchange
of passenger-carrying commercial motor vehicles (CMVs). This rule
excludes from the lease and interchange requirements motor carriers
that operate CMVs and have active operating authority registration \1\
with FMCSA to transport passengers--hereafter called ``authorized
carriers'' or ``carriers with operating authority'' for the sake of
simplicity. This rule also excludes financial leases.\2\ For leases
between authorized carriers, the assignment of responsibility for
regulatory compliance requires no additional regulatory obligations
because FMCSA believes their identity can be determined by other means,
principally because each authorized for-hire motor carrier must conduct
the transportation in its own name, under its own authority, with its
owned, leased, or borrowed vehicles, and is therefore responsible for
compliance with the FMCSRs.
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\1\ Operating authority registration is defined in 49 CFR 390.5.
The phrase ``means the registration required by 49 U.S.C. 13902
[Registration of motor carriers], 49 CFR part 365 [Rules Governing
Applications for Operating Authority], 49 CFR part 368 [Application
for a Certificate of Registration to Operate in Municipalities in
the United States on the United States-Mexico International Border
or Within the Commercial Zones of Such Municipalities], and 49 CFR
392.9a [Operating authority].'' ``Active'' in the context of
operating authority registration means FMCSA has granted the motor
carrier operating authority registration through issuance of a valid
certificate, permit, or license as provided in Sec. Sec. 365.115(b)
or 368.6(d), and FMCSA has not suspended or revoked that
certificate, permit, or license for various statutory or regulatory
reasons.
\2\ See Sec. 390.301(b)(1) of the 2015 final rule and Sec.
390.401(b)(2) of this final rule.
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B. Summary of the Major Provisions
The rule (1) revises the definition of lease to exclude authorized
carriers that grant the use of their vehicles to each other; (2)
removes the May 27, 2015, final rule's marking requirements and
reinstates the previous vehicle marking requirements with slight
modifications; (3) revises the provision allowing a delay in the
completion of a lease during certain emergencies; and (4) removes the
requirement that motor carriers chartered for a trip who lease a CMV
from another carrier to provide the transportation must notify the tour
operator or group of passengers about the lease and the lessor.
C. Costs and Benefits
The Agency estimates that an annual average of 8,366 motor carriers
of passengers and 547,034 passenger-carrying CMV trips will experience
regulatory relief under this final rule. Approximately 75 percent of
these passenger carriers and CMV trips will experience full regulatory
relief and will no longer be subject to the lease and interchange
requirements of the 2015 final rule. The remaining 25 percent of these
passenger carriers and CMV trips will experience partial regulatory
relief and remain subject to reduced lease and interchange
requirements, compared to those of the 2015 final rule.
As presented in Table 1, the Agency estimates that the rule will
result in a cost savings of $76.5 million on an
[[Page 40274]]
undiscounted basis, $67.7 million discounted at 3 percent, and $58.5
million discounted at 7 percent over the 10-year analysis period,
expressed in 2016 dollars. On an annualized basis, this equates to a
10-year cost savings of $7.9 million at a 3 percent discount rate and
$8.3 million at a 7 percent discount rate. This final rule has total
costs less than zero, and is therefore a deregulatory action under
Executive Order 13771.
Table 1--Summary of the Total Cost of the Rule
[in thousands of 2016$]
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Undiscounted Discounted
Passenger carriers Passenger-carrying ------------------------------------------------------------------
experiencing CMV trips Charter
Year regulatory relief experiencing Lease and party Total costs Discounted Discounted
under the rule regulatory relief interchange notification \(b)\ at 3% at 7%
under the rule costs \(a)\ costs
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2021......................................... 8,046 526,111 ($25,747) ($1,189) ($26,936) ($26,152) ($25,174)
2022......................................... 8,116 530,654 (4,114) (1,199) (5,315) (5,009) (4,642)
2023......................................... 8,186 535,237 (4,150) (1,210) (5,360) (4,906) (4,376)
2024......................................... 8,256 539,859 (4,187) (1,220) (5,407) (4,804) (4,125)
2025......................................... 8,328 544,521 (4,224) (1,231) (5,453) (4,704) (3,888)
2026......................................... 8,400 549,224 (4,260) (1,241) (5,500) (4,607) (3,665)
2027......................................... 8,472 553,967 (4,296) (1,252) (5,548) (4,511) (3,455)
2028......................................... 8,545 558,751 (4,333) (1,263) (5,596) (4,417) (3,257)
2029......................................... 8,619 563,576 (4,370) (1,274) (5,644) (4,326) (3,070)
2030......................................... 8,693 568,443 (4,409) (1,285) (5,693) (4,236) (2,894)
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Total.................................... .................. .................. (64,089) (12,363) (76,453) (67,672) (58,546)
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Annualized................................... .................. .................. ............ ............ (7,645) (7,933) (8,336)
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Notes:
(a) Values shown in parentheses are negative values (i.e., less than zero) and represent a decrease in cost or a cost savings.
(b) Total cost values may not equal the sum of the components due to rounding. (The totals shown in this column are the rounded sum of unrounded
components.)
The regulatory evaluation for the 2015 final rule addressed the
potential safety benefits of lease and interchange requirements for
motor carriers of passengers.\3\ There was insufficient data and
empirical evidence to demonstrate a measurable quantitative
relationship between lease and interchange requirements for passenger-
carrying CMVs and improved safety outcomes such as reduced frequency
and/or severity of crashes or reduced frequency of violations.
Therefore, FMCSA performed a threshold analysis, also referred to as a
break-even analysis, estimating the reduction in crashes that would
need to occur as a consequence of the 2015 final rule for the benefits
of the rule to exactly offset the estimated costs of the rule.
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\3\ U.S. Department of Transportation (DOT), FMCSA. ``Final
Rule. Lease and Interchange of Vehicles; Motor Carriers of
Passengers. Regulatory Evaluation.'' May 2015. Docket ID# FMCSA-
2012-0103-0022. Available at: https://www.regulations.gov/contentStreamer?documentId=FMCSA-2012-0103-0022&attachmentNumber=1&contentType=pdf (accessed June 3, 2019).
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In considering the potential impact to safety benefits from this
final rule, the Agency notes that there remains insufficient data and
empirical evidence to demonstrate a measurable quantitative
relationship between lease and interchange requirements for passenger-
carrying CMVs and improved safety outcomes. Lease and interchange
requirements for motor carriers of passengers improve the ability of
the Agency and our State partners to attribute inspection, compliance,
enforcement, and safety data to the correct motor carrier and driver,
allowing FMCSA and our State partners to more accurately identify
unsafe carriers and initiate appropriate interventions. FMCSA believes
that the lease and interchange requirements of this rule are a less
costly and burdensome regulatory approach than the requirements of the
2015 final rule, yet still enable safety officials and the public to
identify the passenger carrier responsible for safety because each
authorized for-hire motor carrier must conduct the transportation in
its own name, under its own authority, with its owned, leased, or
borrowed vehicles, and is therefore responsible for compliance with the
FMCSRs. The Agency does not anticipate any change to safety benefits as
a result of the rule.
III. Abbreviations
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1935 Act.......................... Motor Carrier Act of 1935.
1984 Act.......................... Motor Carrier Safety Act of 1984.
2015 final rule................... May 27, 2015, Lease and Interchange
of Vehicles; Motor Carriers of
Passengers final rule, 80 FR 30164.
ABA............................... American Bus Association.
BLS............................... Bureau of Labor Statistics.
CMV............................... Commercial Motor Vehicle.
DART.............................. Data Analysis and Reports Team.
DOL............................... United States Department of Labor.
DOT............................... United States Department of
Transportation.
ECEC.............................. Employer Costs for Employee
Compensation.
E.O............................... Executive Order.
FMCSA............................. Federal Motor Carrier Safety
Administration.
FMCSRs............................ Federal Motor Carrier Safety
Regulations, 49 CFR parts 350
through 399.
FR................................ Federal Register.
ICCTA............................. ICC [Interstate Commerce Commission]
Termination Act of 1995.
L&I............................... Licensing and Insurance.
MCBOA............................. Minnesota Charter Bus Operators
Association.
MAP-21............................ Moving Ahead for Progress in the
21st Century Act.
MCMIS............................. Motor Carrier Management Information
System.
NPRM.............................. Notice of Proposed Rulemaking.
NTSB.............................. National Transportation Safety
Board.
OMB............................... Office of Management and Budget.
PRA............................... Paperwork Reduction Act of 1995.
RFA............................... Regulatory Flexibility Act.
SBA............................... Small Business Administration.
SOC............................... Standard Occupational
Classification.
UMA............................... United Motorcoach Association.
U.S.C............................. United States Code.
VIN............................... Vehicle Identification Number.
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IV. Legal Basis
This rule is based on the authority of the Motor Carrier Act of
1935 (1935 Act) and the Motor Carrier Safety Act of 1984 (1984 Act), as
amended.
The 1935 Act authorizes DOT to ``prescribe requirements for--(1)
qualifications and maximum hours of service of employees of, and safety
of operation and equipment of, a motor carrier; and (2) qualifications
and maximum hours of service of employees of, and standards of
equipment of, a motor private carrier, when needed to promote safety of
operation'' (49 U.S.C. 31502(b)).\4\
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\4\ See https://www.gpo.gov/fdsys/pkg/USCODE-2017-title49/pdf/USCODE-2017-title49-subtitleVI-partB-chap315.pdf (accessed June 3,
2019).
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The 1984 Act confers on DOT authority to regulate drivers, motor
carriers, and CMVs. ``At a minimum, the regulations shall ensure that--
(1) commercial motor vehicles are
[[Page 40275]]
maintained, equipped, loaded, and operated safely; (2) the
responsibilities imposed on operators of commercial motor vehicles do
not impair their ability to operate the vehicles safely; (3) the
physical condition of operators of commercial motor vehicles is
adequate to enable them to operate the vehicles safely . . . ; and (4)
the operation of commercial motor vehicles does not have a deleterious
effect on the physical condition of the operators'' (49 U.S.C.
31136(a)). Section 32911 of the Moving Ahead for Progress in the 21st
Century Act (MAP-21) [Pub. L. 112-141, 126 Stat. 405, 818, July 6,
2012] enacted a fifth requirement, i.e., to ensure that ``(5) an
operator of a commercial motor vehicle is not coerced by a motor
carrier, shipper, receiver, or transportation intermediary to operate a
commercial motor vehicle in violation of a regulation promulgated under
this section, or chapter 51 or chapter 313 of this title'' [49 U.S.C.
31136(a)(5)].\5\
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\5\ See https://www.gpo.gov/fdsys/pkg/USCODE-2017-title49/pdf/USCODE-2017-title49-subtitleVI-partB-chap311-subchapIII-sec31136.pdf
(accessed June 3, 2019).
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The 1984 Act also includes more general authority to ``(8)
prescribe recordkeeping . . . requirements; . . . and (10) perform
other acts the Secretary considers appropriate'' (49 U.S.C.
31133(a)).\6\
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\6\ See https://www.gpo.gov/fdsys/pkg/USCODE-2017-title49/pdf/USCODE-2017-title49-subtitleVI-partB-chap311-subchapIII-sec31133.pdf
(accessed June 3, 2019).
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This rule imposes legal and recordkeeping requirements consistent
with the 1935 and 1984 Acts on certain for-hire and private passenger
carriers that operate CMVs, to enable safety officials and the public
to identify the passenger carrier responsible for safety. Although the
USDOT number serves a similar function, it does not assign
responsibility when CMVs are exchanged between two or more parties,
leaving an information gap filled by this rule. Currently, many
passenger-carrying CMVs and drivers are rented, loaned, leased,
interchanged, assigned, and reassigned with few records and little
formality, thus obscuring the operational safety responsibility of
certain industry participants. The more accurate, targeted enforcement
allowed by this rule will help the Agency meet the mandate of 49 U.S.C.
31136(a)(1) to ensure that passenger-carrying CMVs, like other
vehicles, are ``operated safely.'' The rule does not address the
requirements of 49 U.S.C. 31136(a)(2)-(4). Because this rule has only
indirect and minimal application to drivers of passenger-carrying
CMVs--at most, their employers might require them to pick up a lease
document and place it on the vehicle, though that task could also be
assigned to other employees--FMCSA believes that coercion of drivers to
violate the rule will not occur (49 U.S.C. 31136(a)(5)).
Before prescribing any regulations, FMCSA must also consider their
``costs and benefits'' (49 U.S.C. 31136(c)(2)(A) and 31502(d)). Those
factors are discussed in this final rule.
V. Discussion of Proposed Rulemaking and Comments
A. Proposed Rulemaking
FMCSA published a notice of proposed rulemaking (NPRM) on September
20, 2018 (83 FR 47764) (2018 NPRM), that proposed several changes to
the lease and interchange requirements added to 49 CFR part 390 by the
2015 final rule (80 FR 30164). The proposals included narrowing the
applicability of the rule, excluding certain contracts and other
agreements between motor carriers of passengers with operating
authority from the definition of lease and the associated regulatory
requirements, excluding financial leases,\7\ and returning the Sec.
390.21(e) marking requirement to its July 1, 2015, state with slight
modifications to add references to leased vehicles. The NPRM also
proposed to revise the delayed writing of a lease during certain
emergencies; remove the 24-hour lease notification requirement; and
extend the compliance date for the 2015 final rule to January 1, 2021,
to give the Agency sufficient time to complete this final rule.
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\7\ Financial lease (however designated, e.g., lease, closed-end
lease, hire purchase, lease purchase, purchase agreement,
installment plan, demonstration or loaner vehicle, etc.) as defined
in Sec. 390.401(b)(2) means a contract between a motor carrier and
a bank or similar financial organization or a manufacturer or dealer
of passenger-carrying CMVs.
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B. Comments and Responses
Eighteen comments to the 2018 NPRM were received from the following
parties: American Bus Association (ABA), United Motorcoach Association
(UMA), Greyhound Lines, Coach USA, Adirondack Trailways, Annett Bus
Lines, Southern Tier Stages, Northwest Motorcoach Association, Peter
Pan Bus Lines, Jefferson Bus Lines, Plymouth & Brockton Street Railway
Company, Academy Bus, DeCamp Bus Lines, Burlington Trailways, FlixBus
Inc., Pacific Coachways Charter Services, Thielen Bus Lines,\8\ and a
private citizen.
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\8\ The commenter states he is a board member of the Minnesota
Charter Bus Operators Association (MCBOA). He submitted comments on
his own behalf, and as a representative of the other 32 members of
the MCBOA.
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Extension of the Compliance Date
Extension of the compliance date was supported by ABA, Academy Bus,
Coach USA, Adirondack Trailways, Annett Bus Lines, Southern Tier
Stages, Inc., Northwest Motorcoach Association, Peter Pan Bus Lines,
Jefferson Bus Lines, Plymouth & Brockton, DeCamp Bus Lines, Burlington
Trailways, UMA, Greyhound, Thielen Bus Lines, and Pacific Coachways
Charter Services.
FMCSA Response
On December 4, 2018, FMCSA published a final rule extending the
compliance date for the 2015 final rule to January 1, 2021 (83 FR
62505). This final rule will use the January 1, 2021 compliance date
set by the December 2018 final rule.
General Applicability
The NPRM proposed revising the general applicability section to add
two exceptions to the applicability requirements of the lease and
interchange rule. Under the NPRM, section 390.401(b) would be modified
in several ways. First, a new exception in paragraph (b)(1) would
exclude from the rule contracts and agreements between passenger
carriers with active passenger carrier operating authority registration
\9\ when one such carrier acquires transportation services from another
such carrier. Second, the 2015 exception for financial leases would be
revised to remove the requirement that the bank or similar financial
organization, manufacturer, or dealer must be a motor carrier to
utilize the exception from the rule. This is because such entities are
motor carriers if they move their vehicle inventory between business
locations before purchases. Third, as proposed, the limited exception
for passenger-carrying CMVs exchanged or interchanged between or among
commonly owned and controlled motor carriers would be removed.
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\9\ Operating authority registration means the registration
required by 49 U.S.C. 13902, 49 CFR part 365, 49 CFR part 368, and
49 CFR 392.9a as defined in 49 CFR 390.5. ``Active'' in the context
of operating authority registration means FMCSA has granted the
motor carrier operating authority registration through issuance of a
valid certificate, permit, or license as provided in Sec. Sec.
365.115(b) or 368.6(d), and FMCSA has not suspended or revoked that
certificate, permit, or license for various statutory or regulatory
reasons.
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Fourth, as proposed, the limited exception for passenger-carrying
CMVs exchanged or interchanged between or among motor carriers that are
a party to a revenue pooling agreement approved by the STB in
accordance with 49 U.S.C
[[Page 40276]]
14302 would be removed. All passenger carriers that are commonly owned
and controlled or participate in STB-approved revenue pooling
agreements operate in interstate commerce and should have operating
authority. Under the NPRM, an authorized carrier that obtains a vehicle
from another commonly owned and controlled authorized carrier or
another authorized participant in an STB-approved pooling agreement,
would not be subject to the lease and interchange requirement.
