Exemption of Commonly-Owned Motor Carriers From Equipment Identification and Receipt Requirements Applicable to Leased and Interchanged Vehicles

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

49 CFR Part 376

[FHWA Docket No. FHWA-97-3050]

RIN 2125-AE26

Exemption of Commonly-Owned Motor Carriers From Equipment

Identification and Receipt Requirements Applicable to Leased and

Interchanged Vehicles

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking; request for comments.

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SUMMARY: The FHWA is proposing to modify its regulations under 49 CFR

part 376 governing the lease and interchange of motor vehicle equipment

by exempting commonly-owned and controlled motor carriers from the

vehicle identification and exchange of receipt requirements of

Sec. 376.22 and the identification of equipment requirement of

Sec. 376.31. The FHWA routinely grants waivers from these requirements

on an individual basis. This proposed action would eliminate the need

for carriers to obtain individual waivers from the FHWA.

DATES: Comments to this NPRM should be received no later than March 2,

1998. Late comments will be considered to the extent practicable.

ADDRESSES: All signed, written comments should refer to the docket

number appearing at the top of this document and must be submitted to

the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 Seventh Street,

SW., Washington, DC 20590-0001. All comments received will be available

for examination at the above address between 10 a.m. and 5 p.m., e.t.,

Monday through Friday, except Federal holidays. Those desiring

notification of receipt of comments must include a self-addressed,

stamped envelope or postcard.

FOR FURTHER INFORMATION CONTACT: Mr. John F. Grimm, Director, Office of

Motor Carrier Information Analysis, (202) 366-4039, or Mr. Michael J.

Falk, Motor Carrier Law Division, Office of the Chief Counsel, (202)

366-1384, Federal Highway Administration, Department of Transportation,

400 Seventh Street, SW., Washington, DC 20590. Office hours are from 8

a.m. to 4:30 p.m., e.t., Monday through Friday, except Federal

holidays.

SUPPLEMENTARY INFORMATION: The FHWA's regulations at 49 CFR part 376

govern motor carrier transportation provided in nonowned equipment.

These regulations, originally promulgated by the Interstate Commerce

Commission (ICC), were formerly codified at 49 CFR part 1057 until

redesignated on October 21, 1996. The ICC Termination Act of 1995

(ICCTA), Public Law 104-88, 109 Stat. 803, transferred jurisdiction

over motor carrier leasing and interchange of equipment practices to

the Secretary of Transportation, who delegated this function to the

FHWA under 49 CFR 1.48(h)(6).

Section 376.22 permits motor carriers of property, subject to

registration under the ICCTA (authorized carriers), to trip lease

equipment between themselves and private motor carriers under specified

conditions. A trip lease is a contract for the use of nonowned vehicles

for single point-to-point hauls. Section 376.22(a) requires that trip-

leasing carriers comply with the identification of equipment

[[Page 67822]]

requirements of Sec. 376.11(c). Under Sec. 376.22(c)(2), the carriers

must also have a written agreement placing control and responsibility

for the equipment with the lessee during the lease period, as

determined by an exchange of equipment receipts required under

Sec. 376.11(b). Section 376.22(c)(4) permits the use of a master lease

under certain conditions to comply with the trip-leasing requirements.

Vehicle Identification Requirements

Under Sec. 376.11(c)(1), an authorized carrier acquiring the use of

nonowned equipment must identify the equipment in accordance with the

marking of commercial vehicle regulations at 49 CFR part 390, subpart D

(formerly 49 CFR part 1058). These regulations require that commercial

vehicles display the name or trade name of the motor carrier operating

the vehicle, as well as its principal place of business and motor

carrier identification number.

Equipment Receipt Requirements

Under Sec. 376.11(b), at the time the authorized carrier acquires

the use of nonowned equipment, it must give the owner of the equipment

a receipt specifically identifying the equipment and the date and time

of day possession is transferred. A receipt must also be given when the

authorized carrier returns possession of the equipment to the owner, if

required by the lease agreement.

Purpose of These Requirements

The leasing regulations are intended to ensure that motor carriers

providing transportation in vehicles owned and operated by others

assume responsibility for, and control the transportation service in,

equipment they do not own to the same extent as if they owned the

vehicles themselves. This not only affixes carrier responsibility and

liability for the protection of shippers and the general public, but

also facilitates enforcement of applicable regulatory requirements. The

equipment identification and exchange of receipt requirements in

Secs. 376.22(a) and (c) are designed to monitor control and

responsibility for the operation of leased vehicles.

Waivers for Commonly-Owned Carriers

Over the years, motor carriers under joint ownership or control

have requested individual waivers from the equipment identification and

exchange of receipt requirements of Secs. 376.22(a) and (c), when

exchanging equipment among themselves, on the grounds that compliance

is unnecessary and unduly burdensome as long as the carriers remain

under joint ownership and control. The FHWA, as did the ICC before it,

has granted these waivers on the condition that the carriers continue

to comply with other applicable provisions of Sec. 376.22 and that

contractual relationships between owner-operators and the individual

carriers will be governed by Secs. 376.11 and 376.12. The purpose of

this notice of proposed rulemaking is to establish a blanket exemption

from the vehicle identification and receipt requirements of Sec. 376.22

for jointly-owned or controlled carriers, thus eliminating the need for

individual waiver petitions. Such carriers would still be required to

comply with the other applicable provisions of Sec. 376.22, as well as

Secs. 376.11 and 376.12.

The FHWA has granted individual waivers from the Sec. 376.22

identification of vehicles and exchange of receipt requirements because

these requirements serve little public purpose when vehicles are being

exchanged between commonly-controlled companies which are jointly

operated with respect to safety program administration and equipment

utilization. Vehicle ownership and assignment information can be

readily made available from computerized dispatch records and

operational logs, obviating the need for strict identification,

placarding and receipt issuance requirements. Furthermore, commonly-

controlled carriers seeking waivers claim that the elimination of these

requirements would allow them to operate more efficiently and

economically by fostering improved equipment use and eliminating a

significant and unproductive paperwork and placarding burden.

