Transfers of Operating Authority Registration

Anne S. Ferro
Federal Motor Carrier Safety Administration
August 23, 2013

[Federal Register Volume 78, Number 164 (Friday, August 23, 2013)]
[Rules and Regulations]
[Pages 52457-52458]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20443]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 365


Transfers of Operating Authority Registration

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

ACTION: Interpretation.

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SUMMARY: FMCSA provides notice concerning the Agency's new process and 
legal interpretation for recording transfers of operating authority 
registration by non-exempt for-hire motor carriers, property brokers 
and freight forwarders.

DATES: The process and interpretation are effective October 22, 2013.

FOR FURTHER INFORMATION CONTACT: Mr. Jeff Secrist, Office of 
Registration and Safety Information, U.S. Department of Transportation, 
Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue 
SE., Washington, DC 20590-0001. Telephone (202) 385-2367 or 
FMCSAOATransfers@dot.gov. Office hours are from 8:00 a.m. to 4:30 p.m., 
e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Background

    As part of an ongoing assessment of Agency processes and its 
retrospective review of regulations, see E.O. 13563, 76 FR 3221 (Jan. 
21, 2011); 5 U.S.C. 610, FMCSA reexamined its legal authority for 
continued enforcement of 49 CFR part 365, subpart D, ``Transfer of 
Operating Rights under 49 U.S.C. 10926.'' As discussed in the 
Supplemental Notice of Proposed Rulemaking for the Unified Registration 
System (URS), 76 FR 66506, 66511 (October 26, 2011), and in the URS 
Final Rule, published elsewhere in today's Federal Register, Congress 
repealed former 49 U.S.C. 10926 as part of the ICC Termination Act of 
1995, Public Law 104-88, 109 Stat. 803 (Dec. 29, 1995) (ICCTA), and 
with it the express authority previously granted to FMCSA's predecessor 
agency (in this case, the former Interstate Commerce Commission (ICC)) 
to review and approve transfers of operating authority.
    However, Congress did not prohibit the practice--long recognized 
under the ICC regulation--of transferring operating authority rights, 
nor did it rescind subpart D or otherwise prohibit the Agency from 
continuing to review and approve such transfers. The ICCTA and its 
legislative history were silent regarding the continued effect of the 
regulatory provisions then in place for transfers of operating rights, 
and the provisions have remained substantially unchanged since 1996, in 
49 CFR part 365, subpart D. Moreover, the Agency continues to have a 
duty under 49 U.S.C. 13902 to register motor carriers that are fit, 
willing, and able to comply with applicable statutory and regulatory 
requirements. And transfer approvals historically have been a 
reasonable and effective part of that program.
    As a result of the highly specific and more limited nature of 
operating authority, which historically was defined by such factors as 
restricted commodity and territorial scope, specified regular route 
designations for passenger carriers, and types of service such as 
contract and common carrier operations, the regulated community came to 
treat operating authority as an asset of commercial value. Essentially 
operating authority was recognized as a property right that could be 
bought and sold, and thus transferred among disparate controlling 
interests, without disrupting the continuity of regulatory oversight or 
even warranting a change in registration number to reflect an ownership 
change. Indeed, when FMCSA's predecessor Agency, the Federal Highway 
Administration, proposed removing the 49 CFR part 365, subpart D, 
transfer regulations in response to the ICCTA's repeal of 49 U.S.C. 
10926 (63 FR 7362, February 13, 1998), a number of industry commenters 
objected, noting that transfers were an institutionalized part of the 
regulatory environment that minimized registration costs and 
contributed to oversight and tracking of the carrier population. See 70 
FR 28990, 28995-28996 (May 19, 2005). FMCSA subsequently withdrew the 
proposal to remove the transfer regulations in 49 CFR part 365, subpart 
D (66 FR 27059, May 16, 2001). But when the Agency again proposed in 
the URS rulemaking to eliminate the part 365 transfer approval process 
(70 FR 28990, 28996, May 19, 2005), the public comment record again 
acknowledged that operating authority transfers were an established 
industry practice and