Accordingly, a separate exception for carriers operating under an STB-
approved pooling agreement would no longer be necessary.
Greyhound Lines, Coach USA, Adirondack Trailways, Annett Bus Lines,
Southern Tier Stages, Northwest Motorcoach Association, Peter Pan Bus
Lines, Jefferson Bus Lines, Plymouth & Brockton Street Railway Company,
Academy Bus, DeCamp Bus Lines, Burlington Trailways, FlixBus Inc.,
Pacific Coachways Charter Services, Thielen Bus Lines, ABA, and UMA
supported the proposed general applicability section, including the
proposed active operating authority registration exception, maintaining
the financial lease exception, and the removal of the two limited
exceptions for commonly owned and controlled authorized carriers and
STB-approved pooling agreements.
The UMA commented that the rule should not compel two or more
carriers, all possessing the requisite valid Federal operating
authority, to enter a lease they would not otherwise enter when
engaging each other's services. UMA believes that inspections and
crashes should be attributed to the chartered, contracted, or
subcontracted carrier that possesses the sole, direct responsibility
for compliance and control of vehicle maintenance and driver
qualifications and behavior.
Academy Bus adds this ``is a key issue to allow legally operating
carriers to utilize the services of other legally operating carriers to
meet demand fluctuations. Other carriers provide their buses and
drivers to complete sub-contracted work. The recipient maintains their
own operating authority, own insurance program and manage their own
operations. The carrier sub-contracting the work has no input into the
sub-contracted (recipient) carrier's operations. There is no ambiguity
as to what buses on the road are operated by which company and/or
authority. This is not a lease issue as there is no control over the
other carrier's equipment or drivers.''
FMCSA Response
The Agency adopts without change the proposed general applicability
section to the leasing requirements for passenger carriers, including
the proposed exception for passenger carriers with active operating
authority registration, maintaining the financial lease exception, and
the removal of the two limited exceptions for commonly owned and
controlled authorized carriers and STB-approved pooling agreements. The
lease and interchange regulations do not directly affect safety.
Rather, they help FMCSA, the National Transportation Safety Board
(NTSB), and State safety officials to identify the passenger carrier
responsible for safety and to assign inspection, compliance, crash, and
enforcement data to the correct carrier and driver, allowing the
Agency, NTSB, and the States to more accurately identify unsafe and
high risk carriers and to take appropriate action. The changes made by
this rule will not adversely affect safety because authorized carriers
involved in chartering (or subcontracting) with each other assume
responsibility for their own regulatory compliance, and are readily
identifiable. In addition, banks or similar financial organizations,
manufacturers, or dealers: (a) Must not be a motor carrier in order to
use the exception from this leasing rule; (b) will be deemed a private
motor carriers of property when moving its empty passenger vehicle
inventory between business locations before purchases; and (c) will
have to comply fully with all 49 CFR parts 300 to 399 regulations
during these moves of empty passenger vehicle inventory between
business locations.
Definitions
The Agency proposed to revise the definition of lease in Sec.
390.5 to include only contracts and agreements in which a motor carrier
grants the use of a passenger-carrying CMV to another motor carrier
when at least one of the motor carriers is not an authorized
carrier.\10\ Authorized carriers of passengers routinely assist one
another by providing transportation services during demand surges,
emergencies, or events that require more than their available capacity.
These common agreements, some of which amount to subcontracting, will
not meet the regulatory definition of a lease in this final rule.
Authorized carriers or passengers that are hired by another authorized
carrier of passengers have traditionally assumed responsibility for
their own regulatory compliance and liability. This practice has long
been acceptable to the insurance industry. Furthermore, authorized
carriers of passengers are readily identifiable to enforcement
personnel, making a separate lease agreement assigning regulatory
responsibility unnecessary.
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\10\ This rulemaking does not change the definition of lease in
the context of property-carrying vehicles in 49 CFR 376.2.
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The definition of lease was proposed to be narrowed by including
only contracts and agreements granting the use of a passenger-carrying
CMV between motor carriers when one (or more) such carrier does not
have active operating authority registration. The term lease also has
been revised as proposed with added language to include circumstances
when no compensation is specified. The terms lessee and lessor have
both been revised slightly to specify that the granting of passenger-
carrying CMV usage is through a lease.
The ABA, UMA, Jefferson Bus Lines, Plymouth & Brockton, Academy Bus
LLC, DeCamp Bus Lines, Burlington Trailways, Thielen Bus Lines, and
Coach USA support the Agency's proposal to exclude from the definition
of lease chartering between or among authorized passenger carriers. ABA
writes ``This change is consistent with the Agency's stated goal of
ensuring a lessor relinquishes all control of a passenger carrying
commercial motor vehicle (CMV) for the full term of a lease. In the
case of chartering or subcontracting, there is no surrender of the
vehicle and thus these types of operations do not fit within definition
of a lease. During a charter transaction, the vehicles remain within
the control of the respective charter parties, each party is
responsible for dispatching and maintaining its respective vehicles,
and each party is responsible for regulatory compliance. Thus, in-line
with FMCSA's underlying oversight philosophy, each carrier in a charter
transaction is held accountable for maintaining its own respective
operating authority. This is the fundamental basis by which FMCSA
conducts enforcement and can ensure carriers remain compliant.
Alternatively, applying the same logic, for carriers with no operating
authority, a lease requirement demonstrating the full surrender of the
vehicle for the entire term of the lease also supports FMCSA's
oversight philosophy by ensuring a responsible carrier with operating
authority is always controlling the vehicles operating on the road,
thereby limiting opportunities to circumvent the law.''
[[Page 40277]]
FMCSA Response
The Agency adopts without change the proposed exception to the
leasing requirements for passenger carriers with active operating
authority.
Marking of Self-Propelled CMVs and Intermodal Equipment
Before the 2015 rule, a motor carrier operating a CMV under a
rental agreement having a term of not more than 30 calendar days could
mark the CMV with either (1) the name and USDOT identification number
of the lessee, or (2) the name and USDOT identification number of the
lessor if, in the latter case, a fully complete lease is carried on the
rented CMV during the full term of the lease. The 2015 final rule
required that a motor carrier operating a passenger-carrying CMV under
a lease must add an additional marking device on the CMV temporarily on
the right (curb) side of the vehicle on or near the front passenger
door. The 2015 rule's temporary device would show the legal or trade
name and USDOT number of the carrier operating the vehicle, preceded by
the words ``operated by.''
Industry commenters to the 2016 NOI and the 2017 proposal argued
that the 2015 final rule imposes burdensome marking requirements that
are impractical, and that there are less burdensome ways to address the
Agency's concerns.
The 2018 NPRM proposed to eliminate the cost of additional marking
of the vehicles while maintaining all of the information necessary for
enforcement officials to identify the carrier for regulatory
compliance. FMCSA also proposed to add paragraph (e)(2)(v) to allow a
passenger-carrying CMV operating under the 48-hour emergency exception
pursuant to Sec. 390.403(a)(2) to be excepted from paragraphs
(e)(2)(iii) and (iv) regarding a lease document with required
information being carried on the vehicle, provided the lessor and
lessee comply with the requirements of the provision in Sec.
390.403(a)(2).
The ABA, UMA, Jefferson Bus Lines, Plymouth & Brockton, Academy Bus
LLC, DeCamp Bus Lines, Burlington Trailways, Thielen Bus Lines, and
Coach USA support removing the 2015 final rule's CMV marking
requirements and restoring the previous Sec. 390.21(e) with slight
modifications to comport with the leasing requirements proposed under
the 2018 NPRM. ABA noted that ``This change addresses the industry's
concerns with the impracticality of the 2015 final rule requirements
while still providing enforcement officials with sufficient information
to identify carriers for regulatory compliance. By restoring the
marking requirements of the pre-2015 final rule, the Agency is
addressing a major industry concern that threatened to severely
restrict current operations, particularly at high-volume periods,
leading to a reduction of capacity in the system without providing any
additional safety benefit. As well, FMCSA's proposed modifications to
49 CFR 390.21(e), to address operations under a lease agreement, are
sufficiently tailored to ensure enforcement officials continue to have
access to appropriate information in those circumstances.''
FMCSA Response
The Agency agrees with these comments and implements the marking
revision as proposed. Enforcement officials will be able to use the
markings on the sides of the passenger CMV and the lease or the Sec.
390.403(a)(2) summary document to determine the identity of the carrier
responsible for safety and to assign inspection, compliance, crash, and
enforcement data to the correct carrier and driver. FMCSA has therefore
concluded that this change will not adversely affect safety.
Section 390.21 in this final rule is similar to the text in effect
before the May 27, 2015, final rule. FMCSA removes the special marking
regulations for leased and interchanged passenger-carrying CMVs in
paragraph (f). Section 390.21 has been revised to treat leased
passenger-carrying CMVs like all other rented CMVs. For a lease of 30
calendar days or less, the lessee can opt to mark the vehicle with
either the lessee's information or the lessor's information. However,
the latter would require a fully executed copy of the lease be carried
on the vehicle, unless the CMV is being operated for up to 48 hours
under the emergency related provisions of Sec. 390.403(a)(2).
If the motor carrier is operating a passenger-carrying CMV under a
lease or rental agreement for more than 30 calendar days, the CMV must
be marked with the lessee's identification information. In a lease
situation, the operating motor carrier is the lessee. These revised
regulations address petitioners' concerns that there is no easy way to
display a temporary marking on certain passenger-carrying motor
vehicles for short term leases. FMCSA sets a compliance date of January
1, 2021, for passenger-carrying CMVs subject to the lease and
interchange rules, which is identical to the compliance date for the
rules themselves. To be clear, a transaction involving a motor carrier
operating a passenger-carrying CMV financed by a bank or similar
financial organization, or provided by a manufacturer or dealership for
demonstration purposes or to replace a vehicle being serviced or
repaired, is not subject to the lease and interchange requirements in
49 CFR part 390 subpart G as provided by the 2015 final rule and
retained in Sec. 390.401(b)(2) Financial leases. None of these
financial lease arrangements is considered to be a lease, interchange,
or rental of a CMV under the definition of lease in Sec. 390.5 because
banks and other similar financial organizations do not operate
passenger-carrying CMVs as a motor carrier. In these cases, the motor
carrier that is granted use of the passenger-carrying CMV has full
responsibility for the operation of such vehicle and compliance with
the vehicle marking requirements in Sec. 390.21 for the duration of
the arrangement. However, it should also be noted that a motor carrier
that obtained a passenger-carrying CMV through a loan from a bank or
similar financial organization, may be responsible for compliance if it
leases that vehicle to another motor carrier of passengers.
Customer Notification
The 2018 NPRM proposed to remove the requirement in the 2015 rule's
Sec. 390.305 to notify the passenger group or their representative
within 24 hours after the primary contractor reassigns the
transportation to a subcontractor.
The ABA, UMA, Jefferson Bus Lines, Plymouth & Brockton, Academy Bus
LLC, DeCamp Bus Lines, Burlington Trailways, Thielen Bus Lines, and
Coach USA support FMCSA's proposal to remove the 24-hour lease
notification requirement for subcontracted charter arrangements.
Multiple commenters said that if this requirement remained in place it
would be very difficult for motorcoach operators to maintain the
flexibility required to address emergency situations and public
necessity. They wrote that it would be impractical in terms of meeting
customer needs when time schedules for charter customers often restrict
motor carriers' ability to notify tour operators, unduly burdening the
operator. Further, they wrote that such notifications would not
necessarily provide any added safety benefit. Instead, they believe
that FMCSA ensures a greater safety benefit when all carriers providing
charter service have operating authority, either under their own USDOT
number or established under a formal lease arrangement as proposed
under the 2018 NPRM. UMA commented that ``This provision was one of the
least objectionable of the
[[Page 40278]]
2015 final rule by passenger carriers, indicative of the fact that most
passenger carriers advise their customers and/or passengers of
changes.''
FMCSA Response
The Agency removes the customer notification requirements, as
proposed. The Agency agrees with the comments received that the
notifications would have imposed burdens on the passenger carrier
industry and is more about customer protection than directly linked to
safety.
48-Hour Lease Delay Exception
When passengers are on a CMV and an emergency occurs that requires
a replacement vehicle from another motor carrier, the 2015 rule allows
the two carriers to postpone writing a lease or other written agreement
for up to 48 hours. The Agency believed the 48-hour window would
provide ample time for the parties to document the transaction.
One of the issues listed in the 2016 NOI was that FMCSA would
reconsider expanding applicability of the 48-hour delay provision for
preparing a lease to include emergencies when passengers are not
actually on board a bus (81 FR 59952, Aug. 31, 2016). FMCSA provided
examples of events that might require a motor carrier to obtain a
replacement vehicle immediately:
Buses might be needed to transport stranded passengers in
the event that Amtrak or airline service was suspended or disrupted. A
bus operator contracted to provide emergency service might need to
obtain additional drivers and vehicles without delay;
Last minute maintenance or mechanical issues, or driver
illness, might arise late in the evening or during the night (such as
on a multi-day charter or tour trip), or just prior to picking up a
group for a charter or scheduled service run.
In the 2017 proposal, FMCSA explained that it intended to broaden
the emergency 48-hour delay provision for preparing a lease authorized
by 49 CFR 390.303(a)(2) and remove the requirement that passengers
actually be on board a bus when the exception occurs.
Based on comments to the 2016 NOI and 2017 proposal, the 2018 NPRM
adopted the petitioners' recommendation to expand the regulatory
exception that permits the delayed writing of a lease during certain
emergencies (e.g., a crash, the vehicle is disabled) including when no
passengers are on the vehicle. FMCSA proposed to move the exception in
49 CFR 390.303(a)(2) to 49 CFR 390.403(a)(2). If a motor carrier
obtains a replacement vehicle from, or subcontracts for service with,
another motor carrier, the motor carriers may delay writing of a lease
during these emergency situations. However, a summary document signed
and dated by the lessee's driver or available company official must
state: ``[Carrier A, USDOT number, telephone number] has leased this
vehicle to [Carrier B, USDOT number, telephone number] pursuant to 49
CFR 390.403(a)(2)'' and the summary document must be carried on the
replacement vehicle for the duration of the lease. Enforcement
officials will be able to use this summary document to determine the
identity of the carrier responsible for regulatory compliance.
ABA, UMA, Jefferson Bus Lines, Plymouth & Brockton, Academy Bus
LLC, DeCamp Bus Lines, Burlington Trailways, Thielen Bus Lines, and
Coach USA support the 2018 NPRM's proposal. ABA writes, ``this is a
sound change that properly captures emergency situations for when
passengers are and are not on a vehicle. It also provides added
flexibility to address unexpected situations that have little lead time
and require short-term replacement vehicles. Additional flexibility,
when needing to meet customer needs both in the interest of safety and
comfort, is critical in terms of successfully conducting passenger
operations.''
UMA requested clarification in this final rule that ``. . . the
caveat that two or more passenger carriers possessing operating
authority are not compelled to enter into a lease continues to apply.''
UMA believes that the general exception from the leasing requirements
for passenger carriers with active operating authority in proposed
Sec. 390.401(b)(1) supersedes the delayed-lease provision in proposed
Sec. 390.403(a)(2) when both carriers in a replacement vehicle
scenario have operating authority.
FMCSA Response
FMCSA implements the delayed-lease provision as proposed. UMA's
understanding is correct; an authorized carrier hiring a replacement
CMV from another authorized carrier is not subject to the delayed-lease
provision of Sec. 390.403(a)(2). As stated above, enforcement
officials will be able to use the 48-hour lease delay exception summary
document to determine the identity of the carrier responsible for
safety and to assign inspection, compliance, crash, and enforcement
data to the correct carrier and driver. This will allow the Agency to
identify unsafe and high risk carriers and to take appropriate action.
Because the exception's summary document must be signed and dated by
the lessee's driver or available company official and carried on the
replacement vehicle for the duration of the lease, the vehicle will be
readily identifiable. FMCSA has concluded that this change will not
adversely affect safety.
Lease and Interchange Requirements
The lease and interchange requirements have been revised, as
proposed, by moving Sec. 390.303(a)(1)(iii), which covers written
agreements governing the renting, borrowing, loaning, or similar
transfer of a passenger-carrying CMV from another party, to Sec.
390.403(a)(1), which makes paragraph (a)(1)(iii) unnecessary.
Section 390.403(b) specifies the contents of lease and interchange
documents. This paragraph requires the lease, interchange agreement, or
other agreement to contain: (1) The name of the vehicle manufacturer,
the year of manufacture, and the last 6 digits of the Vehicle
Identification Number; (2) the legal names, contact information, and
signatures \11\ of both parties; (3) the time and date when the lease
begins and ends; and (4) a statement that the lessee has exclusive
possession and control of the leased vehicle and is responsible for
regulatory compliance.
