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Lease and Interchange of Vehicles; Motor Carriers of Passengers

American Government Special Collections Reference Desk

American Government Buses

Lease and Interchange of Vehicles; Motor Carriers of Passengers

Anne S. Ferro
Federal Motor Carrier Safety Administration
September 20, 2013


[Federal Register Volume 78, Number 183 (Friday, September 20, 2013)]
[Proposed Rules]
[Pages 57822-57835]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22782]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 390

[Docket No. FMCSA-2012-0103]
RIN 2126-AB44


Lease and Interchange of Vehicles; Motor Carriers of Passengers

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

ACTION: Notice of proposed rulemaking (NPRM); request for comment.

-----------------------------------------------------------------------

SUMMARY: FMCSA proposes to adopt regulations governing the lease and 
interchange of passenger-carrying commercial motor vehicles (CMVs) to: 
identify the motor carrier operating a passenger-carrying CMV and 
responsible for compliance with the Federal Motor Carrier Safety 
Regulations (FMCSRs) and all other applicable Federal regulations; 
ensure that a lessor surrenders control of the CMV for the full term of 
the lease or temporary exchange of CMVs and drivers; and require motor 
carriers subject to a prohibition on operating in interstate commerce 
to notify FMCSA in writing before leasing or otherwise transferring 
control of their vehicles to other carriers. This action is necessary 
to ensure that unsafe passenger carriers cannot evade FMCSA oversight 
and enforcement by operating under the authority of another carrier 
that exercises no actual control over those operations. This action 
will enable the FMCSA, the National Transportation Safety Board (NTSB), 
and our Federal and State partners to identify motor carriers 
transporting passengers in interstate commerce and correctly assign 
responsibility to these entities for regulatory violations during 
inspections, compliance investigations, and crash studies. It also 
provides the general public with the means to identify the responsible 
motor carrier at the time of transportation. While detailed lease and 
interchange regulations for cargo-carrying vehicles have been in effect 
since 1950, these proposed rules for passenger-carrying CMVs are 
focused entirely on operational safety.

DATES: You may submit comments by November 19, 2013.

ADDRESSES: You may submit comments identified by the docket number 
FMCSA-2012-0103 using any of the following methods:
     Web site: http://www.regulations.gov. Follow the

[[Page 57823]]

instructions for submitting comments on the Federal electronic docket 
site.
     Fax: 1-202-493-2251.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, Room W12-140, 1200 New Jersey Avenue SE., Washington, 
DC 20590-0001.
     Hand Delivery: Ground Floor, Room W12-140, DOT Building, 
1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m. 
e.t., Monday through Friday, except Federal holidays.
    To avoid duplication, please use only one of these four methods. 
See the ``Public Participation and Request for Comments'' portion of 
the SUPPLEMENTARY INFORMATION section below for instructions on 
submitting comments.

FOR FURTHER INFORMATION CONTACT: Mr. Wesley Barber, (202) 385-2400, 
wesley.barber@dot.gov. FMCSA office hours are from 9 a.m. to 5 p.m., 
e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

I. Public Participation and Request for Comments

    FMCSA invites you to participate in this rulemaking by submitting 
comments and related materials. All comments received will be posted 
without change to http://www.regulations.gov and will include any 
personal information you provide.

A. Submitting Comments

    If you submit a comment, please include the docket number for this 
rulemaking (FMCSA-2012-0103), indicate the specific section of this 
document to which each comment applies, and provide a reason for each 
suggestion or recommendation. You may submit your comments and material 
online or by fax, mail, or hand delivery, but please use only one of 
these means. FMCSA recommends that you include your name and a mailing 
address, an email address, or a phone number in the body of your 
document so that FMCSA can contact you if there are questions regarding 
your submission.
    To submit your comment online, go to http://www.regulations.gov and 
insert ``FMCSA-2012-0103'' in the ``Search'' box, and then click the 
``Search'' button to the right of the white box. Click on the top 
``Comment Now'' box which appears next to the notice. Fill in your 
contact information, as desired and your comment, uploading documents 
if appropriate. If you submit your comments by mail or hand delivery, 
submit them in an unbound format, no larger than 8\1/2\ by 11 inches, 
suitable for copying and electronic filing. If you submit comments by 
mail and would like to know that they reached the facility, please 
enclose a stamped, self-addressed postcard or envelope.
    We will consider all comments and material received during the 
comment period and may change this proposed rule based on your 
comments. FMCSA may issue a final rule at any time after the close of 
the comment period.

B. Viewing Comments and Documents

    To view comments, as well as any documents mentioned in this 
preamble, go to http://www.regulations.gov and insert ``FMCSA-2012-
0103'' in the ``Search'' box and then click on ``Search.'' Click on the 
``Open Docket Folder'' link and all the information for the notice, and 
the list of comments will appear with a link to each one. Click on the 
comment you would like to read. If you do not have access to the 
Internet, you may view the docket online by visiting the Docket 
Management Facility in Room W12-140 on the ground floor of the 
Department of Transportation West Building, 1200 New Jersey Avenue SE., 
Washington, DC 20590, between 9 a.m. and 5 p.m., e.t., Monday through 
Friday, except Federal holidays.

C. Privacy Act

    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the DOT 
Privacy Act Statement for the Federal Docket Management System 
published in the Federal Register on January 17, 2008 (73 FR 3316).

II. Executive Summary

A. Purpose of the Proposed Rule

    FMCSA proposes to adopt regulations governing the lease and 
interchange of passenger-carrying commercial motor vehicles (CMVs) to 
ensure that passenger carriers cannot evade FMCSA oversight and 
enforcement by operating under the authority of another carrier that 
exercises no actual control over these operations. The rule is based on 
the broad authority of the Motor Carrier Safety Act of 1984, as amended 
(49 U.S.C. 31136) and the Motor Carrier Act of 1935 (49 U.S.C. 
31502(b)).

B. Summary of the Major Provisions

    The rule would (1) Identify the motor carrier operating a 
passenger-carrying CMV and responsible for compliance with the Federal 
Motor Carrier Safety Regulations (FMCSRs) and all other applicable 
Federal regulations; (2) ensure that a lessor surrenders control of the 
CMV for the full term of the lease or temporary exchange of CMVs and 
drivers; and (3) require motor carriers subject to a prohibition on 
operating in interstate commerce to notify FMCSA in writing before 
leasing or otherwise transferring control of their vehicles to other 
carriers.

C. Costs and Benefits

    FMCSA estimated the costs of the rule for 3 levels of leasing 
activity (low, medium, and high) and 3 regulatory options. The Agency 
believes that the medium level of leasing activity is the most 
realistic, and is proposing to adopt regulatory Option Two. Under 
Option Two at medium leasing frequency, the ten-year discounted cost of 
the rule is $44.7 million at 7 percent or $4.4 million per year, or 
$53.1 million (at 3 percent), or $5.3 million per year). The numbers of 
fatal passenger carrier crashes that would have to be prevented under 
this option (at $19.9 million per crash) to equal the estimated 10-year 
costs of the rule--discounted at 7 percent and assuming medium 
frequency--is 2.25. Although the Agency lacks definitive data on the 
safety benefits of this NPRM, FMCSA believes that it is reasonable to 
assume that, if the proposed rule could prevent less than one fatal 
motorcoach CMV crash per year, or prevent the loss of less than one 
life per year (or 5.8 lives over ten years) under the preferred option 
(and under the most likely leasing frequency scenario), it would 
justify the cost of the rule.

III. Legal Basis for the Rulemaking

    This rule is based on the authority of the Motor Carrier Safety Act 
of 1984 (1984 Act), as amended, and the Motor Carrier Act of 1935 (1935 
Act).
    The 1984 Act confers on the Department of Transportation (DOT) 
authority to regulate drivers, motor carriers, and vehicle equipment. 
``At a minimum, the regulations shall ensure that--(1) Commercial motor 
vehicles are 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)). Sec. 32911 of the Moving Ahead for Progress in the 21st 
Century

[[Page 57824]]

Act (MAP-21) [Pub. L. 112-141, 126 Stat. 405, July 6, 2012] recently 
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)].
    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)).
    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 
operations'' (49 U.S.C. 31502(b)).
    This rule would impose legal and recordkeeping requirements 
consistent with the 1984 and 1935 Acts on for-hire and private 
passenger carriers that operate CMVs, in order to enable the general 
public and investigators to identify the passenger carrier responsible 
for safety. Currently, passenger-carrying CMVs and drivers are 
frequently rented, loaned, leased, interchanged, assigned, and 
reassigned with few records and little formality, thus obscuring the 
operational safety responsibility of many industry participants. 
Because this rule would have 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, in contravention 
of 49 U.S.C. 31136(a)(5), will not occur.
    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 also discussed in this proposed rule.