[[Page 52458]]

should be permitted to continue when they were part of purchase 
transactions involving entire carrier operations, so long as they were 
effectively monitored by the Agency. See, e.g., the discussion of 
comments submitted by the Transportation Intermediaries Association in 
the URS Final Rule, published elsewhere in today's Federal Register.
    It is important to note, however, that the concept of motor carrier 
operating authority registration as an asset of commercial value has 
lost much of its relevance under today's regulatory structure, where 
operating authority is defined by comprehensive service options (e.g.,, 
without common and contract carrier service distinctions), unrestricted 
routes, and nationwide territorial scope. See, e.g., 49 U.S.C. 
13102(14), as amended (no longer reflecting contract and common carrier 
operating authority designations in definition of ``motor carrier''); 
Elimination of Route Designation Requirement for Motor Carriers 
Transporting Passengers Over Regular Routes, 74 FR 2895 (January 16, 
2009).
    Taking account of these industry and operating authority realities, 
the repeal of the express transfer approval authority of former 49 
U.S.C. 10926, and the nature of the Agency's residual authority to 
consider transfers, FMCSA is discontinuing the transfer review and 
approval process. While the Agency will no longer accept or review 
requests to approve transfers of operating authority, we believe it is 
in the public interest and a necessary feature of our commercial and 
safety oversight roles to record information about the resulting 
ownership and control consequences when non-exempt for-hire motor 
carriers, brokers, or freight forwarders registered under 49 U.S.C. 
chapter 139 merge, transfer, or lease their operating rights. 
Accordingly, we have revised the processes for recording operating 
authority transfers to ensure that, although formal Agency review and 
approval is no longer involved, FMCSA's information systems continue to 
reflect complete and accurate information concerning operating 
authority registration and enable the Agency to identify parties 
responsible for the business operations.
    For the reasons amplified above, effective October 22, 2013, the 
Agency will no longer process applications for transfer of operating 
authority, issue transfer approvals, or require the $300 fee formerly 
associated with such applications. Under the new transfer recordation 
process, both transferors and transferees will be asked to provide 
basic identifying information concerning their business operations, 
ownership, and control, e.g., name, business form, business address, 
and name(s) of owner(s) and officers. No application form is required, 
and no transfer fee applies. After the information is entered in 
FMCSA's information systems, parties to transfer transactions will 
receive Agency notification of recordation of the resulting operating 
authority ownership.
    Although ICCTA removed the Agency's express authority under former 
49 U.S.C. 10926 to approve operating authority transfers, it did not 
eliminate the inherent authority to oversee transfers nor prohibit 
FMCSA from recording or monitoring the ownership or commercial and 
operational safety consequences of the transfer transaction. Indeed, 
FMCSA's statutory authority permits it to obtain information from motor 
carriers, brokers, and freight forwarders, and from the employees of 
such entities, that the Agency deems necessary and relevant to ensure 
operational safety and commercial integrity.
    Legal authority for the Agency to record and track transfers of 
operating authority in this manner can be found at 49 U.S.C. 13301 and 
31133. Under 49 U.S.C. 13301(b), the Agency is delegated broad 
authority to obtain information regarding carriers, brokers, and 
forwarders necessary to carry out its commercial regulatory 
responsibilities, as enumerated in title 49, subtitle IV, part B. In 
addition, 49 U.S.C. 31133(a)(8) authorizes the Secretary to prescribe 
recordkeeping and reporting requirements for motor carriers and other 
entities subject to the Agency's safety oversight.
    Information provided under the transfer recordation process will 
ensure that the Agency's information technology systems are up to date 
and that the safety history associated with a regulated entity's 
operating authority and its corresponding USDOT Number remains 
connected with that operating authority, regardless of any changes in 
ownership or control.

    Issued on: August 15, 2013.
Anne S. Ferro,
Administrator.
[FR Doc. 2013-20443 Filed 8-22-13; 8:45 am]
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