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\11\ FMCSA allows the use of electronic signatures in accordance
with the Government Paperwork Elimination Act (Pub. L. 105-277, Sec.
1703, 112 Stat. 2681-749, Oct. 21, 1998). See FMCSA's ``Regulatory
Guidance Concerning Electronic Signatures and Documents (76 FR 411,
Jan. 4, 2011) and the Electronic Signature final rule's Sec. Sec.
390.5, 390.5T, and 390.32, April 16, 2018 (83 FR 16210, 16226-7).
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Previous Sec. 390.303(b)(4)(i)-(iii) was a slightly revised
version of 49 CFR 376.12(c)(1), (2) and (4). Paragraph (b)(4)(i) is
essential because it sets forth the basic reason for a lease from
FMCSA's point of view, namely to assign full responsibility for
regulatory compliance to the lessee. As proposed in the 2018 NPRM,
FMCSA makes this paragraph more concise, moves paragraph (b)(3)(ii) to
Sec. 390.403(b)(4)(ii), and retains only the last sentence of that
provision. Paragraph (b)(4)(iii) in the 2015 final rule is a useful
disclaimer, should questions arise about the status of the lessor
(contractor or employee) in a tax context, but FMCSA does not believe
it is essential. Therefore, FMCSA has shortened paragraphs (b)(4)(i)
and (b)(4)(ii) and has removed paragraph (b)(4)(iii).
FMCSA removes the requirement in previous Sec. 390.303(b)(5) that
the lease contain a statement that the lessee is responsible for
compliance with the insurance requirements of 49 CFR part 387.
[[Page 40279]]
Previous Sec. 390.303(c) and (d) have been merged and made more
concise and transferred to Sec. 390.403(c), which states that a copy
of the lease must be carried in the passenger-carrying CMV during the
period of the lease or interchange agreement. Both the lessee and
lessor retain the lease or interchange agreement for 1 year afterwards.
Previous Sec. 390.303(e) regarding receipts has been removed.
FMCSA has decided it does not need receipts when vehicles are
surrendered to the lessee and returned to the lessor. If FMCSA or
another government enforcement agency sought to assign a safety
incident to the lessee or the lessor based on a lease or other
agreement that had already been terminated, the former parties to the
lease would have to decide how to document that premature
termination.As proposed, FMCSA removes the requirements of Sec.
390.303(f) for additional temporary markings of leased and interchanged
passenger-carrying CMVs, and returns to the text of the marking rule in
Sec. 390.21(e) that was effective on July 1, 2015, with slight
modifications. The modifications add references to leased passenger-
carrying CMVs in paragraph (e) to provide an option similar to that for
rented CMVs. This modification would eliminate the cost of additional
marking of the vehicles while maintaining all of the information
necessary for enforcement officials to identify the carrier for
regulatory compliance.
No comments were received about these lease and interchange
requirements in Sec. 390.403 covering written agreements governing the
renting, borrowing, loaning, or similar transfer of a passenger-
carrying CMV from another party.
FMCSA Response
As the Agency received no comments about the proposed Sec. 390.403
lease and interchange requirements for passenger carriers, the
requirements are adopted with a reference to the compliance date. FMCSA
adds a January 1, 2021, compliance date for passenger-carrying CMVs
subject to the lease and interchange rules to Sec. 390.401's
introductory phrase.
This final rule helps FMCSA, NTSB, and State safety officials to
identify the passenger carrier responsible for safety and to assign
inspection, compliance, crash, and enforcement data to the correct
carrier and driver, allowing the Agency, NTSB, and other enforcement
officials to more accurately identify the carrier for regulatory
compliance, identify unsafe and high risk carriers, and to take
appropriate action. FMCSA has concluded that the changes in the lease
and interchange requirements of this final rule will not adversely
affect safety.
Example of Proposed Rule Implementation
A private citizen, Lawrence F. Hughes, requested clarification of
the implementation example for ``Subcontracting Among Regular Route
Authorized Carriers'' [83 FR 47764, at 47773] and restated below under
section VII. B. In the example, authorized carrier A hires authorized
carrier B to continue authorized carrier A's regular-route
transportation service to carrier A's regular-route trip destination.
Mr. Hughes argues that the example lacks necessary details to be
sufficiently clear as to the circumstances when it applies, and that
the example fails to note when it does not apply and the rules for
leases must be followed. He suggested either clarification of the
example or a change in the method by which FMCSA registers motor
carriers of passengers.
FMCSA Response
First, changing the method by which FMCSA registers motor carriers
of passengers is outside the scope of the 2018 NPRM.
Second, regardless of whether the active operating authority
registration is of the subtype ``regular route'' or ``charter and
special transportation,'' each authorized for-hire motor carrier must
conduct the transportation in its own name, under its own authority,
with its owned, leased, or borrowed vehicles, and is therefore
responsible for compliance with the FMCSRs.
Third, the ICC Termination Act of 1995 (ICCTA) [Pub. L. 104-88, 109
Stat. 803, 880, Dec. 29, 1995, codified at 49 U.S.C. 13902] eliminated
``regular route'' or ``charter and special transportation'' limitations
when registering most motor carriers of passengers. Before ICCTA, the
statute required all for-hire motor carrier of passengers to
administratively register with the ICC as subtype ``regular route'' or
``charter and special transportation'' motor passenger carrier, and
generally prohibited that motor carrier from doing the other subtypes
of passenger transportation service, unless granted additional
operating authority to do so. The ICCTA eliminated these administrative
labels, except for registrations for motor carriers that are ``public
recipients of governmental assistance.'' \12\ Thus, a motor carrier of
passengers previously issued ``regular route'' operating authority has
general authority to perform ``charter and special transportation,''
whatever its certificate, permit, or license may say. Similarly, a
motor carrier of passengers previously issued ``charter and special
transportation'' operating authority also has general authority to
perform ``regular route'' service. This elimination of administrative
service terminology is similar to the ICCTA's removal of the
registration labels and transportation service limitations of
``common'' and ``contract'' motor carriers.\13\
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\12\ See 49 U.S.C. 13902(b)(1) and (2), and 49 CFR 365.101(e).
\13\ Many instances of the terms ``common'' and ``contract''
were removed in the Unified Registration System (URS) final rules
published in 2013, 2015, and 2016 (Final Rule, Unified Registration
System, 78 FR 52608 (Aug. 23, 2013), amendments, corrections, and
delayed effective and compliance dates published at 80 FR 63703,
October 21, 2015, and 81 FR 49553, July 28, 2016.), and in the 2016
General Technical, Organizational, Conforming, and Correcting
Amendments to the Federal Motor Carrier Safety Regulations final
rule published at 81 FR 68336 (Oct. 4, 2016) many instances of the
terms ``regular route'' and ``irregular route,'' as well as
``common'' and ``contract'' were also removed. See also Elimination
of Route Designation Requirement for Motor Carriers Transporting
Passengers Over Regular Routes final rule published at 74 FR 2895
(Jan. 16, 2009).
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However, if carrier A hires carrier B to conduct a regular-route
passenger transportation service and at least one of the two carriers
does not have active operating authority registraton, then the lease
and interchange requirements of this final rule apply.
Out-of-Scope Comment
Greyhound, Coach USA, and Adirondack Trailways asked FMCSA (1) to
clarify that entities that lease buses or drivers and control their
operations to the extent of control exercised by FlixBus, OurBus, and
similar technology entities, are bound by the requirements of the rule;
and (2) to determine that the services of these entities make them
motor carriers ``providing motor vehicle transportation for
compensation''--not brokers--and subject them to the full range of
FMCSA regulations. They argue that there is undisputed evidence
FlixBus, OurBus, and similar entities should be subject to the 2018
NPRM and this final rule.
FlixBus, Inc. argued that the Agency should reject requests to make
it subject to the 2018 NPRM's proposed requirements and other FMCSA
regulations as a ``motor carrier.'' FlixBus claims it is a
transportation technology company that does not own, lease, or operate
passenger-carrying CMVs. It does not employ drivers. It provides a
consumer-facing platform travelers can use to purchase transportation
provided by one of its bus partners.
[[Page 40280]]
FlixBus also argues FMCSA should disregard the Greyhound, Coach
USA, and Adirondack Trailways requests because their comments are
beyond the scope of this rulemaking. FlixBus argues this rulemaking
addresses rules that will apply to motor carriers of passengers that
lease and interchange vehicles; it does not attempt to address which
entities are or should be regulated as ``motor carriers.''
``Petitioners cannot unilaterally expand the scope of this rulemaking
through their comments, nor are those comments entitled to a
substantive response.''
FMCSA Response
FMCSA agrees with FlixBus that this issue is outside the scope of
the 2018 NPRM. FMCSA reviewed FlixBus, OneBus, and other similar
operations. At the time, these operations were not found to be motor
carriers of passengers that lease or interchange vehicles. Thus,
FlixBus and OneBus are not required to comply with the terms of this
final rule. Changed operations or other business models may subject
companies to this rule.
Additional Out-of-Scope Comment
Adirondack Trailways requested that its businesses be exempt from
the marking requirements in Sec. 390.21(b)(3).
FMCSA Response
FMCSA did not propose any changes to Sec. 390.21(b)(3) and this
comment is thus outside the scope of the 2018 NPRM.
C. Examples of Final Rule Implementation
The following examples were published in the NPRM and remain
applicable to this final rule.
Complete Contract Transfer Example
Authorized carrier A is contracted to transport a tour or travel
group on a trip, but finds itself without the capacity to accommodate
the group. Carrier A completely transfers the contract to authorized
carrier B that has the necessary capacity. Carrier A may or may not pay
a fee to carrier B for taking over the contract. A complete transfer
would require carrier A to cancel its contract with the customer and
carrier B to create a new contract with the customer. The final rule
does not apply to these transactions because these transactions do not
qualify as a ``lease'' (or interchange), as defined in Sec. 390.5, of
a passenger-carrying CMV.
Complete Subcontracting Among Authorized Carriers
Authorized carrier A lacks the capacity to execute a contracted
trip and hires authorized carrier B to make the trip while maintaining
its contract with the customer. This arrangement is documented by a
charter contract between carriers A and B. Carrier A pays carrier B for
the trip. This arrangement is not a lease, first because carrier B is
not granting the use of a passenger-carrying CMV to carrier A, and
second because both carriers are authorized carriers. Instead, carrier
B is making the trip in its own name, on its own authority, with its
own vehicles and is therefore responsible for compliance with the
FMCSRs. This final rule therefore does not apply to this arrangement.
Partial Subcontracting Among Authorized Carriers
Assuming the same facts as described above, except that authorized
carrier A provides some of the transportation service while contracting
with authorized carrier B for the remainder, this arrangement is not a
lease, first because carrier B is not granting the use of a passenger-
carrying CMV to carrier A, and second because both carriers are
authorized carriers. Carrier A pays carrier B for the transportation
service as part of a charter contract. Carrier B is not surrendering
control of a passenger-carrying CMV to carrier A for its own use. Both
carriers are authorized carriers providing transportation in their own
name, on their own authority, with their own vehicles, and each is
independently responsible for compliance with the FMCSRs.
Subcontracting Among Regular Route Authorized Carriers
Authorized carrier A, which provides regular route passenger
transportation services according to a fixed schedule, finds itself
without the capacity to execute a route. Carrier A hires authorized
carrier B to continue this service. This arrangement is documented by a
charter contract between carriers A and B. Carrier A pays carrier B for
the transportation service. This arrangement is not a lease, first
because carrier B is not granting the use of a passenger-carrying CMV
to carrier A, and second because both carriers are authorized carriers.
This arrangement is also not an interchange because carriers A and B
are not conducting a through movement. The final rule does not apply to
this arrangement. Carrier B will conduct the transportation in its own
name, on its own authority, with its own vehicle(s), and is therefore
responsible for compliance with the FMCSRs.
Other Business Arrangements Between Passenger Carriers
Example 1
Carrier A is exempt under 49 U.S.C. 13506 from the requirement for
operating authority--for example, because of the hotel exemption in
section 13506(a)(3) \14\--but finds itself without the capacity to
accommodate a group that it originally intended to transport. When this
occurs, carrier A hires authorized carrier B to provide charter
passenger transportation of the group in whole or in part. This
arrangement is documented by a charter contract between carriers A and
B. Carrier A pays carrier B for the transportation service, but is not
a lessee of carrier B's vehicle. Therefore, this arrangement is not a
lease. Carrier B does not claim the exemption in section 13506(a)(3)
but conducts the transportation in its own name, on its own authority,
with its own vehicle(s) and is therefore responsible for compliance
with the FMCSRs. This final rule does not apply to this arrangement.
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\14\ Section 13506 lists the miscellaneous motor carrier
transportation exemptions. Under section 13506(a)(3), neither the
Secretary nor the Board has jurisdiction over a motor vehicle owned
or operated by or for hotel patrons between the hotel and the local
station of a carrier.
---------------------------------------------------------------------------
Example 2
Private motor carrier of passengers A finds itself without the
capacity to transport the members of its organization. Carrier A
therefore hires authorized carrier B to provide charter passenger
transportation of the group in whole or in part. This arrangement is
documented by a charter contract between carriers A and B. Carrier A
pays carrier B for the transportation service. Carrier A is not a
lessee and the arrangement is not a lease or interchange because
carrier B conducts the transportation in its own name, on its own
authority, with its own vehicle(s) and is therefore responsible for
compliance with the FMCSRs. The final rule does not apply to this
arrangement.
Example 3
Carrier A is an exempt for-hire motor carrier of passengers (under
49 U.S.C. 13506) that finds itself without the capacity to accommodate
a group it originally intended to transport. Carrier A uses a
passenger-carrying CMV owned by authorized carrier B. This transaction
is a lease under the final rule and is subject to its requirements
[[Page 40281]]
because carrier A is not authorized to operate for-hire in interstate
commerce. In this case, carrier B is a lessor that is surrendering
control of a passenger-carrying CMVs to carrier A for the use of that
carrier. Carrier A will conduct the transportation in its own name
under its own safety registration (i.e., USDOT number) with the CMV
leased from carrier B, with or without drivers provided by carrier B,
and is therefore responsible for compliance with the FMCSRs.
Example 4
Private motor carrier of passengers A finds itself without the
capacity to accommodate a group it originally intended to transport.
Carrier A uses a passenger-carrying CMV owned by authorized carrier B.
This transaction is a lease under this final rule and is subject to its
requirements because carrier A is not authorized to operate for-hire in
interstate commerce. In this case, carrier B is a lessor that is
surrendering control of a passenger-carrying CMVs to carrier A for the
use of that carrier. Carrier A will conduct the transportation in its
own name under its own safety registration (i.e., USDOT number) with
the CMV leased from carrier B, with or without drivers provided by
carrier B, and is therefore responsible for compliance with the
applicable FMCSRs.
Example 5
Authorized carrier A lacks the capacity to execute a contracted
trip and uses a passenger-carrying CMV owned by private motor carrier
of passengers, carrier B. This transaction is a lease under the final
rule and is subject to its requirements because private carrier B is
not authorized to operate for-hire in interstate commerce and cannot be
hired to provide transportation. In this case, carrier B is a lessor
that is surrendering control of its passenger-carrying CMV to carrier
A. Carrier A will conduct the transportation in its own name, under its
own authority, with the CMV leased from the private motor carrier of
passengers, with or without drivers provided by carrier B, and is
therefore responsible for compliance with the FMCSRs.
Example 6
Private motor carrier of passengers A finds itself without the
capacity to transport the members of its organization and uses a
passenger-carrying CMV owned by private motor carrier of passengers B.
This transaction is a lease under the final rule and is subject to the
requirements of this rule because neither carrier has the authority to
conduct for-hire operations in interstate commerce. In this case,
carrier B is a lessor that is surrendering control of its passenger-
carrying CMV to carrier A for the use of that carrier. Carrier A will
conduct the transportation in its own name, under its own safety
registration (i.e., USDOT number), with the CMV leased from carrier B,
with or without drivers provided by carrier B, and is therefore
responsible for compliance with the applicable FMCSRs.
Example 7
For-hire passenger carrier A had its operating authority revoked
for lack of adequate insurance coverage. Carrier A wishes to generate
revenue from its otherwise idle CMVs. It therefore negotiates an
arrangement with authorized carrier B to surrender control of its
passenger-carrying CMVs to carrier B for a fee. This arrangement is a
lease under the final rule and would be subject to its requirements
because carrier A is not authorized to operate for-hire in interstate
commerce. In this case, carrier A is simply a lessor. Carrier B would
conduct the transportation in its own name, under its own authority,
with the CMVs leased from carrier A, with or without drivers provided
by carrier A, and is therefore responsible for compliance with the
FMCSRs.
VI. 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.
VII. Section-By-Section Description of the Rule
A. Section 390.5 Definitions
Section 390.5 is amended to revise the definitions of lease,
lessee, and lessor and these terms apply specifically to motor carriers
of passengers.