IV. History of Past Actions

A. History of Leasing Rules

    In 1940, the former Interstate Commerce Commission (ICC) began an 
investigation of vehicle leasing and interchange practices. In 1950, 
the Commission adopted regulations governing the lease and interchange 
of trucks and trailers which are now codified in 49 CFR part 376 [See 
51 M.C.C. 461 (June 26, 1950) and 15 FR 4338, July 8, 1950]. Although 
these regulations served safety purposes, as indicated below, they were 
designed mainly to improve the enforcement of the comprehensive 
economic regulations of the trucking industry then in effect.
    The ICC discussed the safety implications of motor carrier lease 
agreements in its landmark 1948 decision, Performance of Motor Common 
Carrier Service by Riss & Co., 48 M.C.C. 327, 360:

    In any case of a person claiming to be a motor carrier through 
the use of the vehicles of others, it is of the utmost importance to 
regulation that it have and exercise direction and control of the 
operation and of the persons engaged therein. For otherwise an 
unworkable situation is created, that is, one, for example, in which 
neither the Commission nor the person claiming to be the carrier 
would have any immediate and direct control over safety, hours of 
service of employees, and other matters pertaining to safe, 
adequate, and efficient service, and the safe operation of vehicles 
on the highways, all of which were intended by the [Motor Carrier 
Act of 1935]. In other words, as to these important features of 
motor carrier operation, our regulation thereof, as required by the 
act, would be negatived to an inoperative degree, as the actual 
operator would not be subject to our regulations or to the direction 
and control of the person claiming to be the carrier and subject to 
our jurisdiction.
    The importance which Congress attached to the safety provisions 
* * * of the act is plainly shown by the fact that while ``Section 
203(b) listed many types of [for-hire] motor carriers which were 
exempted in general from the act [now codified at 49 U.S.C. 13506] * 
* * that section significantly applied to all of them the provisions 
of Section 204 as to qualifications, maximum hours of service, 
safety of operation and equipment.'' Levinson v. Spector Motor Co., 
330 U.S. 649, 650.

    Since 2008, FMCSA and NTSB have discovered many instances of motor 
carriers renting or leasing passenger-carrying CMVs without written 
documentation. Many of these cases reveal exactly the problems the ICC 
discussed in its 1948 decision. The lease or rental agreements are 
often made so casually that the parties themselves have no clear 
understanding of who is responsible for operational safety and 
regulatory compliance on a given trip with a particular passenger-
carrying CMV. As a result, the general public and enforcement officials 
struggle to clarify these relationships and to assign regulatory 
violations to the correct party. Without the ability to reliably make 
such determinations, FMCSA is unable to apply its safety standards 
consistently and effectively during inspections, compliance 
investigations, and crash studies, and, when necessary, place high-risk 
operators out of service (OOS).
    In recent years, FMCSA and NTSB have discovered leasing practices 
that undermined enforcement of many regulations based on the 1984 Act. 
For example, passengers, and even the drivers, often do not know which 
FMCSA-authorized motor carrier is operating the vehicle and responsible 
for safety. The owner of a passenger-carrying CMV may place its USDOT 
number on the vehicle, as required by 49 CFR 390.21, but that motor 
carrier may not have actual control of, and responsibility for, the 
vehicle at the time of an inspection, investigation, or crash.
    The FMCSA uses the USDOT number to track carrier performance, 
primarily via its management information systems. These systems contain 
motor carrier data from a variety of sources: roadside inspections, 
crash reports, safety and compliance investigations, and enforcement 
actions. Using the USDOT number, the public can also access critical 
information about a passenger-carrying CMV operator's safety and 
compliance record. This information is provided both on the FMCSA Web 
site and through the Agency's free SaferBus application available to 
Google Android users and Apple iPhone and iPad users from the 
respective App Stores, or by going to the FMCSA's ``Look Before You 
Book'' Web site at www.fmcsa.dot.gov/saferbus.
    The Agency's various management information systems are the 
linchpins of a number of the FMCSA's programs. Federal and State field 
personnel use these systems to initiate actions as varied as 
enforcement and educational outreach. By using the data, potentially 
unsafe carriers can be targeted for attention, including compliance 
investigations. Carriers could be flagged as unsafe if a high 
percentage of their vehicles were placed OOS during roadside safety 
inspections, or if they experience an above-average number of crashes. 
FMCSA staff use the databases for analysis purposes, including 
monitoring overall trends and evaluating general program effectiveness.
    The delivery of FMCSA's safety program can be impacted by the 
similarity of many carrier names (legal, trade, and doing-business-as 
(DBA) names), the lack of consistency in the display of those names on 
vehicles, and even more so by the wrong name or USDOT number on the 
passenger-carrying CMV. These identification problems could result in 
attributing a

[[Page 57825]]

crash or roadside inspection to the wrong motor carrier. This means 
that FMCSA is not fully aware of some carriers' safety performance, 
especially those that lease vehicles from other carriers. These 
carriers may not receive the remedial attention their records warrant, 
whether it be educational assistance or a compliance investigation. If 
the Agency had better performance data on marginal carriers, some 
crashes associated with these operations might be prevented.
    In order to aggregate information about a single motor carrier from 
disparate sources, a unique identifier is required. That is the 
function of the USDOT number. Without this number, there is no reliable 
way to assign crashes, inspections, and other events to the correct 
motor carrier.

B. NTSB Crash Investigations

Motorcoach Rollover on U.S. Highway 59 Near Victoria, Texas, January 2, 
2008 \1\
---------------------------------------------------------------------------

    \1\ National Transportation Safety Board. 2009. Motorcoach 
Rollover on U.S. Highway 59 Near Victoria, Texas, January 2, 2008. 
Highway Accident Summary Report. NTSB/HAR-09/03/SUM. Washington, DC.
---------------------------------------------------------------------------

    On January 2, 2008, a fully-loaded 47-passenger CMV was heading 
north on U.S. 59 about 5 miles south of Victoria, Texas, when it 
drifted off the right edge of the roadway. The driver over-corrected 
and the passenger-carrying CMV rolled onto its right side, killing one 
passenger and injuring 46.
    The NTSB crash investigation identified a number of safety issues, 
including the lack of Federal oversight of passenger motor carrier 
leasing agreements and the registration and use of passenger-carrying 
CMVs that do not comply with the National Highway Traffic Safety 
Administration's (NHTSA) Federal Motor Vehicle Safety Standards 
(FMVSS). The NTSB report noted that ``[t]he owner of the motor carrier 
in this accident [Capricorn Bus Lines, Inc. (Capricorn)], unable to 
obtain the insurance that would have enabled him to receive [FMCSA 
operating] authority to transport passengers as a motor carrier, 
entered into a lease with another authorized motor carrier 
[International Charter Services, Inc. (International)] in order to 
continue to operate his business under the other carrier's authority. 
[The NTSB investigation] explore[d] how this process worked and how the 
process shielded the accident motor carrier from effective safety 
oversight.''
    The NTSB report also noted that ``Capricorn's lease with 
International constituted an arrangement enabling Capricorn to operate 
virtually independently, without operational control from 
International. Based on information obtained during this [crash] 
investigation, Capricorn was never required to demonstrate to the FMCSA 
that it was capable of safety fitness as required of a motor carrier; 
the lease agreement effectively kept Capricorn's operations at arm's 
length from International and shielded Capricorn from appropriate FMCSA 
oversight. In examining the FMCSA's definitions of a motor carrier and 
the companies' roles as outlined in the lease agreement, it is evident 
Capricorn was operating independently from International as a motor 
carrier. The owner of International had certified on the application 
for operating authority it would have in place a system for the safe 
operation of commercial vehicles, specifically `policies and procedures 
consistent with DOT regulations governing driving and operational 
safety of motor vehicles, including driver's hours of service and 
vehicle inspection and repair and maintenance.' Multiple critical and 
acute safety violations were found during International's compliance 
review when the FMCSA examined Capricorn's vehicles and drivers, 
showing that International was not ensuring that the FMCSRs were being 
followed and that International did not have a system in place for 
making sure Capricorn's operations followed the FMCSRs. The NTSB 
therefore concludes that International failed to maintain operational 
control and safety oversight of Capricorn's operations, including its 
drivers and vehicles, as required by the safety certification completed 
by International in its operating authority application (Form OP-1[P], 
section 4).'' See page 26.
    The NTSB issued a total of ten safety recommendations to FMCSA as a 
result of the Victoria, TX, crash, of which, the following are related 
to this NPRM:
    H-09-33: Revise 49 CFR part 376 to require that passenger motor 
carriers be subject to the same limitations on the leasing of equipment 
as interstate for-hire motor carriers of cargo.
    H-09-36: ``Establish a requirement to review all passenger carrier 
lease agreements during new entrant safety audits and compliance 
reviews to identify and take action against carriers that have lease 
agreements that result in a loss of operational control by the 
certificate holder.''
Motorcoach Run-Off-the-Bridge and Rollover Near Sherman, Texas, August 
8, 2008 \2\
---------------------------------------------------------------------------

    \2\ National Transportation Safety Board. 2009. Motorcoach Run-
Off-the-Bridge and Rollover, Sherman, Texas, August 8, 2008. Highway 
Accident Report NTSB/HAR-09/02. Washington, DC.
---------------------------------------------------------------------------

