Revisions to Regulations Governing Finance Applications Involving Motor Passenger Carriers

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Parts 1002, 1182, 1187, and 1188

[STB Ex Parte No. 559]

Revisions to Regulations Governing Finance Applications Involving

Motor Passenger Carriers

AGENCY: Surface Transportation Board.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Board proposes to establish revised procedures governing

finance applications involving motor passenger carriers, filed under 49

U.S.C. 14303. The proposed procedures adopt, with modifications, the

existing procedures promulgated by the Interstate Commerce Commission

(ICC). In addition, the regulations in parts 1187 and 1188 are proposed

to be removed and replaced by new provisions incorporated in part 1182.

(Accordingly, in a separate notice published today, the rulemaking

proposed by the ICC in Ex Parte No. MC-216 is being discontinued.)

DATES: Comments are due on August 7, 1997.

ADDRESSES: Send comments (an original and 10 copies) referring to STB

Ex Parte No. 559 to: Surface Transportation Board, Office of the

Secretary, Case Control Unit, Mercury Building, 1925 K Street, N.W.,

Washington, DC 20423-0001.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for

the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: The ICC Termination Act of 1995, Pub. L. No.

104-88, 109 Stat. 803 (1995) (ICCTA), which took effect on January 1,

1996, abolished the Interstate Commerce Commission (ICC) and

transferred certain of its motor carrier regulatory functions to the

Secretary of Transportation (Secretary) and to the Surface

Transportation Board (Board). See ICCTA section 101 (abolition of the

ICC). See also new 49 U.S.C. 13101-14914 (regulatory provisions

applicable to motor carriers, administered in part by the Secretary and

in part by the Board).

erstate Commerce Commission (ICC) and

transferred certain of its motor carrier regulatory functions to the

Secretary of Transportation (Secretary) and to the Surface

Transportation Board (Board). See ICCTA section 101 (abolition of the

ICC). See also new 49 U.S.C. 13101-14914 (regulatory provisions

applicable to motor carriers, administered in part by the Secretary and

in part by the Board).

Finance Jurisdiction. Under the new provisions of 49 U.S.C. 14303,

the Board has jurisdiction over finance transactions'i.e.,

consolidations, mergers, purchases, leases, and contracts to operate

properties or franchises'involving motor passenger carriers. \1\ The

Board's jurisdiction over these finance transactions is similar to that

of the ICC.

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\1\ The ICC had similar jurisdiction over such transactions

involving motor carriers of property and water carriers as well.

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Since enactment of the ICCTA, the Board has continued to apply in

motor passenger carrier cases the procedural rules that were

promulgated by the ICC. In most instances, the former rules have

provided adequate and appropriate guidance to applicants and other

interested parties, and there have been no difficulties in applying

those rules under the new statute. The rules, however, are obsolete in

some areas.

The Board has reviewed the regulations and has determined that

certain modifications are required to conform them to the new statute

and to assure expeditious processing of motor passenger carrier finance

proceedings. Relatively few substantive modifications are required to

the former regulations, and these are detailed in a separate decision,

which is available to all persons for a charge by calling DC NEWS &

DATA, INC., at (202) 289-4357.

Environmental and Energy Considerations

equired to conform them to the new statute

and to assure expeditious processing of motor passenger carrier finance

proceedings. Relatively few substantive modifications are required to

the former regulations, and these are detailed in a separate decision,

which is available to all persons for a charge by calling DC NEWS &

DATA, INC., at (202) 289-4357.

Environmental and Energy Considerations

This action will not significantly affect either the quality of the

human environment or the conservation of energy resources.

Regulatory Flexibility Analysis

The Board certifies that the rules proposed, if adopted, would not

have a significant economic impact on any substantial number of small

entities. The procedures established are simple and expeditious, impose

no additional reporting requirements on small entities, and maintain

the rapid processing time typical of such applications under the former

rules promulgated by the ICC. The Board seeks comments, however, on

whether there would be effects on small entities that should be

considered.

List of Subjects

49 CFR Part 1002

Administrative practice and procedure, Common carriers, Freedom of

information, User fees.

49 CFR Part 1182

Administrative practice and procedure, Maritime carriers, Motor

carriers.