B. Section 390.21 Marking of Self-Propelled CMVs and Intermodal
Equipment
Section 390.21 is returned nearly to the form before the May 27,
2015, final rule's effective date. In the paragraph (e) header, FMCSA
replaces ``Rented property-carrying commercial motor vehicles'' with
the phrase ``Rented CMVs and leased passenger-carrying CMVs.''
Throughout paragraph (e), the Agency adds the phrase ``or lease'' after
the term ``rental agreement.'' When referring to a ``renting motor
carrier,'' the Agency adds the phrase ``or lessee'' immediately after
it. In paragraph (e)(2)(iv), in addition to the cross reference to the
property-carrying leasing regulations in 49 CFR part 376, FMCSA adds a
cross reference to the passenger-carrying leasing regulations in
subpart G of part 390 so that the revised sentence reads ``See the
property-carrying leasing regulations at 49 CFR part 376 and the
passenger-carrying leasing regulations at subpart G of this part for
information that should be included in all leasing documents.'' FMCSA
adds paragraph (e)(2)(v)(A) to Sec. 390.21 to allow the passenger-
carrying CMV operating under the 48-hour emergency exception pursuant
to Sec. 390.403(a)(2) to be excepted from paragraphs Sec.
390.21(e)(2)(iii) and (iv), provided the lessor and lessee comply with
the requirements of the provision in Sec. 390.403(a)(2). FMCSA adds
Sec. 390.21(e)(2)(v)(B) to set a January 1, 2021, compliance date for
the paragraph (e) requirements for passenger-carrying CMVs subject to
the lease and interchange rules under subpart G (Sec. Sec. 390.401 and
390.403). This date is identical to the compliance date in Sec. Sec.
390.401 and 390.403.
FMCSA removes Sec. 390.21(f) and redesignates paragraphs (g) and
(h) as paragraphs (f) and (g), respectively, as they were on July 1,
2015.\15\
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\15\ See https://www.ecfr.gov/cgi-bin/text-idx?SID=b9ddca68b462ed0f3d5758839de97752&pitd=20150701&node=pt49.5.390&rgn=div5#se49.5.390_121 (accessed June 3, 2019).
---------------------------------------------------------------------------
C. Part 390, Subpart F Lease and Interchange of Passenger-Carrying
Commercial Motor Vehicles
Subpart F, including Sec. Sec. 390.300T, 390.301, 390.303, and
390.305, is removed and reserved.
D. Part 390, Subpart G Lease and Interchange of Passenger-Carrying
Commercial Motor Vehicles
Subpart G, consisting of Sec. Sec. 390.401 and 390.403, is added.
These sections include the applicability of the final rule, the two
general exceptions, the civil penalties for failure to meet applicable
requirements, and the requirements for every lease or interchange.
E. Section 390.401 Applicability
Paragraph (a) explains the general applicability of Subpart G. The
compliance date of this section is January 1, 2021.
Paragraph (b) provides two exceptions to the general rule.
Paragraph (b)(1) makes the rules in Sec. Sec. 390.401 and 390.403
inapplicable to contracts and
[[Page 40282]]
agreements between motor carriers of passengers that have active FMCSA
operating authority. This exception is applicable when one such motor
carrier acquires transportation service(s) from another such motor
carrier(s), whether those agreements are designated sub-charters, farm-
out charters, subcontracts, pooling agreements approved by the U.S.
Surface Transportation Board, or through-service \16\ agreements.
---------------------------------------------------------------------------
\16\ A through-service agreement involves a change in the
operating provider of the transportation at a specified boundary on
a regular schedule. This is usually accomplished at specific
locations where equipment, drivers, or motor carriers are changed.
---------------------------------------------------------------------------
Paragraph (b)(2) makes the rules in Sec. Sec. 390.401 and 390.403
inapplicable to Financial leases (however designated, e.g., lease,
closed-end lease, hire purchase, lease purchase, purchase agreement,
installment plan, demonstration or loaner vehicle, etc.) between a
motor carrier and a bank or similar financial organization or a
manufacturer or dealer of passenger-carrying CMVs. This provision
repromulgates the same section of the 2015 final rule.
Paragraph (c) provides that if the use of a passenger-carrying CMV
is arranged between motor carriers subject to both rules in Sec. Sec.
390.401 and 390.403 and either carrier fails to meet all applicable
requirements of subpart G, both motor carriers are subject to a civil
penalty.
F. Section 390.403 Lease and Interchange Requirements
Paragraph (a)(1) sets out the two instances in which a lease or
other agreement is required (and the lease or agreement must then meet
the conditions of paragraphs (b) and (c) of this section) beginning on
the compliance date of this rule, January 1, 2021. Paragraph (a)(2)
allows the delayed writing of a lease or agreement after an emergency,
such as a disabled vehicle, that disrupts or delays a trip, and, unlike
the previous rule, does not limit the exception to times when
passengers are on the bus.
Paragraph (b) specifies the four required items of any lease,
sublease, or interchange document required by this rule: (1) Vehicle
identification information; (2) Parties; (3) Specific duration; and (4)
Exclusive possession and responsibilities.
Paragraph (c) explains when a copy of the lease or agreement must
be on the passenger-carrying CMV and how long both the lessor and
lessee must retain copies of the lease or agreement.
VIII. Regulatory Analyses
A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563 (Improving
Regulation and Regulatory Review), and DOT Regulatory Policies and
Procedures
FMCSA performed an analysis of the impacts of the rule and
determined it is not a significant regulatory action under section 3(f)
of E.O. 12866 (58 FR 51735, October 4, 1993), Regulatory Planning and
Review, as supplemented by E.O. 13563 (76 FR 3821, January 21, 2011),
Improving Regulation and Regulatory Review. Accordingly, the Office of
Management and Budget (OMB) has not reviewed it under that Order. It is
also not significant within the meaning of DOT regulatory policies and
procedures (DOT Order 2100.5 dated May 22, 1980; 44 FR 11034 (February
26, 1979) \17\). This rule is not a major rule as defined under the
Congressional Review Act (5 U.S.C. 801-808).
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\17\ Although the recent DOT Order 2100.6 (Policies and
Procedures for Rulemakings) that was published December 20, 2018,
cancels and supersedes this DOT Order 2100.5, the newer DOT Order
2100.6 specifically notes that it ``does not apply to any rulemaking
in which a notice of proposed rulemaking was issued before the
effective date of this Order,'' which was December 20, 2018.
Therefore, because the NPRM for this final rule was published
September 20, 2018 (83 FR 47764), the newer DOT Order 2100.6 does
not apply and therefore is not cited here.
---------------------------------------------------------------------------
The Agency received eighteen comments on the 2018 NPRM. None
specifically addressed the regulatory analyses that were presented in
the NPRM. The only substantive change made to the regulatory evaluation
from the NPRM to this final rule is that the analysis time period has
been updated to reflect the December 4, 2018, extension of the
compliance date for the May 2015 final rule from January 1, 2019, to
January 1, 2021 (83 FR 62505). Because this rule revises the
regulations established in the 2015 final rule, that rule serves as the
baseline against which the effects of this rule are evaluated. When the
regulatory evaluation for the NPRM was performed, the compliance date
for the 2015 final rule was January 1, 2019, and therefore the analysis
period likewise began as of 2019. As noted, on December 4, 2018, the
Agency extended the compliance date for the 2015 final rule to January
1, 2021. Therefore, the analysis period for this rule now begins as of
2021. The primary result of this change is a less than 2 percent
increase in the annualized cost savings. This small increase is
primarily a reflection of the slightly larger number of passenger
carriers and CMV trips that experience regulatory relief in future
years under the new analysis time period, consistent with the modest
baseline annual industry growth rate projections used in the analysis.
As described earlier, the rule reduces the scope of the lease and
interchange requirements for motor carriers of passengers. Furthermore,
those passenger carriers and passenger-carrying CMV trips for which the
rule remains applicable are subject to lease and interchange
requirements that are reduced in comparison to those of the 2015 final
rule. At the same time, FMCSA believes that the lease and interchange
requirements of the rule still enable safety officials and the public
to sufficiently identify the passenger carrier responsible for safety
because each authorized for-hire motor carrier must conduct the
transportation in its own name, under its own authority, with its
owned, leased, or borrowed vehicles, and is therefore responsible for
compliance with the FMCSRs. Therefore, FMCSA estimates that the rule
results in a cost savings, but will not result in any change to safety
benefits.
The Agency estimates that the rule will result in a cost savings of
$76.5 million on an undiscounted basis, $67.7 million discounted at 3
percent, and $58.5 million discounted at 7 percent over the 10-year
analysis period, expressed in 2016 dollars. On an annualized basis,
this equates to a 10-year cost savings of $7.9 million at a 3 percent
discount rate and $8.3 million at a 7 percent discount rate.
Key Inputs to the Analysis
The rule revises regulations established in the 2015 final rule,
therefore the 2015 final rule serves as the baseline against which the
effects of this rule are evaluated. Many of the key inputs to this
analysis of the rule are based on the same data sources and methods as
those developed and used in the evaluation of the 2015 final rule, with
various updates made as needed to reflect more recently available data
and information. Therefore, a copy of the regulatory evaluation for the
2015 final rule is available in the docket for this final rule, and,
where applicable, the Agency cites that document in the analysis
below.\18\ The analysis of this final rule utilizes a 10-year analysis
period of 2021 to 2030, and all monetary values are expressed in 2016
dollars.
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\18\ U.S. Department of Transportation (DOT), FMCSA. ``Final
Rule. Lease and Interchange of Vehicles; Motor Carriers of
Passengers. Regulatory Evaluation.'' May 2015. Docket ID# FMCSA-
2012-0103-0022. Available at: https://www.regulations.gov/contentStreamer?documentId=FMCSA-2012-0103-0022&attachmentNumber=1&contentType=pdf (accessed June 3, 2019).
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[[Page 40283]]
Number of Passenger Carriers Experiencing Regulatory Relief Under the
Rule
The Agency estimates that an annual average of 8,366 motor carriers
of passengers will experience regulatory relief under the rule, as
discussed below. This represents the average over the 10-year analysis
period of the individual annual estimates of the total number of
passenger carriers experiencing regulatory relief under the rule, which
are presented in Table 2. As also shown in Table 2, the Agency
estimates that approximately 75 percent of this total number of
passenger carriers will experience full regulatory relief and are no
longer subject to the lease and interchange requirements for passenger-
carrying CMVs because of the rule. The remaining 25 percent of these
passenger carriers will experience partial regulatory relief and remain
subject to reduced lease and interchange requirements compared to those
of the 2015 final rule.
Table 2--Estimated Number of Passenger Carriers Experiencing Regulatory Relief Under the Rule
----------------------------------------------------------------------------------------------------------------
Passenger Total passenger
Passenger carriers carriers
carriers experiencing experiencing
Year experiencing full partial regulatory relief
regulatory relief regulatory relief under the rule
under the rule under the rule \(a)\
----------------------------------------------------------------------------------------------------------------
2021................................................... 6,035 2,012 8,046
2022................................................... 6,087 2,029 8,116
2023................................................... 6,139 2,046 8,186
2024................................................... 6,192 2,064 8,256
2025................................................... 6,246 2,082 8,328
2026................................................... 6,300 2,100 8,400
2027................................................... 6,354 2,118 8,472
2028................................................... 6,409 2,136 8,545
2029................................................... 6,464 2,155 8,619
2030................................................... 6,520 2,173 8,693
--------------------------------------------------------
Annual average..................................... 6,275 2,092 8,366
----------------------------------------------------------------------------------------------------------------
Notes:
\(a)\ Values may not equal the sum of the components due to rounding.
To derive the estimates presented in Table 2 of the number of
passenger carriers experiencing regulatory relief under the rule, FMCSA
first estimated the number of passenger carriers that, in the absence
of the rule, would be affected by the lease and interchange
requirements of the 2015 final rule. This estimate is based on the same
data sources and methods as those developed and used in the evaluation
of the 2015 final rule \19\ but updated to reflect more recently
available data and information. The Agency used data from the FMCSA
Motor Carrier Management Information System (MCMIS) and the FMCSA
Licensing and Insurance (L&I) system to develop a new baseline value
for the reported number of all active interstate passenger carriers
operating in the U.S. as of the end of calendar year 2017, namely
13,386 carriers.20 21
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\19\ Further details regarding the specific data sources and
methods can be found in U.S. DOT, FMCSA, ``Final Rule. Lease and
Interchange of Vehicles; Motor Carriers of Passengers. Regulatory
Evaluation.'' May 2015. Pages 9 to 12.
\20\ U.S. DOT, FMCSA. Motor Carrier Management Information
System (MCMIS), and Licensing and Insurance (L&I) system. Snapshots
as of December 29, 2017 (Data Analysis and Reports Team (DART)
request ID # 38883).
\21\ The total number of 13,386 passenger carriers as of the end
of 2017 represents 11,705 unique carriers, because some carriers
provide passenger service in more than one of the operation
classifications shown. Consistent with the approach used in the
regulatory evaluation for the May 2015 final rule, the larger number
was used here to not risk underestimating the number of affected
passenger carriers and the corresponding cost of the lease and
interchange requirements of the May 2015 final rule.
---------------------------------------------------------------------------
Of this total population, the Agency estimates that, in the absence
of this rule, 7,774 of these passenger carriers would be subject to the
May 2015 final rule. This estimate is based on the same methods as
those developed and used in the evaluation of the 2015 final rule, and
assumes that under that rule 100 percent of authorized for-hire
carriers, 100 percent of exempt for-hire carriers, and 10 percent of
private passenger carriers would be subject to the lease and
interchange requirements for passenger-carrying CMVs.\22\
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\22\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Pages 9 to 12.
Table 3--Reported Number of Active Interstate Passenger Carriers Operating in the U.S. (as of December 29, 2017)
and Estimated Number That Would Be Subject to the May 2015 Final Rule in the Absence of the Rule
----------------------------------------------------------------------------------------------------------------
Number (and percent) estimated to be subject to
Type of passenger carrier operation Total number the May 2015 final rule in the absence of the
of carriers rule
----------------------------------------------------------------------------------------------------------------
Authorized For-Hire \(a)\.................... 6,629 6,629 (100% of total).
Exempt For-Hire (9+) \(b)\................... 340 340 (100% of total).
Exempt For-Hire (16+) \(c)\.................. 181 181 (100% of total).
Private (business) \(d)\..................... 2,599 260 (10% of total).
[[Page 40284]]
Private (non-business) \(e)\................. 3,637 364 (10% of total).
------------------------------------------------------------------
Total \(f)\.............................. 13,386 7,774.
----------------------------------------------------------------------------------------------------------------
Notes:
\(a)\ A commercial entity whose primary business activity is the transportation of passengers by motor vehicle
for compensation.
\(b)\ A for-hire entity that is exempt under 49 U.S.C. 13506, and operates at least one passenger vehicle
designed or used to accommodate 9 or more passengers including the driver.
\(c)\ A for-hire entity that is exempt under 49 U.S.C. 13506, and operates at least one passenger vehicle
designed or used to accommodate 16 or more passengers including the driver.
\(d)\ A private entity engaged in the interstate transportation of passengers which is provided in the
furtherance of a commercial enterprise and is not available to the public at large.
\(e)\ A private entity involved in the interstate transportation of passengers that does not otherwise meet the
definition of a ``private (business)'' motor carrier of passengers as noted above.
\(f)\ The total number of 13,386 passenger carriers shown represents 11,705 unique carriers, because some
carriers provide passenger service in more than one of the operation classifications shown. Consistent with
the approach used in the regulatory evaluation for the May 2015 final rule, the larger number was used here to
not risk underestimating the number of affected passenger carriers and the corresponding cost of the lease and
interchange requirements of the May 2015 final rule.
The 2017 value of 7,774 passenger carriers that would be subject to
the 2015 final rule was then used as the basis to develop future
projections over the 2021 to 2030 analysis period. The Agency developed
these projections by increasing the baseline 2017 value of 7,774
passenger carriers consistent with the occupation-specific employment
growth projections for Standard Occupational Classification (SOC) Code
53-3021 (Bus drivers, transit and intercity) obtained from the U.S
Department of Labor (DOL) Bureau of Labor Statistics (BLS) Employment
Projections Program which, from 2016 to 2026, is forecast to grow by
0.86 percent annually.\23\ This results in a projection of the number
of passenger carriers that, in the absence of this rule, would be
subject to the 2015 rule each year over the 2021 to 2030 analysis
period. In the absence of the rule, these passenger carriers would be
subject to the 2015 rule. As discussed earlier, under the rule a large
portion of these passenger carriers will no longer be subject to lease
and interchange requirements, and the remaining carriers will be
subject to reduced requirements. In Table 2, the column on the far
right shows the projected number of passenger carriers that will
experience regulatory relief under the rule over the 10-year analysis
period of 2021 to 2030, which equals an annual average of 8,366
passenger carriers.