    On August 8, 2008, a 56-passenger CMV was traveling northbound on 
U.S. 75 when the CMV's right front tire failed in Sherman, Texas. The 
vehicle slid off a bridge, killing 17 passengers and injuring 38.
    The NTSB investigation found that Iguala BusMex, Inc. was operating 
the passenger-carrying CMV that crashed. The owner of Iguala BusMex 
also owned Angel Tours, Inc., a motor carrier that operated from the 
same address. Angel Tours had received operating authority in 1994.
    Three months before the crash, FMCSA conducted a compliance review 
of Angel Tours on May 1, 2008, which resulted in a proposed 
unsatisfactory safety rating. Three critical violations were found, as 
well as several other violations. Angel Tours had 45 days to submit a 
corrective action plan to the FMCSA to change its proposed 
unsatisfactory safety rating as allowed by 49 U.S.C. 31144(c)(2) and 49 
CFR 385.11 and 385.17. FMCSA placed Angel Tours out of service on June 
23, 2008, because it had not submitted a corrective action plan to the 
FMCSA to change its proposed unsatisfactory safety rating. \3\
---------------------------------------------------------------------------

    \3\ Angel Tours submitted an action plan on June 24, 2008, but 
FMCSA denied its request to change its rating due to the lateness of 
the submission and the inadequacy of the response. A review of the 
Angel Tours driver logbook records revealed several trips in 
interstate travel after the FMCSA had placed the motor carrier out 
of service.
---------------------------------------------------------------------------

    Just over a month later, on July 27, 2008, the owner of these 
companies applied to the FMCSA for motor carrier operating authority 
for Iguala BusMex, Inc. On the date of the crash, the FMCSA had not 
granted operating authority to Iguala BusMex because its application 
was incomplete. The owner of Iguala BusMex had an unsigned lease 
arrangement with Liberty Charters and Tours (Liberty) to provide 
drivers and passenger-carrying CMVs to Liberty. The FMCSA's post-crash 
compliance review found that Iguala BusMex used Liberty's operating 
authority and USDOT number to engage in the for-hire transportation of 
passengers in interstate commerce during the Sherman, TX, crash.
    FMCSA also found that Angel Tours' continuity of operation through 
Iguala BusMex demonstrated a blatant disregard for previous FMCSA out-
of-service orders, which were issued based

[[Page 57826]]

upon the company's substandard safety record. The FMCSA conducted a 
compliance review of Liberty on August 11, 2008, and found an unsigned 
vehicle lease agreement between Liberty and Angel Tours, covering the 
period from June 28 through September 28, 2008. The compliance review 
also stated that the owner of Liberty had agreed to let the owner of 
Iguala BusMex and Angel Tours use Liberty's operating authority to 
engage in interstate commerce.
    Although no specific NTSB Safety Recommendation to FMCSA relevant 
to leases was made as a part of this crash investigation, similar 
leasing problems were discovered that suggested that Iguala BusMex used 
Liberty's operating authority and USDOT number to engage in the for-
hire transportation of passengers in interstate commerce during the 
Sherman, TX, crash. In this regard NTSB Safety Recommendation H-09-36, 
made as a result of the Victoria, TX, crash also addresses the 
situation where a carrier, like Iguala BusMex/Angel Tours, that 
nominally leases its vehicles and drivers to another carrier, in fact 
maintains full control of both in order to evade oversight or sanctions 
by FMCSA.

V. Proposal

    In order to eliminate the problems discussed above and improve the 
safety of the traveling public, FMCSA proposes to amend its safety 
regulations in part 390 to:
    (1) Require interstate carriers of passengers by CMV that enter 
into rental or lease agreements (except leases in the nature of a 
purchase), or that borrow or temporarily exchange CMVs with or without 
compensation, to execute a written lease similar to those required of 
for-hire interstate carriers of property;
    (2) require that lessors relinquish all control of a passenger-
carrying CMV for the full term of the lease;
    (3) require that a copy of the signed agreement or other documents 
specified in the proposal be carried on all leased passenger-carrying 
CMVs for the duration of the agreement;
    (4) require lessee and lessors to give receipts when they exchange 
possession and retain the receipts for one year after the end of the 
lease or other agreement;
    (5) require passenger-carrying CMVs operated under a lease or other 
agreement to display the operating motor carrier's name and USDOT 
number;
    (6) require the lease or other agreement to specify that the lessee 
is responsible for compliance with the bodily injury and property 
damage insurance requirements of part 387, and to specify the party 
responsible for any additional insurance coverage that may be required 
by the parties;
    (7) require that the parties to the agreement retain a copy of each 
lease or other agreement for one year after the end of the agreement; 
and
    (8) require motor carriers of passengers prohibited from operating 
in interstate commerce to notify FMCSA in writing before leasing or 
otherwise transferring control of their vehicles to any other motor 
carriers.
    Although NTSB recommended that FMCSA amend its 49 CFR part 376 
regulations applicable to motor carriers of property to include 
passenger-carrying CMVs, those regulations are based on 49 U.S.C. 
14102(a), which authorizes leasing regulations applicable to property-
carrying vehicles, but not to passenger vehicles.
    The passenger-carrying CMV leasing and marking issues discussed in 
this proposal demonstrate a clear nexus between safety and the 
identification of a motor carrier operating any passenger-carrying CMV, 
whether or not the motor carrier operates for compensation. Thus, FMCSA 
proposes to amend part 390 of the FMCSRs, not part 376. Placing the 
proposed rules in part 390 would also require the Agency's State 
partners to adopt them pursuant to the Motor Carrier Safety Assistance 
Program (MCSAP) (49 CFR part 350). State and local agencies 
participating in MCSAP would be required to include the passenger-
carrying CMV lease and marking requirements of this proposed rule in 
their annual enforcement plans. Our MCSAP partners have never been 
required to enforce the CMV leasing regulations in part 376; this NPRM 
would not change that. However, the focus of the current proposal is 
safety, and FMCSA believes that States should be required to adopt and 
enforce compatible leasing and marking regulations for all motor 
carriers operating passenger-carrying CMVs in interstate commerce.
    The primary purpose of the Agency notification provision is to 
allow FMCSA time to research the safety history of the prospective 
lessee, if necessary, before the lease occurs. For example, if the OOS 
passenger carrier intended to lease its buses to a motor carrier that 
was itself undergoing an investigation or compliance review, was 
subject to an enforcement action, or was otherwise implicated in a 
serious safety matter, the Agency might wish to consider additional 
oversight of the proposed lessee. Requiring the OOS carrier to provide 
at least 3 business days advance notice by email, or at least 5 
business days advance notice by U.S. Mail, before the transfer of 
control occurs would give FMCSA adequate time to plan and implement any 
steps it deemed necessary. Business days are Monday through Friday, 
excluding Federal holidays.
    FMCSA invites you to participate in this rulemaking by submitting 
comments on any aspect of this proposal.

VI. Section-By-Section Description of NPRM

    Section 390.5 is amended to add definitions for lease, lessee, and 
lessor, all of which are based (with changes) on the same definitions 
in part 376--Lease and Interchange of Vehicles. Since both parties to 
the lease required by subpart F of part 390 are motor carriers of 
passengers, rather than owners of equipment (as in part 376), the terms 
lease, lessee, and lessor here apply specifically to motor carriers of 
passengers. All three terms are amended to include interchange of 
passenger-carrying CMVs. In Sec.  390.5, interchange is currently 
defined as the tendering of intermodal chassis to a motor carrier; that 
meaning is retained as paragraph (1), and paragraph (2) is added to 
describe the exchange of passenger-carrying CMVs between motor carriers 
continuing a through movement on a particular route. We have also 
included a cross-reference to Sec.  376.2, where the same terms are 
defined for purposes of the lease and interchange of property-carrying 
vehicles.
    Section 390.21(e), dealing with the marking of Rented CMVs, is 
amended to limit its application to ``property-carrying CMVs,'' and 
Sec.  390.21(f) is added to cover the marking of Leased and 
interchanged passenger-carrying CMVs. The marking must meet the 
requirements of Sec.  390.21(b) Nature of marking, (c) Size, shape, 
location, and color of marking, except that marking is required only on 
the right (curb) side of the vehicle on or near the front passenger 
door, and (d) Construction and durability. Carriers operating leased or 
interchanged passenger-carrying CMVs as defined in proposed Sec.  390.5 
would be required to also display a placard, sign, or other permanent 
or removable device on the right (curb) side of the passenger-carrying 
CMV on or near the front passenger door. The device must show the name 
and USDOT number of the carrier operating the vehicle, preceded by the 
words ``operated by,'' e.g., ``Operated by ABC Motorcoach, Inc., USDOT 
1234567890.''
    The NPRM adds to part 390 a new subpart F entitled, ``Lease and 
Interchange of Passenger-Carrying Commercial Motor Vehicles.'' The 
``Applicability'' statement in

[[Page 57827]]