49 CFR Part 1187

Administrative practice and procedure, Maritime carriers, Motor

carriers.

49 CFR Part 1188

Administrative practice and procedure, Motor carriers.

Decided: June 20, 1997.

By the Board, Chairman Morgan and Vice Chairman Owen.

Vernon A. Williams,

Secretary.

For the reasons set forth in the preamble, title 49, chapter X,

parts 1002, 1182, 1187, and 1188 of the Code of Federal Regulations are

proposed to be amended as follows:

PART 1002--FEES

1. The authority citation for part 1002 continues to read as

follows:

Authority: 5 U.S.C. 552(a)(4)(A) and 553; 31 U.S.C. 9701; and 49

U.S.C. 721(a).

2. Section 1002.2 is proposed to be amended by revising fee items

s set forth in the preamble, title 49, chapter X,

parts 1002, 1182, 1187, and 1188 of the Code of Federal Regulations are

proposed to be amended as follows:

PART 1002--FEES

1. The authority citation for part 1002 continues to read as

follows:

Authority: 5 U.S.C. 552(a)(4)(A) and 553; 31 U.S.C. 9701; and 49

U.S.C. 721(a).

2. Section 1002.2 is proposed to be amended by revising fee items

(2) and (5) in the table in paragraph (f) to read as follows:

Sec. 1002.2 Filing fees.

* * * * *

(f) * * *

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Type of proceeding Fee

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(2) An application to consolidate, merge, purchase, lease, or

contract to operate the properties or franchises of motor

carriers of passengers or to acquire control of motor carriers

of passengers, under 49 U.S.C. 14303.......................... 1,100.

* * * * *

(5) A request for interim approval in connection with a finance

application involving a motor carrier of passengers, under 49

U.S.C. 14303(i)............................................... 250.

* * * * *

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3. Part 1182 is proposed to be revised to read as follows:

PART 1182--PURCHASE, MERGER, AND CONTROL OF MOTOR PASSENGER

CARRIERS

Sec.

1182.1 Applications covered by these rules.

1182.2 Content of applications.

1182.3 Filing the application.

1182.4 Board review of the application.

1182.5 Comments.

1182.6 Processing an opposed application.

1182.7 Interim approval.

1182.8 Miscellaneous requirements.

Authority: 5 U.S.C. 559; 21 U.S.C. 853a; and 49 U.S.C. 13501,

13902(c), and 14303.

Sec. 1182.1 Applications covered by these rules.

182.1 Applications covered by these rules.

1182.2 Content of applications.

1182.3 Filing the application.

1182.4 Board review of the application.

1182.5 Comments.

1182.6 Processing an opposed application.

1182.7 Interim approval.

1182.8 Miscellaneous requirements.

Authority: 5 U.S.C. 559; 21 U.S.C. 853a; and 49 U.S.C. 13501,

13902(c), and 14303.

Sec. 1182.1 Applications covered by these rules.

These rules govern applications for authority under 49 U.S.C. 14303

to consolidate, merge, purchase, lease, or contract to operate the

properties or franchises of motor carriers of passengers or to acquire

control of motor carriers of passengers. There is no application form

for these proceedings. Applicants shall file a pleading containing the

information described in 49 CFR 1182.2. See 49 CFR 1002.1(f)(2) and (5)

for filing fees.

Sec. 1182.2 Content of applications.

(a) The application must contain the following information:

(1) Full name, address, and authorized signature of each of the

parties to the transaction;

(2) Copies or descriptions of the pertinent operating authorities

of all of the parties; (NOTE: If an applicant is domiciled in Mexico or

owned or controlled by persons of that country, copies of the actual

operating authorities must be submitted.)

(3) A description of the proposed transaction;

(4) Identification of any motor passenger carriers affiliated with

the parties, a brief description of their operations, and a summary of

the intercorporate structure of the corporate family from top to

bottom;

s domiciled in Mexico or

owned or controlled by persons of that country, copies of the actual

operating authorities must be submitted.)