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\23\ U.S. DOL BLS. ``Occupational Employment Projections. Table
1.2: Employment by detailed occupation, 2016 and projected 2026.''
Available at: https://www.bls.gov/emp/ep_data_occupational_data.htm
(accessed June 3, 2019).
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Table 2 also shows the subset of those 8,366 passenger carriers
that under the rule will experience full regulatory relief and will no
longer be subject to lease and interchange requirements. Over the 10-
year analysis period, the Agency estimates that an annual average of
6,275 passenger carriers, or approximately 75 percent of the total
number of carriers that will experience regulatory relief, will
experience full regulatory relief. The Agency estimated this value by
assuming that approximately 10 percent of authorized for-hire carriers
will be subject to the lease and interchange requirements under this
rule, rather than 100 percent as assumed previously under the 2015
final rule and as shown in Table 3.
For exempt for-hire carriers and private passenger carriers, the
analysis assumes that 100 percent and 10 percent, respectively, of
these carriers will continue to be subject to the lease and interchange
requirements under the rule, the same percentages as under the 2015
final rule and as shown in Table 3. Combined, these changes result in
an estimated overall reduction of approximately 75 percent in the
number of passenger carriers subject to lease and interchange
requirements under the rule.\24\ This reduction is consistent with the
comments and petitions for reconsideration that the Agency received, a
number of which suggested that the scope of the 2015 final rule likely
encompassed a relatively large proportion of passenger-carrying CMV
trips in which both the lessor and the lessee were authorized carriers.
Petitioners generally argued that such carriers should not be subject
to lease and interchange requirements.
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\24\ As shown in Table 3, in 2017 an estimated 7,774 passenger
carriers would be subject to the lease and interchange requirements
of passenger-carrying CMVs under the May 2015 final rule. Under this
rule, as noted, the analysis assumes that only 10 percent of
authorized for-hire carriers will be subject to the lease and
interchange requirements of passenger-carrying CMVs, or 10 percent
of 6,629, which equals 663 authorized for-hire passenger carriers.
The analysis also assumes that 100 percent of exempt for-hire
carriers and 10 percent of private passenger carriers will continue
to be subject to the lease and interchange requirements for
passenger-carrying CMVs under the rule, which equals 100 percent of
340 and 181 exempt for-hire carriers (totaling 521 exempt for-hire
carriers), and 10 percent of 2,599 and 3,637 private carriers
(totaling 624 private carriers). Therefore, the Agency estimates
that 1,808 passenger carriers will be subject to the lease and
interchange requirements of passenger-carrying CMVs in 2017 under
this final rule, or 23.3 percent of those subject to the
requirements under the 2015 final rule, which is rounded to 25
percent for purposes of developing the future projections of
affected passenger carriers presented in Table 2. Therefore, as a
consequence of this final rule, there will be a 75 percent reduction
in the number of passenger carriers subject to lease and interchange
requirements.
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Finally, Table 2 also presents an estimate of the remaining subset
of the annual average of 8,366 passenger carriers that will experience
partial regulatory relief and remain subject to reduced lease and
interchange requirements compared to those of the 2015 rule. Over the
10-year analysis period, the Agency estimates that an annual average of
2,092 passenger carriers, or approximately 25 percent of the total,
will experience partial regulatory relief. As noted earlier, however,
these carriers will be subject to reduced requirements compared to
those of the 2015 final rule.
[[Page 40285]]
Number of CMV Trips Experiencing Regulatory Relief Under the Rule
The Agency estimates that an annual average of 547,034 passenger-
carrying CMV trips will experience regulatory relief under the rule
over the 10-year analysis period, as presented in Table 4 and discussed
below. This estimate is based on the same methods as those developed
and used in the evaluation of the 2015 final rule.\25\ The estimated
number of passenger carriers that will experience regulatory relief
under the rule (see Table 2) serves as the primary basis for the
estimate of the number of trips that will experience regulatory relief
under the rule. For each of the carriers in Table 2, the Agency assumed
an estimated average of 64 trips per year would be operated with
vehicles that would be considered leased or interchanged vehicles under
the 2015 final rule. This is consistent with the assumptions used in
the regulatory evaluation for the 2015 final rule.\26\ The estimated
number of trips that will experience regulatory relief under the rule
(see Table 4) also incorporates a modest upward adjustment to reflect
an annual average of 11,400 trips operated by Greyhound, one of the
largest U.S. interstate passenger carriers. This adjustment is
consistent with the methods used in the evaluation of the 2015 final
rule,\27\ and is based on data that Greyhound provided to FMCSA
regarding trips with leased and interchanged vehicles in 2012.\28\
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\25\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Page 21, Table 6.
\26\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Page 21, Table 6.
\27\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Pages 12 to 13.
\28\ ``Lease and Interchange of Vehicles; Motor Carriers of
Passengers. NPRM.'' September 20, 2013. Comments of Greyhound Lines,
Inc., Docket ID number FMCSA-2012-0103-0010. Page 2. November 12,
2013. Available at: https://www.regulations.gov/contentStreamer?documentId=FMCSA-2012-0103-0010&attachmentNumber=1&contentType=pdf (accessed June 3, 2019).
Greyhound reported 10,263 passenger-carrying CMV trips performed in
2012 by vehicles leased and interchanged. This 2012 value was then
adjusted to reflect observed industry growth from 2012 to 2016 as
represented by growth in employment for SOC Code 53-3021 (Bus
drivers, transit and intercity), and then further adjusted to
reflect employment growth projections for SOC Code 53-3021 (Bus
drivers, transit and intercity).
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The Agency estimates that approximately 75 percent of these
passenger-carrying CMV trips will experience full regulatory relief and
will no longer be subject to the lease and interchange requirements of
the 2015 final rule. The remaining 25 percent of these trips will
experience partial regulatory relief and remain subject to reduced
lease and interchange requirements compared to those of the 2015 final
rule.
Table 4--Estimated Number of Passenger-Carrying CMV Trips Experiencing Regulatory Relief Under the Rule
----------------------------------------------------------------------------------------------------------------
Passenger-
Passenger- carrying CMV
carrying CMV trips Total CMV trips
trips experiencing experiencing
Year experiencing partial regulatory
full regulatory regulatory relief under the
relief under the relief under the rule (a)
rule rule
----------------------------------------------------------------------------------------------------------------
2021................................................... 394,583 131,528 526,111
2022................................................... 397,990 132,663 530,654
2023................................................... 401,427 133,809 535,237
2024................................................... 404,894 134,965 539,859
2025................................................... 408,391 136,130 544,521
2026................................................... 411,918 137,306 549,224
2027................................................... 415,475 138,492 553,967
2028................................................... 419,063 139,688 558,751
2029................................................... 422,682 140,894 563,576
2030................................................... 426,332 142,111 568,443
--------------------------------------------------------
Annual average..................................... 410,276 136,759 547,034
----------------------------------------------------------------------------------------------------------------
Notes:
\(a)\ Values may not equal the sum of the components due to rounding.
Other Key Inputs to the Analysis
The opportunity cost of the time employees of passenger carriers
spend complying with the lease and interchange requirements represents
approximately 95 percent of the total cost of the 2015 final rule. The
cost savings from this rule are likewise heavily influenced by
aggregate changes in the opportunity cost of employee time.
The Agency evaluates changes in employee opportunity cost by using
their labor costs. Labor costs comprise wages, fringe benefits, and
overhead. Fringe benefits include paid leave, bonuses and overtime pay,
health and other types of insurance, retirement plans, and legally
required benefits (Social Security, Medicare, unemployment insurance,
and workers' compensation insurance). Overhead includes any expenses to
a firm associated with labor that are not part of employees'
compensation, and typically includes many types of fixed costs of
managing a body of employees, such as management and human resource
staff salaries or payroll services. The economic costs of labor to a
firm, in this case a passenger carrier, include all forms of
compensation and labor related expenses. For this regulatory
evaluation, the costs of labor to the firm are calculated to include
base wages and fringe benefits, plus overhead.
For the regulatory evaluation of both the 2015 final rule and this
rule, the median hourly base wage rate for the BLS SOC code 53-1031,
``First-Line Supervisors of Transportation and Material-Moving Machine
and Vehicle Operators,'' is used as the basis for calculating the
relevant cost of labor. For 2016, BLS reports an hourly base
[[Page 40286]]
wage rate of $27.54 for this occupation.\29\
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\29\ U.S. DOL BLS. ``Occupational Employment Statistics (OES).
National.'' May 2016. March 31, 2017. Available at: https://www.bls.gov/oes/special.requests/oesm16nat.zip (accessed June 3,
2019). The May 2017 BLS OES published in March 2018 did not report
data for this BLS SOC code 53-1031. Therefore, the May 2016 data
used in the analysis for the NPRM is used again here in the analysis
for this final rule.
---------------------------------------------------------------------------
BLS does not publish data on fringe benefits for specific
occupations, but it does do so for broad industry groups in its
Employer Costs for Employee Compensation (ECEC) publication. A fringe
benefit rate of 57 percent (i.e., equal to 57 percent of the base wage
rate) is used. This is based on information from the June 2016 BLS ECEC
data, which for the ``Transportation and warehousing'' segment of
private industry reports a benefits cost of $14.09 per hour worked,
which represents 57 percent of wages and salaries in that industry
segment of $24.73 per hour.\30\
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\30\ U.S. DOL BLS. ``Table 10: Employer costs per hour worked
for employee compensation and costs as a percent of total
compensation: Private industry workers, by industry group, June
2016.'' Available at: https://www.bls.gov/news.release/archives/ecec_09082016.pdf (accessed June 3, 2019).
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Finally, for estimating overhead rates, the Agency used industry
data gathered for the Truck Costing Model developed by the Upper Great
Plains Transportation Institute, North Dakota State University.\31\
Research conducted for this model found an average cost of $0.107 per
mile of CMV operation for management and overhead, and $0.39 per mile
for labor, indicating an overhead rate of 27 percent (27% = $0.107 /
$0.39 (rounded to the nearest whole percent)).
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\31\ Berwick, Farooq. ``Truck Costing Model for Transportation
Managers.'' North Dakota State University. Upper Great Plains
Transportation Institute. August 2003. Appendix A, pp. 42-47.
Available at: http://www.mountain-plains.org/pubs/pdf/MPC03-152.pdf
(accessed June 3, 2019).
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Combined, the overall relevant cost of labor, including base wage
rate, fringe benefits, and overhead, for passenger carriers that will
experience regulatory relief under the rule is $54.91 per hour.
Costs
The rule will not result in any increase in costs. It revises the
2015 final rule, which serves as the baseline against which the effects
of this rule are evaluated. Absent this rule, the Agency estimates that
the baseline costs of the 2015 final rule over the 10-year analysis
period of 2021 to 2030 would be $10.6 million on an annualized basis at
a 7 percent discount rate, expressed in 2016 dollars.\32\ As noted
earlier, the Agency estimates that the rule will result in a cost
savings of $8.3 million at a 7 percent discount rate relative to the
2015 baseline, representing a 79 percent overall reduction in cost.
---------------------------------------------------------------------------
\32\ This annualized cost estimate of $10.6 million differs
somewhat from the value of $8.0 million that was presented in the
regulatory evaluation for the 2015 final rule primarily due to
various real and nominal updates made to reflect more recently
available data and information, as well as the different time frames
covered by the 10-year analysis period for each respective analysis
(previously 2017 to 2026, and now 2021 to 2030).
---------------------------------------------------------------------------
The estimated reduction of approximately 75 percent in the number
of passenger carriers and CMV trips under the rule is responsible for
most of the annualized cost savings. The remaining cost savings are the
result of reduced requirements for those approximately 25 percent of
passenger carriers and CMV trips that will remain subject to the lease
and interchange rules.
Under both the 2015 rule and this rule, costs are organized into
six major categories. Five are related to the requirements under Sec.
390.303 of the 2015 rule, and include: One-time costs of lease
negotiation; lease documentation costs; lease copying costs; lease
receipt costs; and vehicle marking costs. The sixth cost category is
related to the charter party notification requirement under Sec.
390.305 of the 2015 rule.
One-time costs of lease negotiation under this rule are calculated
based on the number of CMV trips that will experience regulatory relief
under the rule for this cost category, the time expended by employees
in negotiating the lease and developing the lease document, and the
total labor cost of these employees. The number of trips that will
experience regulatory relief under the rule for this cost category are
the trips that will no longer be subject to the lease and interchange
requirements. As presented earlier in Table 4, the Agency estimates
that an annual average of 410,276 passenger-carrying CMV trips will no
longer be subject to the lease and interchange requirements. Consistent
with the approach used in the 2015 regulatory evaluation, for each of
these trips it is assumed that 30 minutes of employee time is saved,
for both the lessor and the lessee, for a total time savings of one
hour for each such trip.\33\ This savings is valued at the total labor
cost of $54.91 per hour, described earlier. The resulting savings in
one-time costs of lease negotiation under the rule will be $21.7
million on an undiscounted basis over the 10-year analysis period, and
$2.9 million on an annualized basis at a 7 percent discount rate. For
the remaining passenger carriers and passenger-carrying CMV trips that
are still subject to the leasing and interchange requirements, the
provision in Sec. 390.303(b)(5), that the lease contain a statement
that the lessee is responsible for compliance with the insurance
requirements of 49 CFR part 387, is removed. Although in theory this
change may result in a modest incremental reduction in the amount of
time passenger carrier employees expend in negotiating the lease and
developing the lease document for carriers still subject to the leasing
and interchange requirements, there is no empirical basis upon which to
estimate such a possible impact. Therefore, the Agency has chosen not
to make any such incremental reduction in its analysis. Also, not
quantifying such a potential impact is a conservative approach that
helps to avoid overestimating the cost savings of the rule.
---------------------------------------------------------------------------
\33\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Pages 16 to 17.
---------------------------------------------------------------------------
Lease documentation costs under the rule are calculated based on
the number of CMV trips that will experience regulatory relief under
the rule for this cost category, the time spent by carrier employees
verifying the information and signing the lease, and the total labor
cost of these employees. The number of trips that will experience
regulatory relief under the rule for this cost category are the same as
above, an annual average of 410,276 trips that will no longer be
subject to the lease and interchange requirements. Consistent with the
2015 regulatory evaluation, for each trip that will experience
regulatory relief under the rule for this cost category this analysis
assumes that both the lessor and the lessee save 5 minutes of employee
time, for a total savings of 10 minutes for each such trip.\34\ This is
valued at the total labor cost of $54.91 per hour. The resulting
savings in lease documentation costs under the rule will be $37.6
million on an undiscounted basis over the 10-year analysis period, and
$3.7 million on an annualized basis at a 7 percent discount rate.
---------------------------------------------------------------------------
\34\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Page 17.
---------------------------------------------------------------------------
Lease copying cost savings under the rule are calculated based on
the number of CMV trips that will experience regulatory relief under
the rule for this cost category, and an estimated cost per copy. The
number of trips that will experience regulatory relief under the rule
for this cost category are the same as above, an annual average of
410,276
[[Page 40287]]
such trips. As in the 2015 regulatory evaluation, it assumed that for
each trip one copy of the lease is made for the lessor and another for
the lessee, each at a cost of $0.15, for a total cost of $0.30 per
trip.\35\ The resulting lease copying cost savings under the rule will
be $1.2 million on an undiscounted basis over the 10-year analysis
period, and $0.123 million on an annualized basis at a 7 percent
discount rate.
---------------------------------------------------------------------------
\35\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Page 17.
---------------------------------------------------------------------------
The remaining three cost categories (lease receipts, vehicle
marking, and charter party notification) will be eliminated for all
passenger carriers and passenger-carrying trips, including those that
would still be subject to the lease and interchange requirements under
the rule.
Lease receipt cost savings under the rule are calculated based on
the number of CMV trips that will experience regulatory relief under
the rule for this cost category, with two receipts assumed per trip
(one for obtaining, the other for surrendering, the vehicle), and both
the lessor and lessee requiring copies of each, for a total of four
receipts per trip. Because the rule will remove the receipt provision
in its entirety, the cost savings will apply to all trips listed in
Table 4, an annual average of 547,034 trips. Consistent with the 2015
regulatory evaluation, each receipt is assumed to cost $0.15, with four
receipts required for a total of $0.60 per trip.\36\ The resulting
lease receipt cost savings under the rule will be $3.3 million on an
undiscounted basis over the 10-year analysis period, and $0.327 million
on an annualized basis at a 7 percent discount rate.
---------------------------------------------------------------------------
\36\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Pages 17 to 18.
---------------------------------------------------------------------------
Vehicle marking cost savings under the rule are calculated based on
the number of CMV trips that will experience regulatory relief under
the rule for this cost category, and marking costs per vehicle that
include two sheets of letter size paper per trip at $0.014 per sheet,
plus $0.04 for adhesive tape. Because the rule will remove the marking
provision in its entirety, the cost savings will apply to all trips
listed in Table 4, an annual average of 547,034 trips. The resulting
vehicle marking cost savings under the rule will be $0.361 million on
an undiscounted basis over the 10-year analysis period, and $0.036
million on an annualized basis at a 7 percent discount rate.