Sec.  390.301(a) makes clear that the subpart applies to every short- 
and mid-term lease or interchange of passenger-carrying CMVs between 
motor carriers, no matter how brief. Paragraph (b), however, explains 
that the rule does not cover leases between carriers and vehicle 
manufacturers or dealers that run 5 years or more because these 
contracts are almost certainly in the nature of purchase agreements, 
unlike the routine or casual transfers of vehicles between passenger 
carriers to meet temporary fluctuations in demand.
    Section 390.303 specifies the contents of lease and interchange 
documents. Paragraph (a) requires a written lease or interchange 
document, or a written agreement covering some less formal temporary 
transfer, such as a hand-shake or other casual form of obtaining a 
passenger-carrying CMV. Paragraph (b) requires the lease, interchange, 
or other agreement to be signed by the owner of the passenger-carrying 
CMV and the motor carrier obtaining the use of the CMV, or by their 
authorized agents. Under paragraph (c), the lease, interchange, or 
other document must include the time (hour and minute) and location 
where the agreement begins and ends. The time and location must match 
the time and location for giving receipts. Paragraph (d) requires the 
lessee to give the lessor a receipt for a passenger-carrying CMV when 
it takes possession, and the lessor to give the lessee a receipt for a 
passenger-carrying CMV when it recovers possession at the end of the 
agreement. Receipts may be transmitted electronically. Because the 
parties to an interline agreement or to a revenue pooling agreement 
(which must be approved by the Surface Transportation Board; see 49 
U.S.C. 14302) interchange vehicles frequently and routinely in the 
course of providing service on a single route, each party may surrender 
control of a vehicle to its interline partner for a portion of that 
trip. As part of these joint operating agreements, receipts are not 
required for such interchanges. Receipts applicable to a specific lease 
or other agreement must be maintained for one year after the end of the 
agreement as required by paragraph (i). Paragraph (e) requires 
passenger-carrying CMVs operated under a lease, interchange, or other 
agreement to be marked as required by proposed Sec.  390.21(f) and to 
carry a copy of the lease, interchange, or other agreement in the 
vehicle. The lease need not be specific to that vehicle; a copy of a 
master lease covering several vehicles is acceptable, but must be 
carried in each leased vehicle. Instead of an interchange agreement, 
which may be quite long, a written statement can be carried in the 
interchanged vehicle if it identifies the carrier operating the 
passenger-carrying CMV by company name and USDOT number, provides when 
and where the interchange will occur, and indicates how the CMV will be 
used (e.g., line service between X and Y). Paragraph (f) requires the 
lease, interchange, or other agreement to state that the party 
obtaining the passenger-carrying CMV has exclusive possession and 
control, and assumes full responsibility for compliance with the FMCSRs 
and any other applicable Federal regulations for the duration of the 
lease. Subleasing is allowed, but the requirements of Sec.  390.303 
apply to the parties to a sublease. Paragraph (g) requires the lease, 
interchange, or other agreement to make the lessee responsible for 
compliance with the insurance requirements of 49 CFR part 387. The 
lease, interchange, or other agreement must also specify which party is 
responsible for any additional insurance coverage that may be required 
by the parties. Paragraph (h) requires the parties to keep an original 
and two copies of each lease, interchange, or other agreement. One copy 
of the document must be carried in the passenger-carrying CMV, except 
as otherwise provided in paragraph (e)(2). Paragraph (i) requires the 
parties to retain a copy of each lease, interchange, or other 
agreement, and the corresponding receipts required in paragraph (d), 
for one year after the end of the agreement.
    Section 390.305 requires a motor carrier of passengers that has 
been prohibited from operating in interstate commerce to notify FMCSA 
of its intention to transfer control of one or more passenger-carrying 
vehicles to another passenger carrier. Notification by email must be 
provided at least 3 business days, and notification by U.S. Mail at 
least 5 business days, before the transfer of control occurs.

VII. Regulatory Analyses

A. Regulatory Planning and Review

    FMCSA has preliminarily determined that this action is a 
``significant regulatory action'' under Executive Order 12866, as 
supplemented by Executive Order 13563 (76 FR 3821, January 18, 2011), 
and DOT regulatory policies and procedures (44 FR 1103, February 26, 
1979). Although the estimated economic costs of the rule do not exceed 
the $100 million annual threshold, the Agency expects the rule to have 
substantial Congressional and public interest based on recent crashes 
and the recommendation from the NTSB that the Agency regulate 
passenger-carrier leasing. This rule has been reviewed by the Office of 
Management and Budget (OMB).
    Due to the lack of data that would allow FMCSA to quantify the 
safety benefits of this NPRM, the regulatory evaluation develops a 
threshold analysis. There are no statistical or empirical studies that 
directly link the written documentation of a vehicle lease agreement to 
increased motor carrier safety. And though the Agency has described 
above the many practical, informational, and administrative benefits of 
this NPRM, it is unable to quantify its safety benefits, typically 
measured in terms of avoided crashes. In accordance with OMB guidance 
(Circular A-4),\4\ a Federal regulatory agency has the option to 
conduct a threshold analysis in lieu of a cost-benefit analysis in 
cases in which either benefits (as in this case) or the costs are 
unquantifiable, or difficult to quantify. A threshold analysis states 
the estimated quantified costs of a rule in terms of the non-quantified 
benefits (the number of fatalities prevented in motorcoach crashes) 
that would have to be realized to equal the costs. The proposed rule is 
expected to provide safety benefits that are not directly or easily 
quantifiable. Hence, the estimated costs of the various regulatory 
options in this NPRM are compared to the number of passenger-carrier 
fatal crashes that would have to be avoided to make the rule cost-
neutral. FMCSA estimates the societal cost of each fatal motorcoach 
crash at $19.9 million.\5\
---------------------------------------------------------------------------

    \4\ www.whitehouse.gov/omb/circulars_a004_a-4.
    \5\ FMCSA estimation (2012 dollars). The estimated cost is a 
five-year average (2007-2011) which consists of the costs of 
fatalities and injuries (associated with fatal crashes), plus 
medical, emergency services, property damage, congestion and 
pollution. See Appendix A--Motorcoach Crash Cost Estimation 
Methodology at the end of the Preliminary Regulatory Evaluation for 
this proceeding for a detailed analysis of this estimate. The 
Preliminary Regulatory Evaluation for this proceeding may be found 
in the docket.
---------------------------------------------------------------------------

    Additionally, the NPRM is expected to provide many practical 
benefits to the public and to FMCSA. These benefits include proper 
identification of passenger carriers and the proper documentation of 
their lease agreements--both of which ensure accurate identification of 
the carrier responsible and liable for operation of the vehicle--as 
well as efficient oversight and more effective enforcement. 
Additionally, proper marking of vehicles provides beneficial 
information to the traveling public, and State and Federal enforcement 
personnel.

[[Page 57828]]

Passenger Carriers Subject to This Proposal
    FMCSA estimates that 6,328 passenger carriers will be affected by 
this rule.
    The threshold analysis considers three scenarios \6\ intended to 
capture the possible variations in leasing frequency. The scenarios are 
based on the frequency with which a hypothetical passenger carrier with 
10 power units leases other passenger-carrying power units. The rates 
are: (1) Low frequency, (2) medium frequency, and (3) high frequency. 
The frequency assumptions are listed below in Table 1. FMCSA welcomes 
public comments on these assumptions.
---------------------------------------------------------------------------

    \6\ FMCSA and contacts with industry.

                                                         Table 1--Leasing Frequency Assumptions
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Lease/Trip Frequency                                                 Number of leases per month and year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Frequency......................  6 leases per month....  Peak months...........  May-August...........  24 leases............  Total/year = 48.
                                     3 leases per month....  Off peak months.......  Other months.........  24 leases............
Medium Frequency...................  12 leases per month...  Peak months...........  May-August...........  48 leases............  Total/year = 96.
                                     6 leases per month....  Off peak months.......  Other months.........  48 leases............
High Frequency.....................  24 leases per month...  Peak months...........  May-August...........  96 leases............  Total/year = 192.
                                     12 leases per month...  Off peak months.......  Other months.........  96 leases............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: FMCSA Commercial Passenger Carrier Safety division staff experience.

Estimated Costs

    The cost components of the Agency's proposal (Option Two in the 
regulatory evaluation below) consist of the following: (1) Lease 
negotiation and documentation, (2) Lease copying, (3) Receipt 
documentation, and (4) Vehicle marking. The analysis also provides a 
cost estimate of the impact on passenger carriers that have been placed 
OOS and would be required to notify the Agency of vehicle rentals and 
leases they intend to make to others. The analysis considers different 
rates of leasing frequency to allow for the variation in passenger 
carrier operations. Lease negotiation, for the purpose of this 
analysis, consists of a one-time negotiation cost reflective of the 
value of a half hour of a manager's time, plus the recurring cost of 
preparing the written documentation of the requisite information and 
signature of the lease agreement undertaken in five minutes. These 
tasks are assumed to be undertaken by a manager, supervisor, or a 
designated company employee who can make a contract on behalf of the 
carrier. The analysis applies a median hourly supervisory wage rate of 
$25.45, plus 50 percent mark-up to account for fringe benefits (for a 
total hourly wage of $38.18). The negotiation cost per contract in 
terms of the value of time per contract amounts to $19.09 (50 percent 
of the wage rate). The lease documentation assumes a time burden of 
five minutes, which would amount to one twelfth (1/12) of the hourly 
wage rate which equals $3.18. This cost is applied to both the lessee 
and the lessor. The estimated unit-cost of copying one lease agreement 
double-sided (i.e., a two page agreement) is at $0.15. The estimated 
unit-cost corresponding to the lease receipts is $0.30. This assumes 
two transactions, and hence two receipts: One for the delivery (or 
surrender) of the vehicle and one for the return of the vehicle. The 
fourth cost component is the marking cost, which is estimated using a 
paper sign, the cheapest possible option, costs the lessee $0.02. This 
is calculated as follows: (1) Letter-size paper costs $4.74 per ream of 
400 sheets,\7\ and the cost of 2 sheets is therefore $0.024; (2) Legal-
size paper costs $6.49 per ream of 500 sheets, and the cost per sheet 
is therefore $0.013. The per-unit average cost of the two options is 
$0.018, which is then rounded up to $0.02 to account for the cost of 
adhesive. The total per unit cost of all four components is therefore 
$7.28,\8\ which is the sum of $3.18 (x 2) + $0.30 + $0.60 + $0.02. 
Following, in Table 2, is an example of the calculation of total costs 
for Year 1 for one scenario: Medium leasing frequency.
---------------------------------------------------------------------------

    \7\ Reams of letter-sized paper typically come in 500 sheets. 
The analysis is based on a ream of 400 sheets of heavier paper 
(better suited for marking purposes).
    \8\ This per-unit cost may be less assuming that a durable 
marking sign could be re-used multiple times, a receipt could be 
combined with a lease copy, and preparation time for a lease could 
be reduced through the use of generic or master-type lease forms.