(3) A description of the proposed transaction;

(4) Identification of any motor passenger carriers affiliated with

the parties, a brief description of their operations, and a summary of

the intercorporate structure of the corporate family from top to

bottom;

(5) A jurisdictional statement, under 49 U.S.C. 14303(g), that the

aggregate gross operating revenues, including revenues of all motor

carrier parties and all of their motor carrier affiliates from all

transportation sources (whether interstate, intrastate, foreign,

regulated, or unregulated) exceeded $2 million;

(Note: The motor passenger carrier parties and their motor passenger

carrier affiliates may select a consecutive 12-month period ending

not more than 6 months before the date of the parties' agreement

covering the transaction. They must, however, select the same 12-

month period.)

(6) A statement indicating whether the transaction will or will not

significantly affect the quality of the human environment and the

conservation of energy resources;

(7) Information to demonstrate that the proposed transaction is

consistent with the public interest, including particularly: the effect

of the proposed transaction on the adequacy of transportation to the

public; the total fixed charges (e.g., interest) that result from the

proposed transaction; and the

interest of carrier employees affected by the proposed transaction. See

49 U.S.C. 14303(b);

(8) Certification of the U.S. Department of Transportation safety

fitness rating of each motor passenger carrier involved in the

transaction, whether that carrier is a party to the transaction or is

affiliated with a party to the transaction;

(9) Certification by the party acquiring any operating rights

through the transaction that it has sufficient insurance coverage under

49 U.S.C. 13906(a) and (d) for the service it intends to provide;

sportation safety

fitness rating of each motor passenger carrier involved in the

transaction, whether that carrier is a party to the transaction or is

affiliated with a party to the transaction;

(9) Certification by the party acquiring any operating rights

through the transaction that it has sufficient insurance coverage under

49 U.S.C. 13906(a) and (d) for the service it intends to provide;

(10) A statement indicating whether any party acquiring any

operating rights through the transaction is either domiciled in Mexico

or owned or controlled by persons of that country; and

(11) If the transaction involves the transfer of operating

authority to an individual who will hold the authority in his or her

name, that individual must complete the following certification:

I, ____________, certify under penalty of perjury under the laws

of the United States, that I have not been convicted, after

September 1, 1989, of any Federal or State offense involving the

distribution or possession of a controlled substance, or that I have

been so convicted, but I am not ineligible to receive Federal

benefits, either by court order or operation of law, pursuant to 21

U.S.C. 853a.

(b) The application shall contain applicants' entire case in

support of the proposed transaction, unless the Board finds, on its own

motion or that of a party to the proceeding, that additional

evidentiary submissions are required to resolve the issues in a

particular case.

(c) Any statements submitted on behalf of an applicant supporting

the application shall be verified, as provided in 49 CFR 1182.8(e).

Pleadings consisting strictly of legal argument, however, need not be

verified.

(d) If an application or supplemental pleading contains false or

misleading information, the granted application is void ab initio.

Sec. 1182.3 Filing the application.

cular case.

(c) Any statements submitted on behalf of an applicant supporting

the application shall be verified, as provided in 49 CFR 1182.8(e).

Pleadings consisting strictly of legal argument, however, need not be

verified.

(d) If an application or supplemental pleading contains false or

misleading information, the granted application is void ab initio.

Sec. 1182.3 Filing the application.

(a) Each application shall be filed with the Board, complying with

the requirements set forth at 49 CFR 1182.8.

(1) One copy of the application shall be delivered, by first-class

mail, to the appropriate regulatory body in each State in which any of

the parties operates in intrastate commerce.

(2) If the application involves the merger or purchase of motor

passenger carriers (contemplating transfer of operating authorities or

registrations from one or more parties to others), one copy of the

application shall be delivered, by first-class mail, to:

Chief, Lic. & Ins. Div., U.S.D.O.T. Office of Motor Carriers-HIA

30, 400 Virginia Ave. SW, Ste. 600, Washington, DC 20004

(b) In their application, the parties shall certify that they have

delivered copies of the application as provided in paragraph (a) of

this section.

Sec. 1182.4 Board review of the application.

(a) All applications will be reviewed for completeness. Applicants

will be given an opportunity to correct minor errors or omissions.

Incomplete applications may be rejected, or, if omissions are

corrected, the filing date of the application, for purposes of

calculating the procedural schedule and statutory deadlines, will be

deemed to be the date on which the complete information is filed with

the Board.