Charter party notification cost savings under the rule are
calculated based on the number of CMV trips that will experience
regulatory relief under the rule for this cost category, and an
estimated expenditure by passenger carrier employees of 5 minutes per
notification.\37\ Because the rule will remove the notification
provision in its entirety, the resulting cost savings will apply to all
trips in which notification would otherwise have been necessary, which
are assumed to be 50 percent of the total annual average of 547,034
passenger-carrying CMV trips listed in Table 4.\38\ The resulting
savings in charter party notification costs under the rule will be
$12.4 million on an undiscounted basis over the 10-year analysis
period, and $1.23 million on an annualized basis at a 7 percent
discount rate.
---------------------------------------------------------------------------
\37\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Pages 24 to 26.
\38\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Pages 24 to 26.
---------------------------------------------------------------------------
In summary, and as presented in Table 5, the Agency estimates that
the rule will result in a cost savings of $76.5 million on an
undiscounted basis, $67.7 million discounted at 3 percent, and $58.5
million discounted at 7 percent over the 10-year analysis period,
expressed in 2016 dollars. On an annualized basis, this equates to a
10-year cost savings of $7.9 million at a 3 percent discount rate and
$8.3 million at a 7 percent discount rate.
Table 5--Total Cost of the Rule
[In thousands of 2016]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undiscounted Discounted
----------------------------------------------------------------------------------------------------------------
Lease and interchange costs
-------------------------------------------------
Year Lease Charter party
Lease documentation, notification Total cost Discounted at Discounted at
negotiation copying, and Vehicle costs \(b)\ 3% 7%
costs \(a)\ lease receipt marking costs
costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021................................... ($21,667) ($4,045) ($35) ($1,189) ($26,936) ($26,152) ($25,174)
2022................................... 0 (4,079) (35) (1,199) (5,315) (5,009) (4,642)
2023................................... 0 (4,115) (35) (1,210) (5,360) (4,906) (4,376)
2024................................... 0 (4,151) (36) (1,220) (5,407) (4,804) (4,125)
2025................................... 0 (4,188) (36) (1,231) (5,453) (4,704) (3,888)
2026................................... 0 (4,224) (36) (1,241) (5,500) (4,607) (3,665)
2027................................... 0 (4,259) (37) (1,252) (5,548) (4,511) (3,455)
2028................................... 0 (4,296) (37) (1,263) (5,596) (4,417) (3,257)
2029................................... 0 (4,333) (37) (1,274) (5,644) (4,326) (3,070)
2030................................... 0 (4,371) (38) (1,285) (5,693) (4,236) (2,894)
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Total.............................. (21,667) (42,061) (361) (12,363) (76,453) (67,672) (58,546)
Annualized............................. .............. ............... .............. .............. (7,645) (7,933) (8,336)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\(a)\ Values shown in parentheses are negative values (i.e., less than zero) and represent a decrease in cost or a cost savings.
\(b)\ Total cost values may not equal the sum of the components due to rounding. (The totals shown in this column are the rounded sum of unrounded
components.)
[[Page 40288]]
Benefits
The regulatory evaluation for the 2015 final rule attempted to
estimate the potential safety benefits of lease and interchange
requirements,\39\ but there were insufficient data and empirical
evidence to demonstrate a measurable quantitative relationship between
lease and interchange requirements and improved safety outcomes, such
as reduced frequency and/or severity of crashes or reduced frequency of
violations. Therefore, FMCSA followed the guidance of the Office of
Management and Budget (OMB) in its Circular A-4 and performed a
threshold analysis.\40\ Also referred to as a break-even analysis, a
threshold analysis attempts to determine the amount of safety benefits
(e.g., reduced crashes and corresponding reductions in fatalities,
injuries, and property damage) that would need to occur as a
consequence of a rule in order for the rule to yield zero net benefits
(i.e., for the benefits of the rule to equal, or exactly to offset, the
estimated costs of the rule).
---------------------------------------------------------------------------
\39\ U.S. DOT, FMCSA. ``Final Rule. Lease and Interchange of
Vehicles; Motor Carriers of Passengers. Regulatory Evaluation.'' May
2015. Page 35 to 36.
\40\ OMB. ``Circular A-4. Regulatory Analysis.'' September 17,
2003. Available at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf (accessed June 3, 2019).
---------------------------------------------------------------------------
The problem of insufficient data and empirical evidence noted in
2015 is still present today. Unlike regulations dealing with vehicle
equipment or driver behaviors that can be clearly linked to reduced
crashes and improved safety, both the 2015 final rule and this rule
affect safety less directly and immediately. Lease and interchange
requirements for motor carriers of passengers improve the ability of
the Agency to attribute the inspection, compliance, enforcement, and
safety data collected by the Agency and its State partners to the
correct motor carrier and driver, allowing FMCSA to more accurately
identify unsafe carriers and initiate appropriate interventions. FMCSA
believes that this rule will be a less costly and burdensome regulatory
approach than the 2015 final rule, yet will still enable safety
officials and the public to sufficiently identify the passenger carrier
responsible for safety because each authorized for-hire motor carrier
must conduct the transportation in its own name, under its own
authority, with its owned, leased, or borrowed vehicles, and is
therefore responsible for compliance with the FMCSRs. Therefore, the
Agency does not anticipate any change to safety benefits because of the
rule.
B. E.O. 13771 (Reducing Regulation and Controlling Regulatory
Costs)
Executive Order 13771, Reducing Regulation and Controlling
Regulatory Costs, was issued on January 30, 2017 (82 FR 9339, Feb. 3,
2017). E.O. 13771 requires that for every one new regulation issued by
an Agency, at least two prior regulations be identified for
elimination, and that the cost of planned regulations be prudently
managed and controlled through a budgeting process.\41\ Final
implementation guidance addressing the requirements of E.O. 13771 was
issued by the Office of Management and Budget (OMB) on April 5,
2017.\42\ The OMB guidance defines what is an E.O. 13771 regulatory
action and what is an E.O. 13771 deregulatory action, provides
procedures for how agencies should account for the costs and cost
savings of such actions, and outlines various other details regarding
implementation of E.O. 13771.
---------------------------------------------------------------------------
\41\ Executive Office of the President. ``Executive Order 13771
of January 30, 2017. Reducing Regulation and Controlling Regulatory
Costs.'' 82 FR 9339. Feb. 3, 2017. Section 1 (Purpose).
\42\ Executive Office of the President. Office of Management and
Budget. ``Memorandum M-17-21. Guidance Implementing Executive Order
13771.'' April 5, 2017.
---------------------------------------------------------------------------
This final rule has total costs less than zero, and is therefore an
E.O. 13771 deregulatory action.\43\ The present value of the cost
savings of this rule, measured on an infinite time horizon at a 7
percent discount rate, expressed in 2016 dollars, and discounted to
2021 (the year that cost savings would first be realized), is $104.4
million. On an annualized basis, these cost savings are $7.3 million.
---------------------------------------------------------------------------
\43\ Executive Office of the President. Office of Management and
Budget. ``Memorandum M-17-21. Guidance Implementing Executive Order
13771.'' April 5, 2017. Q4 on page 4.
---------------------------------------------------------------------------
For the purpose of E.O. 13771 accounting, the April 5, 2017, OMB
guidance requires that agencies also calculate the costs and cost
savings discounted to year 2016.\44\ In accordance with this
requirement, the present value of the cost savings of this rule,
measured on an infinite time horizon at a 7 percent discount rate,
expressed in 2016 dollars, and discounted to 2016, is $74.4 million. On
an annualized basis, these cost savings are $5.2 million.
---------------------------------------------------------------------------
\44\ Executive Office of the President. Office of Management and
Budget. ``Memorandum M-17-21. Guidance Implementing Executive Order
13771.'' April 5, 2017. Q25 on page 11.
---------------------------------------------------------------------------
C. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et
seq.), as amended by the Small Business Regulatory Enforcement Fairness
Act of 1996 (SBREFA) (Pub. L. 104-121, 110 Stat. 857), 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.\45\ Accordingly, DOT policy requires an
analysis of the impact of all regulations on small entities, and
mandates that agencies strive to lessen any adverse effects on these
entities. 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.
---------------------------------------------------------------------------
\45\ Regulatory Flexibility Act, Public Law 96-354, 94 Stat.
1164 (codified at 5 U.S.C. 601 et seq.).
---------------------------------------------------------------------------
In the 2018 NPRM, in lieu of preparing an Initial Regulatory
Flexibility Analysis under section 603(a) of the RFA to assess the
impact of the rule, FMCSA performed a certification analysis under
section 605(b) of the RFA. The threshold economic analysis that was
performed determined that, although the rule will have an impact on a
substantial number of small entities, the impact on these small
entities will not be significant, and furthermore will be entirely
beneficial. Therefore, FMCSA certified that the rule will not have a
significant economic impact on a substantial number of small entities.
The Agency received eighteen comments on the 2018 NPRM, eight of
which were from motor carriers of passengers that are classified as
small entities.\46\ All eight of these small entities expressed support
for the 2018 NPRM. None of them, nor any of the other submissions
received to the 2018 NPRM, specifically commented on the certification
or its underlying threshold economic analysis that were presented in
the NPRM. The Chief Counsel for Advocacy of the Small Business
[[Page 40289]]
Administration did not file comments in response to the proposed rule.
---------------------------------------------------------------------------
\46\ The eight motor carriers of passengers classified as small
entities that submitted comments to the 2018 NPRM include Adirondack
Trailways, Annett Bus Lines, Southern Tier Stages, Inc., Plymouth &
Brockton Street Railway Company, DeCamp Bus Lines, Burlington
Trailways, Pacific Coachways Charter Services, Inc., and Thielen Bus
Lines (the comment from Thielen Bus Lines (Docket ID# FMCSA-2012-
0103-0162) was also submitted in representation of the more than 30
other passenger carriers that comprise the membership of the
Minnesota Charter Bus Operators Association (MCBOA)).
---------------------------------------------------------------------------
As noted earlier in the Regulatory Analyses section, the only
substantive change made to the regulatory evaluation from the NPRM to
this final rule is that the analysis time period has been updated to
reflect the December 4, 2018, extension of the compliance date for the
May 2015 final rule from January 1, 2019, to January 1, 2021 (83 FR
62505). Because this rule revises the regulations established in the
2015 final rule, the 2015 final rule serves as the baseline against
which the effects of this rule are evaluated. Therefore, the analysis
period for this rule now begins as of 2021. As noted earlier in the
Regulatory Analyses section, the primary result of this change in the
analysis time period is a less than 2 percent increase in the
annualized cost savings from this rule. This result has no substantive
impact upon the certification or its underlying threshold economic
analysis that were presented in the NPRM. Therefore, as also determined
in the 2018 NPRM, although FMCSA determines that this rule will have an
impact on a substantial number of small entities, the Agency determines
that the impact on these small entities will not be significant.
Therefore, there is no change to the Agency's certification that this
final rule will not have a significant economic impact on a substantial
number of small entities. The threshold economic analysis is presented
again below, now incorporating modest revisions where necessary
resulting from the change in the analysis period, to again clearly
demonstrate the Agency's reasoning and assumptions underlying its
certification.
This rule will not result in any increase in costs or any increase
in burden. The rule will reduce the applicability of the lease and
interchange requirements for motor carriers of passengers, resulting in
a substantial reduction in the number of entities that will be subject
to these requirements, and a commensurate reduction in costs and burden
experienced by these entities. Furthermore, for those motor carriers of
passengers that will continue to be subject to the lease and
interchange requirements under the rule, the requirements will be
reduced in comparison to the existing requirements. This will also
result in a reduction in costs and burden experienced by these
entities.
The regulated entities that will experience regulatory relief under
this rule include all the passenger carriers that are subject to the
existing lease and interchange requirements. Approximately 75 percent
of this total number of passenger carriers will experience full
regulatory relief, and will no longer be subject to lease and
interchange requirements. The remaining 25 percent of these passenger
carriers will experience partial regulatory relief and remain subject
to reduced lease and interchange requirements compared to those of the
2015 final rule.
As presented earlier in Table 3 of the Regulatory Analyses section,
as of 2017 there were an estimated 7,774 passenger carriers subject to
the existing lease and interchange requirements, representing
approximately 58 percent of all active interstate passenger carriers.
As presented in Table 2, this population of passenger carriers is
projected to increase slightly, due to general baseline industry
growth, to 8,046 passenger carriers in 2021, the first year that the
rule is anticipated to be in effect. Therefore, the Agency estimates
that 8,046 passenger carriers will experience regulatory relief under
the rule. The number of these 8,046 passenger carriers that are small
entities is not directly known by FMCSA, and is therefore estimated
below.
The U.S. Small Business Administration (SBA) defines the size
standards used to classify entities as small. SBA establishes separate
standards for each industry, as defined by the North American Industry
Classification System (NAICS).\47\ The Agency estimates that the
passenger carriers that will experience regulatory relief under the
rule will be in industries within Subsector 485 (Transit and Ground
Passenger Transportation). All eleven 6-digit NAICS industries within
Subsector 485 have an SBA size standard based on annual revenue of
$15.0 million. Three of the eleven 6-digit NAICS industries within
Subsector 485 are likely to encompass most of the passenger carriers
that will experience regulatory relief under the rule, and details
regarding the SBA size standards for those three industries are
presented in Table 6.
---------------------------------------------------------------------------
\47\ OMB. ``North American Industry Classification System.''
2017. Available at: https://www.census.gov/eos/www/naics/2017NAICS/2017_NAICS_Manual.pdf (accessed June 3, 2019).
Table 6--SBA Size Standards for Selected Industries (a)
----------------------------------------------------------------------------------------------------------------
SBA size
standard
(annual SBA size standard (number
NAICS code NAICS industry description revenue in of employees)
millions of
dollars)
----------------------------------------------------------------------------------------------------------------
485113................................ Bus and Other Motor Vehicle $15.0 (none).
Transit Systems.
485210................................ Interurban and Rural Bus 15.0 (none).
Transportation.
485510................................ Charter Bus Industry......... 15.0 (none).
----------------------------------------------------------------------------------------------------------------
Notes:
(a) U.S. Small Business Administration (SBA). ``Table of Small Business Size Standards.'' October 1, 2017.
Available at: https://www.sba.gov/sites/default/files/files/Size_Standards_Table_2017.xlsx (accessed June 3,
2019).
[[Page 40290]]
Data regarding the annual revenue earned by the estimated 8,046
passenger carriers that will experience regulatory relief under the
rule is not collected by FMCSA and is not otherwise available from
other sources. Therefore, the SBA size standard of $15.0 million in
annual revenue cannot be directly applied to determine how many of
these passenger carriers are small entities. FMCSA does, however,
collect information regarding the number of passenger-carrying vehicles
operated by these carriers. As of the end of 2017, of the active
interstate passenger carriers operating in the U.S. as presented
earlier in Table 3, approximately 81 percent operated six or fewer
passenger vehicles, and approximately 93 percent operated 19 or fewer
passenger vehicles.\48\ We estimate that in the passenger carrier
industry, the average annual revenue earned per motorcoach is
approximately $200,000.49 50 51 This means that the SBA size
standard of $15.0 million in annual revenue equates to a carrier size
of 75 passenger vehicles. Therefore, carriers operating 75 passenger
vehicles or fewer are classified as small, consistent with the SBA size
standard of $15.0 million. As of the end of 2017, of the active
interstate passenger carriers operating in the U.S. as presented
earlier in Table 3, approximately 98 percent operated 75 or fewer
passenger vehicles. The Agency does not believe that the rule will
disproportionately apply to either larger or smaller passenger
carriers, and we therefore estimate that a similar 98 percent of the
8,046 passenger carriers that will experience regulatory relief under
the rule, or approximately 7,885 passenger carriers, will be small
entities. Therefore, as also determined in the 2018 NPRM, this rule
will have an impact on a substantial number of small entities.
---------------------------------------------------------------------------
\48\ U.S. DOT, FMCSA. Motor Carrier Management Information
System (MCMIS), and Licensing and Insurance (L&I) system. Snapshots
as of December 29, 2017 (DART request ID # 38883).
\49\ The information available regarding revenue for the
passenger carrier industry is limited. The American Bus Associated
reported that for 2004, revenue per motorcoach was approximately
$160,000. Inflated from 2004 dollars to 2016 dollars using either
the CPI-U or the Implicit Price Deflator for GDP, this value becomes
approximately $200,000 per vehicle.
\50\ American Bus Association (ABA). ``Motorcoach Census 2005.''