                                                         Table 2--Example--Year 1 Estimated Cost
                                                 [Option two, medium leasing frequency scenario--at 3%]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Number of                                                  Receipt                        Total recurring costs
         Passenger carriers               leases        Lease documentation       Lease copy     documentation     Marking cost             (A)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6,328...............................         607,488  $3,863,624.............        $182,246         $364,493          $12,150   $4,422,513.
                                                      Lease Negotiation (B)..  ...............  ...............  ...............  Total Cost (A+B).
6,328...............................         607,488  $23,193,892............  ...............  ...............  ...............  $27,616,405.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Total Cost = (607,488 x $3.18 x 2) + (607,488 x 2 x $0.15) + (607,488 x 
2 x $0.30) + (607,488 x $0.02) = $3,863,624 + $182,246 + $364,493 + 
$12,150 = $4,422,513 + $23,193,892 = $23,193,892.

    The results of the threshold analysis for Options Two and Three are 
summarized below in Table 3. Under Option Two (the Agency's preferred 
option), the ten-year discounted cost, at medium leasing frequency, is 
$53.1 million (at 3%), which amounts to approximately $5.3 million per 
year ($44.7 million at 7% or $4.4 million per year). The numbers of 
fatal passenger carrier crashes \9\ that would have to be prevented 
under this option (at $19.9

[[Page 57829]]

million per crash) \10\ to equal the estimated 10-year costs of the 
rule--discounted at 3% and assuming low, medium, and high leasing 
frequencies--are 1.33, 2.67 (or 5.8 lives over ten years),\11\ and 
5.34, respectively. The comparable numbers of fatal crashes that would 
have to be prevented under Option Three, assuming the same leasing 
frequencies and discount rate, would be 2.15, 4.30, and 8.60. Table 3 
also provides 10-year cost estimates (and the related number of fatal 
crashes) with a 7% discount rate. Although the Agency lacks definitive 
data on the safety impacts of this rule, the Agency believes it is 
reasonable to assume that if the proposed rule could prevent less than 
one fatal motorcoach crash per year, or prevent the loss of less than 
one life per year (or 5.8 lives over ten years) under the preferred 
option (and under the most likely leasing frequency scenario), it would 
justify the cost of the rule.
---------------------------------------------------------------------------

    \9\ FMCSA has also determined costs for average injury and PDO 
crashes. Any combination of crashes prevented equaling $5.3 million 
annually would produce a break-even cost.
    \10\ The estimated cost is a five-year average (2007-2011) which 
consists of the costs of fatalities and injuries (associated with 
fatal crashes), plus medical, emergency services, property damage, 
congestion and pollution. For more information see Appendix A of the 
Lease and Interchange of Vehicles; Motor Carriers of Passengers, 
Preliminary Regulatory Evaluation, FMCSA, July 2013, in the docket.
    \11\ Medium leasing frequency 10-year cost of $53.1 million 
divided by the value of a statistical life (VSL) of $9.1 million 
results in 5.8 lives prevented over ten years.

                                 Table 3--Threshold Analysis--Summary of Results
----------------------------------------------------------------------------------------------------------------
                                                                     Number of                       Number of
                                                   Estimated 10-       fatal       Estimated 10-       fatal
                                                       year          passenger         year          passenger
                                                    discounted        carrier       discounted        carrier
                                                    costs * 3%     crashes ** to    costs * 7%     crashes ** to
                                                                   be prevented                    be prevented
----------------------------------------------------------------------------------------------------------------
                                     Option Two (Agency's Preferred Option)
----------------------------------------------------------------------------------------------------------------
Low Leasing Frequency...........................     $26,564,644            1.33     $22,364,121            1.12
Medium Leasing Frequency........................      53,116,130            2.67      44,728,241            2.25
High Leasing Frequency..........................     106,258,577            5.34      89,456,483            4.50
----------------------------------------------------------------------------------------------------------------
                                                  Option Three
----------------------------------------------------------------------------------------------------------------
Low Leasing Frequency...........................     $42,788,991            2.15     $34,035,279            1.71
Medium Leasing Frequency........................      85,577,989            4.30      68,226,250            3.43
High Leasing Frequency..........................     171,155,971            8.60     136,452,492            6.86
----------------------------------------------------------------------------------------------------------------
* Costs include a one-time lease negotiation cost applied to Year 1.
** The estimated value of a passenger-carrier fatal crash is $19.9 million (2012 dollars).

    Please review the Preliminary Regulatory Evaluation in docket 
FMCSA-2012-0103 for a thorough discussion of the assumptions the Agency 
made, the options/alternatives considered in developing this proposed 
rule, the analysis conducted, and the details for the estimates 
presented here. FMCSA welcomes public comments on any aspect of the 
Preliminary Regulatory Evaluation for this proposal.

B. Regulatory Flexibility Act

    Section 603 of the Regulatory Flexibility Act (RFA), as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 
104-121, 110 Stat. 857, March 29, 1996), requires FMCSA to perform a 
detailed analysis of the potential impact of the proposed rule on small 
entities. Accordingly, DOT policy requires that agencies shall strive 
to lessen any adverse effects on these businesses and other entities. 
Each initial regulatory flexibility analysis required under this 
section must contain the following:
Initial Regulatory Flexibility Analysis (IRFA)
    (1) A description of the reasons why action by the agency is being 
considered.
    Passenger carriers lease, rent, interchange, and loan passenger-
carrying CMVs to each other with great frequency, on short notice, and 
often for short periods of time and with minimal legal formality. As a 
result, it is difficult for the general public and enforcement 
personnel to determine which carrier is actually operating the 
passenger-carrying CMV and responsible for compliance with safety 
regulations. The written lease required by this NPRM for all 
transactions involving the renting, leasing, interchanging, and loaning 
of passenger-carrying CMVs would eliminate any confusion about who is 
responsible for crashes and enable the Agency to identify the 
appropriate motor carrier operating the vehicle and thus responsible 
for its safe operation.
    (2) A succinct statement of the objectives of, and legal basis for, 
the proposed rule.
    This rule is based on the authority of the Motor Carrier Safety Act 
of 1984 (1984 Act), as amended, and the Motor Carrier Act of 1935 (1935 
Act). This action is necessary to ensure that unsafe passenger carriers 
cannot evade FMCSA oversight and enforcement by operating under the 
authority of another carrier that exercises no actual control over 
those operations.
    (3) A description of and, where feasible, an estimate of the number 
of small entities to which the proposed rule will apply.
    Generally, motor carriers are not required to report their annual 
revenue to the Agency, but all carriers are required to provide the 
Agency with the number of power units they operate when they apply for 
operating authority and to update this figure biennially. Because FMCSA 
does not have direct revenue figures, power units serve as a proxy to 
determine the carrier size that would qualify as a small business given 
the Small Business Administration's (SBA) prescribed revenue threshold. 
In order to produce this estimate, it is necessary to determine the 
average annual revenue generated by a single power unit.
    With regard to passenger-carrying vehicles, the Agency conducted a 
preliminary analysis to estimate the average number of power units for 
a small entity earning $14 million

[[Page 57830]]

annually, based on an assumption that passenger carriers generate 
annual revenues of $150,000 per power unit. This estimate compares 
reasonably to the estimated average annual revenue per power unit for 
the trucking industry ($172,000). A lower estimate was used because 
passenger-carrying CMVs generally do not accumulate as many vehicle 
miles traveled (VMT) per year as trucks,\12\ and it is therefore 
assumed that they would generate less revenue per power unit on 
average. The analysis concluded that passenger carriers with 93 power 
units or fewer ($14,000,000 divided by $150,000/power unit = 93.3 power 
units) would be considered small entities. The Agency then looked at 
the number and percentage of passenger carriers registered with FMCSA 
that have no more than 93 power units. The results show that over 99 
percent of active passenger carriers have 93 power units or less.\13\ 
Therefore, the overwhelming majority of passenger carriers would be 
considered small entities to which this NPRM would apply.
---------------------------------------------------------------------------

    \12\ FMCSA Large Truck and Bus Crash Facts 2008, Tables 1 and 
20;  http://fmcsa.dot.gov/facts-research/LTBCF2008/Index-2008Large 
TruckandBusCrashFacts.aspx.
    \13\ FMCSA MCMIS snapshot on 2/19/2010.
---------------------------------------------------------------------------