The proposed action is consistent with the National Transportation

Policy because it will promote efficiency in the motor carrier

transportation system and encourage more productive use of equipment

and energy resources. See 49 U.S.C. 13101(a)(2)(B) and (E). It would

also allow FHWA to conserve its own resources by eliminating the need

to grant waivers on an individual basis.

Interchange Identification Requirements

For purposes of consistency between the leasing regulations in

subpart B of part 376 and the interchange regulations in subpart D of

that part, we are also proposing to modify Sec. 376.31(d) with respect

to the interchange of equipment between commonly-controlled authorized

carriers. Interchange of equipment occurs when one motor common carrier

receives equipment from another in order to continue a through

movement. Section 376.31(d)(1) requires that the carrier giving up

possession of the equipment remove all placarding identification

showing it as the operating entity, and that the carrier receiving

possession mark the equipment with its own name, place of business and

identification number, in accordance with 49 CFR part 390, subpart D.

New paragraph (d)(3) would eliminate this requirement for commonly-

controlled carriers interchanging equipment among themselves. It would

also eliminate, for these carriers, the Sec. 376.31(d)(2) requirement

that each vehicle carry a detailed interchange statement.

The FHWA solicits public comment on the proposed modifications of

Secs. 376.22 and 376.31(d), which are set forth below.

Rulemaking Analyses and Notices

All comments received before the close of business on the comment

closing date indicated above will be considered and will be available

for examination in the docket at the above address. Comments received

after the comment closing date will be filed in the docket and will be

considered to the extent practicable, but the FHWA may issue a final

rule at any time after the close of the comment period. In addition to

late comments, the FHWA will also continue to file in the docket

relevant information that becomes available after the comment closing

date, and interested persons should continue to examine the docket for

new material.

Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that this action is not a significant

regulatory action within the meaning of Executive Order 12866 or

significant within the meaning of Department of Transportation

regulatory policies and procedures. It is anticipated that the economic

impact of this rulemaking will be minimal; therefore, a full regulatory

evaluation is not required. The rulemaking merely proposes to exempt a

small number of transportation entities from complying with

identification and documentation requirements which FHWA has routinely

waived upon request. Neither the individual nor cumulative impact of

this action would be significant.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354,

5 U.S.C. 601-612), the FHWA has evaluated the

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effects of this rule on small entities. Based on the evaluation, the

FHWA hereby certifies that this action would not have a significant

economic impact on a substantial number of small entities. The FHWA

receives less than ten petitions per year seeking waiver of vehicle

identification and receipt issuance requirements. The proposed rule,

while beneficial, would not have a significant economic impact.

Executive Order 12612 (Federalism Assessment)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that this action does not have sufficient federalism implications to

warrant the preparation of a federalism assessment.

Executive Order 12372 (Intergovernmental Review)

Catalog of Federal Domestic Assistance Program Number 20.217, Motor

Carrier Safety. The regulations implementing Executive Order 12372

regarding intergovernmental consultation on Federal programs and

activities do not apply to this program.

Paperwork Reduction Act

This action does not contain a collection of information

requirement for purposes of the Paperwork Reduction Act of 1995, 44

U.S.C. 3501 et seq. It is specifically designed to eliminate certain

existing paperwork requirements for commonly-controlled motor carriers

leasing or interchanging vehicles among themselves. Thus, this action

is consistent with goals of the Paperwork Reduction Act.

National Environmental Policy Act

The agency has analyzed this action for the purpose of the National

Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and has

determined that this action would not have any effect on the quality of

the environment.

Regulation Identification Number

A regulation identification number (RIN) is assigned to each

regulatory action listed in the Unified Agenda of Federal Regulations.

The Regulatory Information Service Center publishes the Unified Agenda

in April and October of each year. The RIN number contained in the

heading of this document can be used to cross reference this action

with the Unified Agenda.

List of Subjects in 49 CFR Part 376

Highways and roads, Motor carriers--equipment leasing, Reporting

and recordkeeping requirements.

Issued: December 18, 1997.

Kenneth R. Wykle,

Federal Highway Administrator.

In consideration of the foregoing and under the authority of

section 103 of the ICC Termination Act of 1995, Public Law 104-88, 109

Stat. 803, and 49 CFR 1.48, the FHWA proposes to amend title 49,

chapter III, as follows:

1. The authority citation for part 376 continues to read as

follows:

Authority: 49 U.S.C. 13301 and 14102; 49 CFR 1.48.

2. Section 376.22 is amended by adding new paragraph (d) to read as

follows:

Sec. 376.22 Exemption for private carrier leasing and leasing between

authorized carriers.

* * * * *

(d) Authorized and private carriers under common ownership and

control may lease equipment to each other under this section without

complying with the requirements of paragraph (a) of this section

pertaining to identification of equipment, and the requirements of

paragraphs (c)(2) and (c)(4) of this section pertaining to equipment

receipts. The leasing of equipment between such carriers will be

subject to all other requirements of this section.

3. Section 376.31 is amended by adding paragraph (d)(3) to read as

follows:

Sec. 376.31 Interchange of equipment.

* * * * *

(d)(3) Authorized carriers under common ownership and control may

interchange equipment with each other without complying with the

requirements of paragraph (d)(1) of this section pertaining to removal

of identification from equipment, and the requirements of paragraph

(d)(2) of this section pertaining to the identification of equipment.

[FR Doc. 97-33902 Filed 12-29-97; 8:45 am]

BILLING CODE 4910-22-P