September 2006. Page 19, Table 3-5 (Carrier Revenue per Motorcoach,
Averages, 2004). Available at: https://www.iru.org/apps/cms-filesystem-action?file=events_2007_busandcoach/Motorcoach%20Census%202005%2009-21-20061.pdf (accessed June 3,
2019).
\51\ Greyhound, one of the largest interstate passenger carriers
operating in the U.S., reported total revenue for 2017 of $894
million, with 78 percent of that total, or $697 million, being
passenger revenue. With a fleet size reported to consist of 1,600
buses for the same year, this equals an average passenger revenue
per motorcoach of $435,000. We believe that substantially higher
levels of per vehicle revenue such as this are not representative of
the smaller passenger carriers that make up most of the industry,
and therefore the lesser estimate of $200,000 revenue per motorcoach
described above was used here so as not to risk underestimating the
number of small entities in the passenger carrier industry when used
to compare against the SBA size standard of $15.0 million in annual
revenue. Greyhound data is from ``FirstGroup plc, Annual Report and
Accounts, 2017'', pages 18-19, available at https://
www.firstgroupplc.com/~/media/Files/F/Firstgroup-Plc/indexed-pdfs/
2017%20ARA/
2017%20FirstGroup%20plc%20Annual%20Report%20and%20Accounts.pdf
(accessed June 3, 2019).
---------------------------------------------------------------------------
Although FMCSA has determined that this rule will have an impact on
a substantial number of small entities, the Agency has determined that
the impact on the small entities that will experience regulatory relief
under the rule will not be significant. The rule will not result in any
increase in costs or any increase in burden for passenger carriers that
are small entities. The effect of the rule will be a reduction in costs
and burden, and will be entirely beneficial to the passenger carriers
that are small entities. As discussed in the Regulatory Analyses
section, the Agency estimates that the rule will result in a total cost
savings of $76.5 million on an undiscounted basis over the 10-year
analysis period used for the regulatory evaluation, or $7.65 million on
an annualized basis, expressed in 2016 dollars. As presented in Table
2, an annual average of approximately 8,366 passenger carriers will
experience regulatory relief under the rule over the same 10-year
analysis period, 98 percent of which are estimated to be small
entities. The annual average cost savings per small carrier will
therefore be at most $914 (potentially even somewhat less, given that
approximately 2 percent of passenger carriers that will experience
regulatory relief under the rule are not small entities and therefore
may represent a disproportionately larger share of the overall absolute
cost savings because of the larger scale of their operations). For even
the smallest of the small entities, those operating only one passenger
vehicle, this $914 in annual savings represents only about one half of
one percent of the estimated total annual revenues of $200,000 for a
carrier with just one motorcoach. Therefore, as also determined in the
2018 NPRM, although FMCSA has determined that this rule will have an
impact on a substantial number of small entities, the Agency has also
determined that the impact on these small entities will not be
significant, and furthermore will be entirely beneficial.
Accordingly, pursuant to section 605(b) of the Regulatory
Flexibility Act, 5 U.S.C. 605(b), I hereby certify that this final rule
will not have a significant economic impact on a substantial number of
small entities.
D. 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 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, Ms.
Loretta Bitner, listed in the FOR FURTHER INFORMATION CONTACT section
of this 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). The DOT has a policy regarding the
rights of small entities to regulatory enforcement fairness and an
explicit policy against retaliation for exercising these rights.\52\
---------------------------------------------------------------------------
\52\ U.S. DOT. ``The Rights of Small Entities To Enforcement
Fairness and Policy Against Retaliation.'' Available at: https://www.transportation.gov/sites/dot.gov/files/docs/SBREFAnotice2.pdf
(accessed June 3, 2019).
---------------------------------------------------------------------------
E. 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. The Act requires agencies to prepare a
comprehensive written statement for any final rule that may result in
the expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $161 million (which is the
value equivalent of $100 million in 1995, adjusted for inflation to
2017 levels) or more in any one year. Because this rule does not result
in such an expenditure, a written statement is not required. However,
the Agency does discuss the costs and benefits of this rule elsewhere
in this preamble.
[[Page 40291]]
F. Paperwork Reduction Act
This final rule amends two OMB-approved information collections
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), OMB
Control No. 2126-0054, ``Commercial Motor Vehicle Marking
Requirements,'' and OMB Control No. 2126-0056, ``Lease and Interchange
of Vehicles.'' As defined in 5 CFR 1320.3(c), ``collection of
information'' includes reporting, recordkeeping, monitoring, posting,
labeling, and other similar actions. The title and description of the
information collections, a description of those who must collect the
information, and an estimate of the total annual burden follow. The
estimate covers the time for reviewing instructions, searching existing
sources of data, gathering and maintaining the data needed, and
completing and reviewing the collection.
OMB Control No. 2126-0054 (Commercial Motor Vehicle Marking
Requirements)
The Agency's CMV marking regulations require freight-carrying
commercial motor carriers, passenger-carrying commercial motor
carriers, and intermodal equipment providers to display the USDOT
number and the legal name or a single trade name of the carrier or
intermodal equipment provider on their vehicles. The USDOT number is
used to identify all motor carriers in FMCSA's registration and
information systems. It is also used by States as the key identifier in
the Performance and Registration Information Systems Management (PRISM)
system, a cooperative Federal/State program that makes motor carrier
safety a requirement for obtaining and maintaining CMV registration and
privileges. Vehicle marking requirements are intended to ensure that
FMCSA, NTSB, and State safety officials can identify motor carriers and
correctly assign responsibility for regulatory violations during
inspections, investigations, compliance reviews, and crash studies.
These marking requirements also provide the public with beneficial
information that could assist in identifying carriers for the purposes
of commerce, complaints, or emergency notification.
The final rule will eliminate the existing requirement under 49 CFR
390.303(f) for the temporary marking of leased commercial passenger
vehicles. The final rule will therefore amend the OMB-approved
information collection titled ``Commercial Motor Vehicle Marking
Requirements,'' OMB No. 2126-0054. In the currently approved
information collection, the temporary marking of leased passenger-
carrying CMVs was assumed to have de minimis time burden, and therefore
no separate time burden was estimated for that element of the
passenger-carrying CMV marking requirements. Because of this, in the
revision to this information collection, there is no change in time
burden due to program change, and the estimated changes in time burden
from the currently approved information collection are due to
adjustments related to factors such as revised estimates of the
population of passenger-carrying motor carriers and industry growth
rate. There is a small reduction in the annual cost burden, however,
related to the elimination of the cost of materials (paper and adhesive
tape) estimated to be used for the temporary vehicle markings that are
to be eliminated.
Title: Commercial Motor Vehicle Marking Requirements
OMB Control Number: 2126-0054
Summary of the Collection of Information: Under the information
collection, freight-carrying commercial motor carriers, passenger-
carrying commercial motor carriers, and intermodal equipment providers
mark their vehicles to display the USDOT number and the legal name or a
single trade name of the carrier or intermodal equipment provider. This
vehicle marking occurs when a new vehicle is purchased, when a used
vehicle is purchased and requires re-marking, and when a vehicle is
retained by the owner but the existing label reaches the end of its
useful life.
Need for Information: Vehicle marking requirements are needed to
ensure that FMCSA, the NTSB, and State safety officials can identify
motor carriers and correctly assign responsibility for regulatory
violations during inspections, investigations, compliance reviews, and
crash studies. These marking requirements also provide the public with
beneficial information that could assist in identifying carriers for
the purposes of commerce, complaints, or emergency notification.
Proposed Use of Information: The USDOT number is used to identify
all motor carriers in FMCSA's registration and information systems, is
used as the key identifier in the PRISM system, and is used by the
public to assist in identifying carriers for the purposes of commerce,
complaints, or emergency notification.
Description of the Respondents: Freight-carrying commercial motor
carriers, passenger-carrying commercial motor carriers, and intermodal
equipment providers.
Number of Respondents:
IC-1 (freight carriers) number of respondents: 317,041
IC-2 (passenger carriers) number of respondents: 7,816
IC-3 (intermodal equipment providers) number of respondents: 11
Total number of respondents: 324,868
Frequency of Response:
IC-1 (freight carriers) frequency of response: 7.9 responses per year,
per respondent.
IC-2 (passenger carriers) frequency of response: 20.4 responses per
year, per respondent.
IC-3 (intermodal equipment providers) frequency of response: 3,962
responses per year, per respondent.
Overall average frequency of response: 8.3 responses per year, per
respondent
Burden per Response:
IC-1 (freight carriers) burden per response: 0.43 hours
IC-2 (passenger carriers) burden per response: 0.43 hours
IC-3 (intermodal equipment providers) burden per response: 0.43 hours
Overall average burden per response: 0.43 hours
Estimate of Total Annual Burden:
IC-1 (freight carriers) burden: 1,085,658 hours
IC-2 (passenger carriers) burden: 69,151 hours
IC-3 (intermodal equipment providers) burden: 18,886 hours
Total annual burden: 1,173,695 hours
OMB Control No. 2126-0056 (Lease and Interchange of Vehicles)
The Agency's lease and interchange of vehicles regulations ensure
that truck and bus carriers are identified (and in some cases
protected) when they agree to lease their equipment and drivers to
other carriers. These regulations also ensure that the government and
members of the public can determine who is responsible for a CMV. Prior
to these regulations, some equipment was leased without written
agreements, leading to disputes and confusion over which party to the
lease was responsible for charges and actions and, at times, who was
legally responsible for the vehicle. These recordkeeping requirements
enable the public and investigators to identify the passenger carrier
responsible for safety, and ensure that FMCSA, our State partners, and
the NTSB are better able to identify the responsible motor carrier and
therefore correctly assign regulatory violations to the appropriate
carrier during inspections, investigations, compliance reviews, and
crash studies.
The final rule reduces the scope of the lease and interchange
requirements for
[[Page 40292]]
motor carriers of passengers. Furthermore, those passenger carriers and
passenger-carrying CMV trips for which lease and interchange
requirements remain applicable are subject to reduced requirements. The
applicability of the existing lease and interchange requirements for
motor carriers of passengers under 49 CFR 390.301 are revised and moved
to Sec. 390.401, resulting in a substantial reduction of approximately
75 percent in the number of passenger carriers and passenger-carrying
CMV trips that will be subject to the lease and interchange requirement
for motor carriers of passengers. For those motor carriers of
passengers that remain subject to lease and interchange requirements,
the existing requirements under 49 CFR 390.303(e) for lease receipt
copies will be eliminated, and the existing requirements under 49 CFR
390.305 for charter party notification will also be eliminated.
The final rule therefore amends the OMB-approved information
collection titled ``Lease and Interchange of Vehicles,'' OMB No. 2126-
0056. In the revision to this information collection, there is
substantial reduction in time burden due to program change from the
currently approved information collection because of the rule.
Title: Lease and Interchange of Vehicles
OMB Control Number: 2126-0056
Summary of the Collection of Information: Under the information
collection, freight-carrying commercial motor carriers and passenger-
carrying commercial motor carriers negotiate leases, prepare and sign
lease documents, and produce copies of lease documents.
Need for Information: The Agency's lease and interchange of
vehicles regulations ensure that truck and bus carriers are identified
(and in some cases protected) when they agree to lease their equipment
and drivers to other carriers. These regulations also ensure that the
government and members of the public can determine who is responsible
for a CMV. These recordkeeping requirements enable the public and
investigators to identify the passenger carrier responsible for safety.
Proposed Use of Information: The government generally collects
little information with this ICR. The leases and other agreements are
developed and held by the lessor (e.g., those granting use of
equipment) and lessee (e.g., party acquiring equipment). They are used
to assign duties and responsibilities. The information may also be used
by law enforcement to determine legal responsibility if a leased
vehicle is in violation of the regulations or is involved in a crash.
Description of the Respondents: Freight-carrying commercial motor
carriers, and passenger-carrying commercial motor carriers.
Number of Respondents:
IC-1 (property-carrying CMVs) number of respondents: 36,001
IC-2 (passenger-carrying CMVs) number of respondents: 6,729
Total number of respondents: 42,730
Frequency of Response:
IC-1 (property-carrying CMVs) frequency of response: 19.9 responses per
year, per respondent.
IC-2 (passenger-carrying CMVs) frequency of response: 65.4 responses
per year, per respondent.
Overall average frequency of response: 27.1 responses per year, per
respondent
Burden per Response:
IC-1 (property-carrying CMVs) burden per response: 0.11 hours
IC-2 (passenger-carrying CMVs) burden per response: 0.13 hours
Overall average burden per response: 0.12 hours
Estimate of Total Annual Burden:
IC-1 (property-carrying CMVs) burden: 77,767 hours
IC-2 (passenger-carrying CMVs) burden: 58,520 hours
Total annual burden: 136,287 hours
As required by the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)), FMCSA will submit a copy of this rule to OMB for its review
of the collection of information.
FMCSA asked for public comment on the collection of information in
the 2018 NPRM. No comments addressed the collection of information
analysis to the NPRM.
G. 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 has determined that this rule will not have
substantial direct costs on or for States, nor will it limit the
policymaking discretion of States. Nothing in this document preempts
any State law or regulation. No comments received addressed Federalism
implications. Therefore, this rule does not have sufficient Federalism
implications to warrant the preparation of a Federalism Impact
Statement.
H. E.O. 12988 (Civil Justice Reform)
This rule meets applicable standards in sections 3(a) and 3(b)(2)
of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate
ambiguity, and reduce burden.
I. E.O. 13045 (Protection of Children)
Executive Order 13045, Protection of Children from Environmental
Health Risks and Safety Risks (62 FR 19885, April 23, 1997), requires
agencies issuing ``economically significant'' rules, if the regulation
also concerns an environmental health or safety risk that an agency has
reason to believe may disproportionately affect children, to include an
evaluation of the regulation's environmental health and safety effects
on children. The Agency determined this rule is not economically
significant. Therefore, no analysis of the impacts on children is
required. In any event, the Agency does not anticipate that this
regulatory action could in any respect present an environmental or
safety risk that could disproportionately affect children.
J. E.O. 12630 (Taking of Private Property)
FMCSA reviewed this final rule in accordance with E.O. 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights, and has determined it will not effect a taking of
private property or otherwise have taking implications.
K. Privacy
Section 522 of title I of division H of the Consolidated
Appropriations Act, 2005, enacted December 8, 2004 (Pub. L. 108-447,
118 Stat. 2809, 3268, 5 U.S.C. 552a note), requires the Agency to
conduct a Privacy Impact Assessment (PIA) of a regulation that will
affect the privacy of individuals. This rule does not require the
collection of any personally identifiable information.
The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies
and any non-Federal agency that receives records contained in a system
of records from a Federal agency for use in a matching program. FMCSA
has determined that this rule would not result in a new or revised
Privacy Act System of Records for FMCSA.
The E-Government Act of 2002, Public Law 107-347, sec. 208, 116
Stat. 2899, 2921 (December 17, 2002), requires Federal agencies to
conduct a PIA 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
[[Page 40293]]
information as a result of this rule. Accordingly, FMCSA has not
conducted a privacy impact assessment.
L. E.O. 12372 (Intergovernmental Review)
The regulations implementing E.O. 12372 regarding intergovernmental
consultation on Federal programs and activities do not apply to this
program.
M. E.O. 13211 (Energy Supply, Distribution, or Use)
FMCSA has analyzed this rule under E.O. 13211, Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use. The Agency has determined that it is not a ``significant energy
action'' under that order because it is not a ``significant regulatory
action'' likely to have a significant adverse effect on the supply,
distribution, or use of energy. Therefore, it does not require a
Statement of Energy Effects under E.O. 13211.
N. E.O. 13783 (Promoting Energy Independence and Economic Growth)
Executive Order 13783 directs executive departments and agencies to
review existing regulations that potentially burden the development or
use of domestically produced energy resources, and to appropriately
suspend, revise, or rescind those that unduly burden the development of
domestic energy resources. In accordance with E.O. 13783, the DOT
prepared and submitted a report to the Director of OMB providing
specific recommendations that, to the extent permitted by law, could
alleviate or eliminate aspects of agency action that burden domestic
energy production. The DOT has not identified this rule as potentially
alleviating unnecessary burdens on domestic energy production under
E.O. 13783.
O. 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.
P. National Technology Transfer and Advancement Act (Technical
Standards)
The National Technology Transfer and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use voluntary consensus standards
in their regulatory activities unless the agency provides Congress,
through OMB, with an explanation of why using these standards would be
inconsistent with applicable law or otherwise impractical. Voluntary
consensus standards (e.g., specifications of materials, performance,
design, or operation; test methods; sampling procedures; and related
management systems practices) are standards developed or adopted by
voluntary consensus standards bodies. This rule does not use technical
standards. Therefore, FMCSA did not consider the use of voluntary
consensus standards.