    The total number of motor carriers with active USDOT numbers that 
identified themselves as carrying ``Passengers'' and own/lease at least 
one passenger vehicle is 29,130. This number includes intrastate 
hazardous material and intrastate-non-hazardous material carriers that 
operate passenger vehicles. These intrastate carriers are not subject 
to this NPRM and hence are not included in the final count. The number 
of interstate passenger carriers with recent activity in 2009 (for the 
purpose of comparison with the 2009-2010 numbers above) is 13,317. This 
number however, like the others above, includes carriers operating 
small vehicles (1-8 passengers). That segment of the population is not 
subject to this NPRM, and thus is excluded from the final count. The 
total then becomes 6,088 (2009). The number used in this analysis is 
6,328, which is the comparable 2012 number.
    (4) A description of the projected reporting, recordkeeping and 
other compliance requirements of the proposed rule, including an 
estimate of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record.
    The exact regulatory burden of this NPRM is difficult to estimate 
considering the lack of specific information on the prevalence and 
frequency of vehicle leasing among passenger carriers. There is also 
the added complexity of the wide variation in size, business model, and 
fleet vehicle configuration. The Agency, however, believes that the 
practical regulatory burden of this NPRM would be relatively small. 
Written documentation of business transactions and retention and 
availability of work documents (i.e., lease agreements and receipts) 
are hallmarks of professional management. Additionally, businesses are 
required to prepare, retain, and submit receipts of various business 
transactions to the Internal Revenue Service (IRS) and other agencies. 
Furthermore, the practical requirements of the NPRM (i.e., lease and 
receipt preparation, copying, storage, and vehicle marking) are easily 
satisfied through a wide array of flexible options. The Agency 
estimates that the financial burden of the NPRM, per carrier (per 
leased power unit), is not significant. As stated above, the estimated 
per unit cost of a lease agreement is $7.28, which is the sum of 4 cost 
components: (1) Lease documentation ($3.18 x 2), (2) Lease copying 
($0.30), (3) Receipt documentation ($0.60), and (4) Leased vehicle 
marking ($0.02). FMCSA does not believe this per-unit cost to be 
significant. Furthermore, this per-unit cost may effectively be lower, 
if a durable marking sign were re-used many times, a receipt were 
combined with a lease, and the preparation time for a lease were 
reduced through the use of generic or master-type lease forms. In 
addition, and as stated above, the analysis assumes a one-time lease 
negotiation cost, which the Agency believes is minimal, considering 
that several leases can be combined and negotiated as one (master) 
lease and many lease forms are available online and do not require 
legal assistance.
    The NPRM also includes a notification requirement for motor 
carriers of passengers that have been prohibited from operating in 
interstate commerce and which intend to lease, interchange, rent, or 
otherwise convey the use of some or all of their passenger-carrying 
commercial motor vehicles to another passenger carrier. This provision 
would require written notification of a planned transfer of control to 
the FMCSA Division Administrator for the State in which the carrier has 
its principal place of business. Written notification by email must 
occur at least 3 business days, and by U.S. Mail at least 5 business 
days, before the vehicles are transferred to the control of the other 
passenger carrier. The primary purpose of the Agency notification 
provision is to allow FMCSA time to research the safety history of the 
prospective lessee, if necessary, before the lease occurs. For example, 
if the OOS passenger carrier intended to lease its buses to a motor 
carrier that was itself undergoing an investigation or compliance 
review, was subject to an enforcement action, or was otherwise 
implicated in a serious safety matter, the Agency might wish to 
consider additional oversight of the proposed lessee. Requiring the OOS 
carrier to provide at least 3 business days advance notice by email, or 
at least 5 business days advance notice by U.S. Mail, before the 
transfer of control occurs would give FMCSA adequate time to plan and 
implement any steps it deemed necessary. Business days are Monday 
through Friday, excluding Federal holidays. This notification 
requirement would require up to 8 hours per OOS carrier per year.
    Due to the lack of data concerning the economic impact of this 
NPRM, the Agency is unable at this time to certify if this NPRM will 
cause a significant economic impact on a substantial number of small 
entities (SEISNOSE). FMCSA requests comments on the NPRM's potential 
impacts to small entities.
    (5) Identification, to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap, or conflict with the 
proposed rule.
    FMCSA is unaware of Federal rules which may duplicate, overlap or 
conflict with the proposed rule. In addition, section 603(c) of the RFA 
requires an agency to include a description of any significant 
alternatives to the proposed rule that minimize significant economic 
impacts on small entities while accomplishing the agency's objectives. 
The Agency has concluded that there are no significant alternatives 
that would achieve the objectives of this proposal.
    (6) A description of any significant alternatives to the proposed 
rule which accomplish the stated objectives of applicable statutes and 
which minimize any significant economic impact of the proposed rule on 
small entities.
    The Agency did not identify any significant alternatives to the 
rule that could lessen the burden on small entities without 
compromising its goals or the Agency's statutory mandate. Because small 
businesses are such a large part of the demographic the Agency 
regulates, providing alternatives to small business to permit 
noncompliance with FMCSA regulations or alternative compliance

[[Page 57831]]

methodologies is not feasible and not consistent with sound public 
policy.

C. Federalism (Executive Order 13132)

    A rule has federalism implications if it has a substantial direct 
effect on State or local governments and would either preempt State law 
or impose a substantial direct cost of compliance on the States. FMCSA 
analyzed this rule under E.O. 13132 and has preliminarily determined 
that it has no federalism implications.

D. Unfunded Mandates Reform Act of 1995

    This proposed rule would not impose an unfunded Federal mandate, as 
defined by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532 et 
seq.), that will result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $143.1 
million (which is the value of $100 million in 2010 after adjusting for 
inflation) or more in any 1 year.

E. Executive Order 12988 (Civil Justice Reform)

    This proposed rule meets applicable standards in sections 3(a) and 
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden.

F. Executive Order 13045 (Protection of Children)

    FMCSA analyzed this action under Executive Order 13045, Protection 
of Children from Environmental Health Risks and Safety Risks. The 
Agency has preliminarily determined that this proposed rule would not 
create an environmental risk to health or safety that may 
disproportionately affect children.

G. Executive Order 12630 (Taking of Private Property)

    FMCSA reviewed this proposed rule in accordance with Executive 
Order 12630, Governmental Actions and Interference with 
Constitutionally Protected Property Rights, and has preliminarily 
determined it would not effect a taking of private property or 
otherwise have taking implications.

H. Privacy Impact Assessment

    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 proposed rule would 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 which receives records contained in a system 
of records from a Federal agency for use in a matching program. FMCSA 
has preliminarily determined this proposed rule would not result in a 
new or revised Privacy Act System of Records for FMCSA.

I. Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this program.

J. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), Federal agencies must obtain approval from the OMB for each 
collection of information they conduct, sponsor, or require through 
regulations. This NPRM would request OMB to approve a new information 
collection titled ``Passenger-Carrying Vehicle Leasing and Marking 
Regulation Requirements.'' The annual burden for this new information 
collection is estimated to be about 103,000 hours (rounded up to the 
next higher thousand from the 102,547 hour value shown in the PRA 
Supporting Statement).
Lease Preparation Information Collection Analysis
    For lease preparation, the Agency estimates the cost of obtaining 
and preparing a standard generic template that is freely available on 
the internet, or through trade organizations or existing passenger 
carriers. The total number of pages of one such template found on the 
internet is two pages, which is the number used in the Agency's 
estimate. The estimated annual number of burden hours depends on the 
estimated annual frequency of leasing. The Agency assumes that the 
average passenger carrier (10 power units) will engage in 96 lease 
agreements per year. This estimate consists of 12 leases per peak month 
(May through August) and 6 leases per off-peak month. The total annual 
number of leases would be about 607,488. The Agency assumes 5 minutes 
of preparation (or documentation) time per lease agreement. This 
amounts to 8 hours per carrier per year for an industry total of 50,624 
[607,488 times 5 minutes divided by 60 minutes per hour = 50,624]. The 
cost of these burden hours is calculated by applying the U.S. 
Department of Labor's Bureau of Labor Statistics median hourly wage 
rate for First-Line Supervisors of Transportation and Material-Moving 
Machine and Vehicle Operators (53-103) which is $25.45, plus 50 percent 
markup for fringe benefits (for a total hourly wage of $38.18).\14\ 
This lease documentation cost is further multiplied by two, since it 
applies to both lessees and lessors. The total annual cost of lease 
documentation is therefore estimated to be $3,863,624.
---------------------------------------------------------------------------

    \14\ Occupational Employment and Wages, May 2011, at http://www.bls.gov/oes/current/oes531031.htm.
---------------------------------------------------------------------------