(b) If the application is accepted, a summary of the application

will be published in the Federal Register (within 30 days, as provided

by 49 U.S.C. 14303(c)), to give notice to the public, in the form of a

tentative grant of authority.

ses of

calculating the procedural schedule and statutory deadlines, will be

deemed to be the date on which the complete information is filed with

the Board.

(b) If the application is accepted, a summary of the application

will be published in the Federal Register (within 30 days, as provided

by 49 U.S.C. 14303(c)), to give notice to the public, in the form of a

tentative grant of authority.

(c) If the published notice does not properly describe the

transaction for which approval is sought, applicants shall inform the

Board within 10 days after the publication date.

(d) A copy of the application will be available for inspection at

the Board's offices in Washington, DC. Interested persons may obtain a

copy of the application from the applicants' representative, as

specified in the published notice.

Sec. 1182.5 Comments.

(a) Comments concerning an application must be received by the

Board within 45 days after notice of the application is published, as

provided by 49 U.S.C. 14303(d). Failure to file a timely comment waives

further participation in the proceeding. If no comments are filed

opposing the application, the published tentative grant of authority

will automatically become effective at the close of the comment period.

A tentative grant of authority does not entitle the applicant to

consommate the transaction before the end of the comment period.

(b) A comment shall be verified, as provided in 49 CFR 1182.8(e),

and shall contain all information upon which the commenter intends to

rely, including the grounds for any opposition to the transaction and

the commenter's interest in the proceeding.

(c) The docket number of the application must be conspicuously

placed at the top of the first page of the comment.

(d) A copy of the comment shall be delivered concurrently to

applicants' representative(s).

Sec. 1182.6 Processing an opposed application.

(a) If timely comments are submitted in opposition to an

application, the tentative grant of authority is void.

nterest in the proceeding.

(c) The docket number of the application must be conspicuously

placed at the top of the first page of the comment.

(d) A copy of the comment shall be delivered concurrently to

applicants' representative(s).

Sec. 1182.6 Processing an opposed application.

(a) If timely comments are submitted in opposition to an

application, the tentative grant of authority is void.

(b) Applicants may file a reply to opposing comments, within 60

days after the date the application was published.

(1) The reply may include a request for an expedited decision on

the issues raised by the comments. Otherwise, the reply may not contain

any new evidence, but shall only rebut or further explain matters

previously raised.

(2) The reply shall be verified, as provided in 49 CFR 1182.8(e),

unless it consists strictly of legal argument.

(3) Applicants' reply must be served on each commenter in such

manner that it is received no later than the date it is due to be filed

with the Board.

(4) Opposing commenters may reply to a request for an expedited

decision, within 70 days after notice of the application was published.

(c) The Board may

(1) Dispense with further procedings and make a final determination

based on the record as developed; or

(2) Issue a procedural schedule specifying the dates by which:

applicants may submit additional evidence in support of the

application, in response to the comment(s) in opposition; and the

opposing commentor(s) may reply.

(d) Further processing of an opposed application will be handled on

a case-by-case basis, as appropriate to the particular issues raised in

the comments filed in opposition to the application. Evidentiary

proceedings must be concluded within 240 days after publication of the

notice of the application.

Sec. 1182.7 Interim approval.

t(s) in opposition; and the

opposing commentor(s) may reply.

(d) Further processing of an opposed application will be handled on

a case-by-case basis, as appropriate to the particular issues raised in

the comments filed in opposition to the application. Evidentiary

proceedings must be concluded within 240 days after publication of the

notice of the application.

Sec. 1182.7 Interim approval.

(a) A party may request interim approval of the operation of the

properties sought to be acquired through the proposed transaction, for

a period of not more than 180 days pending determination of the

application. This request may be included in the application or may be

submitted separately after the application is filed (e.g., once a

comment opposing the application has been filed). An additional filing

fee is required, whether the request for interim approval is included

in the application or is submitted separately, at a later time. See 49

CFR 1002.2(f)(5) for the additional filing fee.

(b) A request for interim approval of the operation of the

properties sought to be acquired in the application must show that

failure to grant interim approval may result in destruction of or

injury to those properties or substantially interfere with their future

usefulness in providing adequate and continuous service to the public.