Q. Environment (NEPA and CAA)
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, March 1, 2004),
Appendix 2, paragraphs (6)(y)(2) and (6)(y)(7). The Categorical
Exclusion (CE) in paragraph (6)(y)(2) covers regulations implementing
motor carrier identification and registration reports. The Categorical
Exclusion (CE) in paragraph (6)(y)(7) covers regulations implementing
prohibitions on motor carriers, agents, officers, representatives, and
employees from making fraudulent or intentionally false statements on
any application, certificate, report, or record required by FMCSA. The
requirements in this rule are covered by these CEs, and the action does
not have the potential to significantly affect the quality of the
environment. The CE determination is available for inspection or
copying in the regulations.gov website listed under ADDRESSES.
FMCSA also analyzed this rule under section 176(c) of the Clean Air
Act, as amended (CAA) (42 U.S.C. 7401 et seq.), and implementing
regulations promulgated by the Environmental Protection Agency.
Approval of this action is exempt from the CAA's general conformity
requirement since it does not affect direct or indirect emissions of
criteria pollutants.
List of Subjects in 49 CFR Part 390
Highway safety, Intermodal transportation, Motor carriers, Motor
vehicle safety, Reporting and recordkeeping requirements.
In consideration of the foregoing, FMCSA amends 49 CFR chapter III,
subchapter B, part 390 to read as follows:
PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL
0
1. The authority citation for part 390 continues to read as follows:
Authority: 49 U.S.C. 504, 508, 31132, 31133, 31134, 31136,
31137, 31144, 31149, 31151, 31502; sec. 114, Pub. L. 103-311, 108
Stat. 1673, 1677; sec. 212 and 217, Pub. L. 106-159, 113 Stat. 1748,
1766, 1767; sec. 229, Pub. L. 106-159 (as added and transferred by
sec. 4115 and amended by secs. 4130-4132, Pub. L. 109-59, 119 Stat.
1144, 1726, 1743; sec. 4136, Pub. L. 109-59, 119 Stat. 1144, 1745;
secs. 32101(d) and 32934, Pub. L. 112-141, 126 Stat. 405, 778, 830;
sec. 2, Pub. L. 113-125, 128 Stat. 1388; secs. 5403, 5518, and 5524,
Pub. L. 114-94, 129 Stat. 1312, 1548, 1558, 1560; sec. 2, Pub. L.
115-105, 131 Stat. 2263; and 49 CFR 1.81. 1.81a, 1.87.
0
2. Amend Sec. 390.5 as follows:
0
a. Lift the suspension of the section;
0
b. Revise the definition of ``Lease,'' ``Lessee,'' and ``Lessor'''';
0
c. Suspend Sec. 390.5 indefinitely.
The revised text reads as follows:
Sec. 390.5 Definitions.
* * * * *
Lease, as used in subpart G of this part, means a contract or
agreement in which a motor carrier of passengers grants the use of a
passenger-carrying commercial motor vehicle to another motor carrier,
with or without a driver, for a specified period for the transportation
of passengers, whether or not compensation for such use is specified or
required, when one or more of the motor carriers of passengers is not
authorized to operate in interstate commerce pursuant to 49 U.S.C.
13901-13902. The term lease includes an interchange, as defined in this
section, or other agreement granting the use of a passenger-carrying
commercial motor vehicle for a specified period, with or without a
driver, whether or not compensation for such use is specified or
required. For a definition of lease in the context of property-carrying
vehicles, see Sec. 376.2 of this subchapter.
Lessee, as used in subpart G of this part, means the motor carrier
obtaining the use of a passenger-carrying commercial motor vehicle,
with or without the driver, from another motor carrier, through a lease
as defined in this section. The term lessee includes a motor carrier
obtaining the use of a passenger-carrying commercial motor vehicle from
another motor carrier under an interchange or other agreement, with or
without a driver, whether or not compensation for such use is
specified. For a definition of lessee in the context of property-
carrying vehicles, see Sec. 376.2 of this subchapter.
[[Page 40294]]
Lessor, as used in subpart G of this part, means the motor carrier
granting the use of a passenger-carrying commercial motor vehicle, with
or without the driver, to another motor carrier, through a lease as
defined in this section. The term lessor includes a motor carrier
granting the use of a passenger-carrying commercial motor vehicle, with
or without the driver, to another motor carrier under an interchange or
other agreement, whether or not compensation for such use is specified.
For a definition of lessor in the context of property-carrying
vehicles, see Sec. 376.2 of this subchapter.
* * * * *
0
3. Amend Sec. 390.5T by revising the definitions of ``Lease,''
``Lessee,'' and ``Lessor'' to read as follows:
Sec. 390.5T Definitions.
* * * * *
Lease, as used in subpart G of this part, means a contract or
agreement in which a motor carrier of passengers grants the use of a
passenger-carrying commercial motor vehicle, with or without the
driver, to another motor carrier, for a specified period for the
transportation of passengers, whether or not compensation for such use
is specified or required, when one or more of the motor carriers of
passengers is not authorized to operate in interstate commerce pursuant
to 49 U.S.C. 13901-13902. The term lease includes an interchange, as
defined in this section, or other agreement granting the use of a
passenger-carrying commercial motor vehicle, with or without the
driver, for a specified period, whether or not compensation for such
use is specified or required. For a definition of lease in the context
of property-carrying vehicles, see Sec. 376.2 of this subchapter.
Lessee, as used in subpart G of this part, means the motor carrier
obtaining the use of a passenger-carrying commercial motor vehicle,
with or without the driver, from another motor carrier, through a lease
as defined in this section. The term lessee includes a motor carrier
obtaining the use of a passenger-carrying commercial motor vehicle,
with or without the driver, from another motor carrier under an
interchange or other agreement, whether or not compensation for such
use is specified. For a definition of lessee in the context of
property-carrying vehicles, see Sec. 376.2 of this subchapter.
Lessor, as used in subpart G of this part, means the motor carrier
granting the use of a passenger-carrying commercial motor vehicle, with
or without the driver, to another motor carrier, through a lease as
defined in this section. The term lessor includes a motor carrier
granting the use of a passenger-carrying commercial motor vehicle, with
or without the driver, to another motor carrier under an interchange or
other agreement, whether or not compensation for such use is specified.
For a definition of lessor in the context of property-carrying
vehicles, see Sec. 376.2 of this subchapter.
* * * * *
0
4. Amend Sec. 390.21 as follows:
0
a. Lift the suspension of the section;
0
b. Revise paragraph (e);
0
c. Remove paragraph (f);
0
d. Redesignate paragraphs (g) and (h) as paragraphs (f) and (g),
respectively;
0
e. Suspend Sec. 390.21 indefinitely.
The revised text reads as follows:
Sec. 390.21 Marking of self-propelled CMVs and intermodal equipment.
* * * * *
(e) Rented CMVs and leased passenger-carrying CMVs. A motor carrier
operating a self-propelled CMV under a rental agreement or a passenger-
carrying CMV under a lease, when the rental agreement or lease has a
term not in excess of 30 calendar days, meets the requirements of this
section if:
(1) The CMV is marked in accordance with the provisions of
paragraphs (b) through (d) of this section; or
(2) Except as provided in paragraph (e)(2)(v) of this section, the
CMV is marked as set forth in paragraph (e)(2)(i) through (iv) of this
section:
(i) The legal name or a single trade name of the lessor is
displayed in accordance with paragraphs (c) and (d) of this section.
(ii) The lessor's identification number preceded by the letters
``USDOT'' is displayed in accordance with paragraphs (c) and (d) of
this section; and
(iii) The rental agreement or lease as applicable entered into by
the lessor and the renting motor carrier or lessee conspicuously
contains the following information:
(A) The name and complete physical address of the principal place
of business of the renting motor carrier or lessee;
(B) The identification number issued to the renting motor carrier
or lessee by FMCSA, preceded by the letters ``USDOT,'' if the motor
carrier has been issued such a number. In lieu of the identification
number required in this paragraph, the following information may be
shown in a rental agreement:
(1) Whether the motor carrier is engaged in ``interstate'' or
``intrastate'' commerce; and
(2) Whether the renting motor carrier is transporting hazardous
materials in the rented CMV;
(C) The sentence: ``This lessor cooperates with all Federal, State,
and local law enforcement officials nationwide to provide the identity
of customers who operate this rental CMV''; and
(iv) The rental agreement or lease as applicable entered into by
the lessor and the renting motor carrier or lessee is carried on the
rental CMV or leased passenger-carrying CMV during the full term of the
rental agreement or lease. See the property-carrying leasing
regulations at 49 CFR part 376 and the passenger-carrying leasing
regulations at subpart G of this part for information that should be
included in all leasing documents.
(v) Exception. (A) The passenger-carrying CMV operating under the
48-hour emergency exception pursuant to Sec. 390.403(a)(2) of this
part does not need to comply with paragraphs (e)(2)(iii) and (iv) of
this section, provided the lessor and lessee comply with the
requirements of Sec. 390.403(a)(2).
(B) A motor carrier operating a self-propelled CMV under a lease
subject to subpart G of this part (Sec. Sec. 390.401 and 390.403) must
begin complying with this paragraph (e) on January 1, 2021.
* * * * *
0
5. Amend Sec. 390.21T by
0
a. Revising paragraph (e);
0
b. Removing paragraph (f);
0
c. Redesignating paragraphs (g) and (h) as paragraphs (f) and (g),
respectively.
The revision to read as follows:
Sec. 390.21T Marking of self-propelled CMVs and intermodal
equipment.
* * * * *
(e) Rented CMVs and leased passenger-carrying CMVs. A motor carrier
operating a self-propelled CMV under a rental agreement or a passenger-
carrying CMV under a lease, when the rental agreement or lease has a
term not in excess of 30 calendar days, meets the requirements of this
section if:
(1) The CMV is marked in accordance with the provisions of
paragraphs (b) through (d) of this section; or
(2) Except as provided in paragraph (e)(2)(v) of this section, the
CMV is marked as set forth in paragraph (e)(2)(i) through (iv) of this
section:
(i) The legal name or a single trade name of the lessor is
displayed in accordance with paragraphs (c) and (d) of this section.
(ii) The lessor's identification number preceded by the letters
``USDOT'' is displayed in accordance with paragraphs (c) and (d) of
this section; and
(iii) The rental agreement or lease as applicable entered into by
the lessor and
[[Page 40295]]
the renting motor carrier or lessee conspicuously contains the
following information:
(A) The name and complete physical address of the principal place
of business of the renting motor carrier or lessee;
(B) The identification number issued to the renting motor carrier
or lessee by FMCSA, preceded by the letters ``USDOT,'' if the motor
carrier has been issued such a number. In lieu of the identification
number required in this paragraph, the following information may be
shown in a rental agreement:
(1) Whether the motor carrier is engaged in ``interstate'' or
``intrastate'' commerce; and
(2) Whether the renting motor carrier or lessee is transporting
hazardous materials in the rented or leased CMV;
(C) The sentence: ``This lessor cooperates with all Federal, State,
and local law enforcement officials nationwide to provide the identity
of customers who operate this rental or leased CMV''; and
(iv) The rental agreement or lease as applicable entered into by
the lessor and the renting motor carrier or lessee is carried on the
rental CMV or leased passenger-carrying CMV during the full term of the
rental agreement or lease. See the property-carrying leasing
regulations at 49 CFR part 376 and the passenger-carrying leasing
regulations at subpart G of this part for information that should be
included in all leasing documents.
(v) Exception. (A) A passenger-carrying CMV operating under the 48-
hour emergency exception pursuant to Sec. 390.403(a)(2) of this part
does not need to comply with paragraphs (e)(2)(iii) and (iv) of this
section, provided the lessor and lessee comply with the requirements of
Sec. 390.403(a)(2).
(B) A motor carrier operating a self-propelled CMV under a lease
subject to subpart G of this part (Sec. Sec. 390.401 and 390.403) must
begin complying with this paragraph (e) on January 1, 2021.
* * * * *
Subpart F--[Removed and Reserved]
0
6. Remove and reserve subpart F of part 390, consisting of Sec. Sec.
390.300T through 390.305.
0
5. Add subpart G, consisting of Sec. Sec. 390.401 and 390.403, to read
as follows:
Subpart G--Lease and Interchange of Passenger-Carrying Commercial Motor
Vehicles
Sec.
390.401 Applicability.
390.403 Lease and interchange requirements.
Subpart G--Lease and Interchange of Passenger-Carrying Commercial
Motor Vehicles
Sec. 390.401 Applicability.
(a) General. Beginning on January 1, 2021, and except as provided
in paragraphs (b)(1) and (2) of this section, this subpart applies to
the following actions, irrespective of duration, or the presence or
absence of compensation, by motor carriers operating commercial motor
vehicles to transport passengers:
(1) The lease of passenger-carrying commercial motor vehicles; and
(2) The interchange of passenger-carrying commercial motor vehicles
between motor carriers.
(b) Exceptions--(1) Contracts and agreements between motor carriers
of passengers with active passenger carrier operating authority
registrations. This subpart does not apply to contracts and agreements
between motor carriers of passengers that have active passenger carrier
operating authority registrations with the Federal Motor Carrier Safety
Administration when one such motor carrier acquires transportation
service(s) from another such motor carrier(s).
(2) Financial leases. This subpart does not apply to a contract
(however designated, e.g., lease, closed-end lease, hire purchase,
lease purchase, purchase agreement, installment plan, demonstration or
loaner vehicle, etc.) between a motor carrier and a bank or similar
financial organization or a manufacturer or dealer of passenger-
carrying commercial motor vehicles allowing the motor carrier to use
the passenger-carrying commercial motor vehicle.
(c) Penalties. If the use of a passenger-carrying commercial motor
vehicle is conferred on one motor carrier subject to this subpart by
another such motor carrier without a lease or interchange agreement, or
pursuant to a lease or interchange agreement that fails to meet all
applicable requirements of subpart G, both motor carriers shall be
subject to a civil penalty.
Sec. 390.403 Lease and interchange requirements.
Beginning on January 1, 2021, and except as provided in Sec.
390.401(b) of this section, a motor carrier may transport passengers in
a leased or interchanged commercial motor vehicle only under the
following conditions:
(a) In general--(1) Lease or agreement required. There shall be in
effect either:
(i) A lease granting the use of the passenger-carrying commercial
motor vehicle and meeting the conditions of paragraphs (b) and (c) of
this section. The provisions of the lease shall be adhered to and
performed by the lessee; or
(ii) An agreement meeting the conditions of paragraphs (b) and (c)
of this section and governing the interchange of passenger-carrying
commercial motor vehicles between motor carriers of passengers
conducting service on a route or series of routes. The provisions of
the interchange agreement shall be adhered to and performed by the
lessee.
(2) Exception. When an event occurs (e.g., a crash, the vehicle is
disabled) that requires a motor carrier of passengers immediately to
obtain a replacement vehicle from another motor carrier of passengers,
the two carriers may postpone the writing of the lease or written
agreement for the replacement vehicle for up to 48 hours after the time
the lessee takes exclusive possession and control of the replacement
vehicle. However, during that 48-hour period, until the lease or
agreement is written and provided to the driver, the driver must carry,
and produce upon demand of an enforcement official, a document signed
and dated by the lessee's driver or available company official stating:
``[Carrier A, USDOT number, telephone number] has leased this vehicle
to [Carrier B, USDOT number, telephone number] pursuant to 49 CFR
390.403(a)(2).''
(b) Contents of the lease. The lease or interchange agreement
required by paragraph (a) of this section shall contain:
(1) Vehicle identification information. The name of the vehicle
manufacturer, the year of manufacture, and at least the last 6 digits
of the Vehicle Identification Number (VIN) of each passenger-carrying
commercial motor vehicle transferred between motor carriers pursuant to
the lease or interchange agreement.
(2) Parties. The legal name, USDOT number, and telephone number of
the motor carrier providing passenger transportation in a commercial
motor vehicle (lessee) and the legal name, USDOT number, and telephone
number of the motor carrier providing the equipment (lessor), and
signatures of both parties or their authorized representatives.
(3) Specific duration. The time and date when, and the location
where, the lease or interchange agreement begins and ends.
(4) Exclusive possession and responsibilities. (i) A clear
statement that the motor carrier obtaining the passenger-carrying
commercial motor vehicle (the lessee) has exclusive possession,
control, and use of the passenger-carrying commercial motor
[[Page 40296]]
vehicle for the duration of the agreement, and assumes complete
responsibility for operation of the vehicle and compliance with all
applicable Federal regulations for the duration of the agreement.
(ii) In the event of a sublease between motor carriers, all of the
requirements of this section shall apply to a sublease.
(c) Copies of the lease. A copy shall be on the passenger-carrying
commercial motor vehicle during the period of the lease or interchange
agreement, and both the lessee and lessor shall retain a copy of the
lease or interchange agreement for 1 year after the expiration date.
Issued under the authority delegated in 49 CFR 1.87.
Dated: August 8, 2019.
Raymond P. Martinez,
Administrator.
[FR Doc. 2019-17342 Filed 8-13-19; 8:45 am]
BILLING CODE 4910-EX-P