    Regarding preparation of receipts, the Agency estimates the cost of 
their transcription, but does not assign burden hours to the task. The 
receipts do not have to adhere to a certain format, length, or 
complexity, as long as they meet the requirements of the NPRM. The 
receipts are sometimes replicas or a portion of ``master leases,'' 
which make for easy and quick preparation.
    FMCSA estimates the annual cost of transcribing lease agreements 
and vehicle exchange receipts at $273,000. This estimate consists of 
$91,000 for lease agreements and $182,000 for receipts for an annual 
total number of leases of 607,488. Transcription of lease agreements 
assumes $0.15 per page (double-sided two page standard agreement). 
Transcription of vehicle exchange receipts assumes $0.30 per exchange 
(one page for each receipt) for each event (surrender of leased vehicle 
by lessor and return of vehicle to the lessor).
    The NPRM requires the retention of lease agreements and receipts 
for one year. The Agency finds that the cost of lease and receipt 
storage is negligible. The storage of work documents is a requisite 
part of doing business, the accommodation for which is assumed to pre-
exist. Thus, the proposed requirement to retain a copy of the written 
lease agreement and its receipts for one year does not impose a 
significant cost or burden on the affected carriers. A two-inch stack 
of 8\1/2\ x 11-inch sheets of 200-pound paper (a ream) could amount to 
500 double-sided copies of lease agreements. This would exceed more 
than one lease per day in a given a year. A single-sided stack of the 
same number would amount to a mere four inches on an existing office 
shelf or cabinet.
Passenger-Carrying CMV Marking Information Collection Analysis
    The NPRM requires every leased passenger vehicle to be properly 
marked

[[Page 57832]]

with the name of the carrier prefaced with ``operated by'' and the 
carrier's USDOT number. The proposed rule requires a marking which 
would be affixed on one side of the passenger vehicle. The markings are 
presumed to be temporary and removable, though some may be permanent or 
re-usable, depending on the preferences of the carrier. The Agency 
assumed that carriers will use a paper marking option, i.e., two 
letter-size sheets or one legal-size sheet affixed with adhesive tape 
to the vehicle. The burden hours of writing the signage and affixing it 
are negligible. Therefore, none are attributed to this rulemaking.
    The Agency estimates the annual cost of vehicle marking using 
removable paper devices for about 6,328 passenger carriers, assuming a 
medium frequency rate of leasing, would be about $12,150. This estimate 
assumes $0.02 per page (including the cost of adhesive) for a two-page 
temporary and removable sign. The Agency assumes one marking sign per 
lease agreement or leased trip (i.e., 607,488 lease agreements, as 
explained above).
Out-of-Service Passenger Carrier Notification of Intended Leases 
Information Collection Analysis
    The NPRM requires passenger carriers that have been placed OOS to 
notify FMCSA before leasing their vehicles to other passenger carriers. 
The primary purpose of the Agency notification provision is to allow 
FMCSA time to research the safety history of the prospective lessee, if 
necessary, before the lease occurs. For example, if the OOS passenger 
carrier intended to lease its buses to a motor carrier that was itself 
undergoing an investigation or compliance review, was subject to an 
enforcement action, or was otherwise implicated in a serious safety 
matter, the Agency might wish to consider additional oversight of the 
proposed lessee. Requiring the OOS carrier to provide at least 3 
business days advance notice by email, or at least 5 business days 
advance notice by U.S. Mail, before the transfer of control occurs 
would give FMCSA adequate time to plan and implement any steps it 
deemed necessary.
    The estimated annual number of passenger carriers placed OOS is 
163. It is assumed that virtually all of those carriers will elect to 
use the electronic notification option, since it is the most 
convenient, quickest, and least costly. The average number of 
notifications per year is 15,648 (163 x 96), which is the product of 
the number of OOS carriers and the average number of leases per year. 
This amounts to up to 8 hours per OOS carrier per year for the 163 OOS 
carrier industry total of 1,299 [163 x 96 x 0.083 (5 min. divided by 
60) = 1,299 hours].
    In summary, lease negotiation and preparation amounts to about 8 
hours per carrier per year for an industry total of 101,248 hours 
information collection burden, plus an additional 8 hours per OOS 
carrier per year for the 163 OOS carrier industry for a total of 1,299 
hours burden. Thus, 101,248 hours plus 1,299 hours results in a total 
burden for this proposal of 102,547 hours annually.

Information Collection Request Summary

    Annual Number of Respondents for this Information Collection: 
6,328.
    Annual Number of Responses for this Information Collection: 
623,136.
    Annual Information Collection Burden Hours: 102,547.
    Annual Information Collection Burden Cost: \15\ $4,422,513.
---------------------------------------------------------------------------

    \15\ As shown above $3,863,624 + $182,246 + $364,493 + $12,150 = 
$4,422,513.
---------------------------------------------------------------------------

    We particularly request your comments on whether the collection of 
information is necessary for the FMCSA to meet the goal of this 
proposed rule to inform the traveling public and Federal, State, and 
local law enforcement officers to identify the passenger carrier 
responsible for safety, including: (1) Whether the information is 
useful to this goal; (2) the accuracy of the estimate of the burden of 
the information collection; (3) ways to enhance the quality, utility, 
and clarity of the information collected; and (4) ways to minimize the 
burden of the collection of information on respondents, including the 
use of automated collection techniques or other forms of information 
technology. You may submit comments on the information collection 
burden addressed by this proposed rule to OMB. The OMB must receive 
your comments by November 19, 2013. You must mail or hand deliver your 
comments to: Attention: Desk Officer for the Department of 
Transportation, Docket Library, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Room 10102, 725 17th Street 
NW., Washington, DC 20503. Please also provide a copy of your comments 
on the information collection burden addressed by this proposed rule to 
docket FMCSA-2012-0103 in www.regulations.gov by one of the four ways 
shown above under the ADDRESSES heading.

K. National Environmental Policy Act and Clean Air Act

    FMCSA analyzed this proposed rule in accordance with the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.). The 
Agency has preliminarily determined under its environmental procedures 
Order 5610.1, published March 1, 2004, in the Federal Register (69 FR 
9680), that this action is categorically excluded from further 
environmental documentation under Appendix 2, Paragraphs y(2) and y(7) 
of the Order (69 FR 9702). These categorical exclusions relate to:
     y (2) Regulations implementing motor carrier 
identification and registration reports; and
     y (7) 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.
    Thus, the proposed action would not require an environmental 
assessment or an environmental impact statement.
    FMCSA also analyzed this proposed rule under the Clean Air Act, as 
amended (CAA), section 176(c) (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.

L. Executive Order 13211 (Energy Effects)

    FMCSA has analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. The Agency has preliminarily determined that it 
is not a ``significant energy action'' under that Executive Order 
because it is not economically significant and is not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy.

List of Subjects in 49 CFR Part 390

    Highway safety, Intermodal transportation, Motor carriers, Motor 
vehicle safety, Reporting and recordkeeping requirements.

The NPRM

    For the reasons stated in the preamble, FMCSA proposes to amend 49 
CFR part 390 in title 49, Code of Federal Regulations, chapter III, 
subchapter B, as follows:

[[Page 57833]]

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, 31136, 31144, 
31151, 31502; sec. 114, Pub. L. 103-311, 108 Stat. 1673, 1677-1678; 
sec. 212, 217, 229, Pub. L. 106-159, 113 Stat. 1748, 1766, 1767; 
sec. 229, Pub. L. 106-159 (as transferred by sec. 4114 and amended 
by secs. 4130-4132, Pub. L. 109-59, 119 Stat. 1144, 1726, 1743-
1744); sec. 4136, Pub. L. 109-59, 119 Stat. 144, 1745; sections 
32101(d) and 34934, Pub. L. 112-141, 126 Stat. 405, 778, 830; and 49 
CFR 1.87.

0
2. Amend Sec.  390.5 by revising the definition of ``Interchange'' and 
adding definitions of ``Lease,'' ``Lessee,'' and ``Lessor'' in 
alphabetical order to read as follows:


Sec.  390.5  Definitions.

* * * * *
    Interchange means--
    (1) The act of providing intermodal equipment to a motor carrier 
pursuant to an intermodal equipment interchange agreement for the 
purpose of transporting the equipment for loading or unloading by any 
person or repositioning the equipment for the benefit of the equipment 
provider, but it does not include the leasing of equipment to a motor 
carrier for primary use in the motor carrier's freight hauling 
operations; or
    (2) The act of providing a passenger-carrying commercial motor 
vehicle by one motor carrier of passengers to another such carrier, at 
a point which both carriers are authorized to serve, with which to 
continue a through movement.
    (3) For property-carrying vehicles, see Sec.  376.2 of this 
subchapter.
* * * * *
    Lease means a contract or arrangement in which a motor carrier 
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, in exchange for compensation. 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 means the motor carrier obtains the use of a passenger-
carrying commercial motor vehicle, with or without the driver, from 
another party. The term lessee includes a party obtaining the use of a 
passenger-carrying commercial motor vehicle from another 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.
    Lessor means the motor carrier granting the use of a passenger-
carrying commercial motor vehicle, with or without a driver, to another 
party. The term lessor includes a motor carrier granting the use of a 
passenger-carrying commercial motor vehicle to another party under an 
interchange or other agreement, with or without a driver, 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.  390.21 by revising the heading and introductory language 
of paragraph (e); redesignating paragraphs (f) and (g) as paragraphs 
(g) and (h); and adding paragraph (f) to read as follows:


Sec.  390.21  Marking of self-propelled CMVs and intermodal equipment.