(c) If a request for interim approval is submitted after the

application is filed, it must be served on each person who files or has

filed a comment in response to the published notice of the application.

Service must be simultaneous upon those commenters who are known when

the request for interim approval is submitted; otherwise, service must

be within 5 days after the comment is received by applicants or their

representative.

is submitted after the

application is filed, it must be served on each person who files or has

filed a comment in response to the published notice of the application.

Service must be simultaneous upon those commenters who are known when

the request for interim approval is submitted; otherwise, service must

be within 5 days after the comment is received by applicants or their

representative.

(d) Because the basis for requesting interim approval is to prevent

destruction of or injury to motor passenger carrier properties sought

to be acquired under 49 U.S.C. 14303, the processing of such requests

is intended to promote expeditious decisions regarding interim

approval. The Board has no obligation to give public notice of requests

for interim approval, and such requests are decided without hearing or

other formal proceeding.

(1) If a request for interim approval is included in the

application, the Board's decision with regard to interim approval will

be served in conjunction with the notice accepting the application.

(2) If an application is rejected, the request for interim approval

will be denied.

(3) If an application is denied, after comments in opposition are

submitted, any interim approval will terminate 30 days after service of

the decision denying the application.

(e) A petition to reconsider a grant of interim approval may be

filed only by a person who has filed a comment in opposition to the

application.

(1) A petition to reconsider a grant of interim approval must be in

writing and shall state the specific grounds upon which the commenter

relies in opposing interim approval. The petition shall certify that a

copy has been served on applicants' representative.

(2) The original and 10 copies of the petition to reconsider a

grant of interim approval shall be filed with the Board, and one copy

of the petition shall be served on applicants' representative(s).

in

writing and shall state the specific grounds upon which the commenter

relies in opposing interim approval. The petition shall certify that a

copy has been served on applicants' representative.

(2) The original and 10 copies of the petition to reconsider a

grant of interim approval shall be filed with the Board, and one copy

of the petition shall be served on applicants' representative(s).

(f) The Board may act on a petition to reconsider a grant of

interim approval either separately or in connection with the final

decision on the application.

Sec. 1182.8 Miscellaneous requirements.

(a) If applicants wish to withdraw an application, they shall

jointly request dismissal in writing.

(b) An original and 10 copies of all applications, pleadings, and

other material filed under this part must be filed with the Board.

(c) All pleadings (including motions and replies) submitted under

this part shall be served on all other parties, concurrently and by the

same (or more expeditious) means with which they are filed with the

Board.

(d) Each pleading shall contain a certificate of service stating

that the pleading has been served in accordance with paragraph (c) of

this section.

(e) All applications and pleadings containing statements of fact

(i.e., except motions to strike, replies thereto, and other pleadings

that consist only of legal argument) must be verified by the person

offering the statement, in the following manner:

ch pleading shall contain a certificate of service stating

that the pleading has been served in accordance with paragraph (c) of

this section.

(e) All applications and pleadings containing statements of fact

(i.e., except motions to strike, replies thereto, and other pleadings

that consist only of legal argument) must be verified by the person

offering the statement, in the following manner:

I, [Name and Title of Witness], verify under penalty of perjury,

under the laws of the United States of America, that all information

supplied in connection with this application is true and correct.

Further, I certify that I am qualified and authorized to file this

application or pleading. I know that willful misstatements or

omissions of material facts constitute Federal criminal violations

punishable under 18 U.S.C. 1001 by imprisonment up to five years and

fines up to $10,000 for each offense. Additionally, these

misstatements are punishable as perjury under 18 U.S.C. 1621, which

provides for fines up to $2,000 or imprisonment up to five years for

each offense. [Signature and Date]

(f) If completion of a transaction requires the transfer of

operating authorities or registrations from one or more parties to

others, the parties shall comply with relevant procedures of State

authorities and of the Office of Motor Carriers of the U.S. Department

of Transportation, to accomplish such transfers.

PART 1187--[REMOVED]

4. Part 1187 is proposed to be removed.

PART 1188--[REMOVED]

5. Part 1188 is proposed to be removed.

[FR Doc. 97-17746 Filed 7-7-97; 8:45 am]

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