* * * * *
    (e) Rented property-carrying commercial motor vehicles. A motor 
carrier operating a self-propelled property-carrying commercial motor 
vehicle under a rental agreement having a term not in excess of 30 
calendar days meets the requirements of this section if:
* * * * *
    (f) Leased and interchanged passenger-carrying commercial motor 
vehicles. A motor carrier operating a leased or interchanged passenger-
carrying commercial motor vehicle meets the requirements of this 
section if:
    (1) The passenger-carrying CMV is marked in accordance with the 
provisions of paragraphs (b) through (d) of this section, except that 
marking is required only on the right (curb) side of the vehicle; and
    (2) The passenger-carrying CMV is marked with a single placard, 
sign, or other device affixed to the right (curb) side of the vehicle 
on or near the front passenger door. The device must display the legal 
name or a single trade name of the motor carrier operating the CMV and 
the motor carrier's USDOT number, preceded by the words ``Operated 
by.''
* * * * *
0
4. Add a new subpart F, consisting of Sec. Sec.  390.301 through 
390.305, to part 390 to read as follows:
Subpart F--Lease and Interchange of Passenger-Carrying Commercial Motor 
Vehicles
Sec.
390.301 Applicability.
390.303 Written lease and interchange requirements.
390.305 Notifications.

Subpart F--Lease and Interchange of Passenger-Carrying Commercial 
Motor Vehicles


Sec.  390.301  Applicability.

    (a) Except as provided in paragraph (b) 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 with 
which to perform such transportation; and
    (2) The interchange or loan of passenger-carrying commercial motor 
vehicles or drivers between motor carriers performing such 
transportation.
    (b) This subpart does not apply to a contract (however designated, 
e.g., lease, closed-end lease, hire purchase, lease purchase, purchase 
agreement, installment plan, etc.) between a motor carrier and a 
manufacturer or dealer of passenger-carrying commercial motor vehicles 
allowing the motor carrier to use the passenger-carrying commercial 
motor vehicle, for compensation, for a period of 5 years or longer.


Sec.  390.303  Written lease and interchange requirements.

    A motor carrier may transport passengers in a leased or 
interchanged commercial motor vehicle only under the following 
conditions:
    (a) Lease, interchange, or other agreement. There shall be either:
    (1) A written lease granting the use of the passenger-carrying 
commercial motor vehicle and meeting the conditions of paragraphs (b) 
through (i) of this section. The provisions of the lease shall be 
adhered to and performed by the motor carrier lessee;
    (2) A written agreement meeting the conditions of paragraphs (b) 
through (i) of this section and governing the interchange of passenger-
carrying commercial motor vehicles between motor carriers of passengers 
conducting through service on a route or series of routes. The 
provisions of the interchange agreement shall be adhered to and 
performed by the motor carrier lessee; or
    (3) A written agreement meeting the conditions of paragraphs (b) 
through (i) of this section and governing the renting, borrowing, or 
loaning, etc., of a

[[Page 57834]]

passenger-carrying commercial motor vehicle from another party. The 
provisions of the agreement shall be adhered to and performed by the 
motor carrier lessee.
    (b) Parties. The lease, interchange, or other agreement shall be 
made between the motor carrier providing passenger transportation in a 
commercial motor vehicle (lessee) and the motor carrier that owns the 
equipment (lessor). The lease, interchange, or other agreement shall be 
signed by these parties or by their authorized representatives.
    (c) Duration to be specific. The lease, interchange, or other 
agreement shall specify the time and date when, and the location where, 
the lease, interchange, or other agreement begins and ends. These times 
and locations shall coincide with the times for the providing of 
receipts required by paragraph (d) of this section, unless the parties 
wish to end the lease, interchange, or other agreement prematurely; in 
that case, the receipt required by paragraph (d) of this section 
showing the date, time of day, and location where the lessor recovers 
possession of the passenger-carrying commercial motor vehicle shall 
supersede the date and location for termination specified by the lease, 
interchange, or other agreement.
    (d) Receipts for passenger-carrying commercial motor vehicle. 
Except as indicated in paragraph (d)(4) of this section, receipts 
specifically identifying the passenger-carrying commercial motor 
vehicle to be leased or otherwise temporarily transferred and stating 
the date, time of day, and location where possession is transferred, 
shall be given as follows:
    (1) When the lessee takes possession of the passenger-carrying 
commercial motor vehicle, it shall give the lessor a receipt. The 
receipt may be transmitted by email, mail, facsimile, or other physical 
or electronic means of communication.
    (2) When the lessor recovers possession of the passenger-carrying 
commercial motor vehicle, it shall give the lessee a receipt. The 
receipt may be transmitted by email, mail, facsimile, or other physical 
or electronic means of communication.
    (3) Authorized representatives of the lessee and the lessor may 
take possession of leased equipment and give and receive the receipts 
required under this section.
    (4) Exception. Receipts shall not be required when passenger-
carrying commercial motor vehicles are interchanged between parties to 
either an interline agreement or a revenue pooling agreement approved 
by the Surface Transportation Board.
    (e) Identification of equipment. The motor carrier lessee shall 
identify the commercial motor vehicle as being in its service as 
follows:
    (1) During the period of the lease, interchange, or other 
agreement, the lessee shall mark the passenger-carrying commercial 
motor vehicle in accordance with the requirements of Sec.  390.21(f) 
(Leased and interchanged passenger-carrying commercial motor vehicles).
    (2) Except as indicated in paragraphs (e)(2)(i) and (ii) of this 
section, a copy of the lease, interchange agreement, or other agreement 
shall be carried on the passenger-carrying commercial motor vehicle. 
This includes:
    (i) A copy of a master lease applicable to more than one vehicle 
that is carried on the passenger-carrying commercial motor vehicle 
meets the requirements of this paragraph provided it complies with all 
other requirements of this section.
    (ii) In lieu of a copy of the interchange agreement, a written 
statement signed by the parties to the interchange agreement or their 
authorized representatives and carried on the passenger-carrying 
commercial motor vehicle meets the requirements of this paragraph 
provided it:
    (A) Certifies under penalty of perjury pursuant to 28 U.S.C. 1746 
that the lessee is operating the equipment;
    (B) Identifies the passenger-carrying commercial motor vehicle by 
company and USDOT number;
    (C) Shows the specific point, date, and time of interchange; and
    (D) Indicates the use to be made of the passenger-carrying 
commercial motor vehicle.
    (f) Exclusive possession and responsibilities. (1) The lease, 
interchange, or other agreement shall clearly state that the motor 
carrier obtaining the passenger-carrying commercial motor vehicle (the 
lessee) shall have exclusive possession, control, and use of the 
passenger-carrying commercial motor vehicle for the duration of the 
lease, interchange, or other agreement. The lease, interchange, or 
other agreement shall further provide that the lessee shall assume 
complete responsibility for operation of the passenger-carrying 
commercial motor vehicle and compliance with all applicable Federal 
regulations for the duration of the lease, interchange, or other 
agreement.
    (2) Provision may be made in the lease, interchange, or other 
agreement for considering the lessee as the owner of the equipment for 
the purpose of subleasing it to other motor carriers of passengers 
during the period of the lease, interchange, or other agreement. In the 
event of a sublease, all of the requirements of this section shall 
apply to the parties to the sublease.
    (3) Nothing in the provisions required by this paragraph is 
intended to affect whether the lessor of the passenger-carrying 
commercial motor vehicle or a driver provided by the lessor is an 
independent contractor or an employee of the motor carrier lessee.
    (g) Insurance. The lease, interchange, or other agreement shall 
clearly specify the legal obligation of the lessee to maintain 
insurance coverage for the protection of the public pursuant to 49 CFR 
part 387. The lease, interchange, or other agreement shall further 
specify who is responsible for providing any other insurance coverage 
for the operation of the leased, interchanged, or otherwise procured 
equipment.
    (h) Copies of the lease. An original and two copies of each lease, 
interchange, or other agreement shall be signed by the parties. The 
lessee shall keep the original and, except as otherwise permitted by 
paragraph (e)(2) of this section, shall place a copy of the lease, 
interchange, or other agreement on the passenger-carrying commercial 
motor vehicle during the period of the lease, interchange, or other 
agreement. The lessor shall keep the other copy of the lease.
    (i) Record retention. Copies of each lease, interchange, or other 
agreement, and the receipts required by paragraph (d) of this section, 
shall be retained by the lessor and lessee for one year after the 
expiration date of the lease, interchange, or other agreement.


Sec.  390.305  Notifications.

    A motor carrier of passengers that has been prohibited from 
operating in interstate commerce for any reason by FMCSA or a State 
(imminent hazard, failure to pay civil penalty, etc.) and that intends 
to lease, interchange, rent, or otherwise convey the use of some or all 
of its passenger-carrying commercial motor vehicles to another 
passenger carrier must provide written notification of that transfer of 
control to the FMCSA Division Administrator for the State in which the 
carrier has its principal place of business. Written notification by 
email must occur at least 3 business days, and by U.S. Mail at least 5 
business days, before the vehicles are transferred to the control of 
the other passenger carrier. The written notification shall include the 
name, address, telephone number, and USDOT number of the passenger 
carrier to which the passenger-carrying commercial motor vehicles are 
being leased, interchanged, rented, or otherwise conveyed, as well as 
the

[[Page 57835]]

make, model, and vehicle identification number (VIN) of each vehicle so 
transferred. The lease or interchange of such vehicles shall comply 
with all applicable provisions of subpart F of this part.

    Issued under the authority delegated in 49 CFR 1.87 on: 
September 12, 2013.
Anne S. Ferro,
Administrator.
[FR Doc. 2013-22782 Filed 9-19-13; 8:45 am]
BILLING CODE 4910-EX-P

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