Lease and Interchange of Vehicles; Motor Carriers of Passengers, 30164-30180 [2015-12644]

Agencies

• Federal Motor Carrier Safety Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 80, Number 101 (Wednesday, May 27, 2015)]
[Rules and Regulations]
[Pages 30164-30180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12644]


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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: Final rule.

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SUMMARY: FMCSA adopts regulations governing the lease and interchange 
of passenger-carrying commercial motor vehicles (CMVs) to: Identify the 
motor carrier operating a passenger-carrying CMV that is responsible 
for compliance with the Federal Motor Carrier Safety Regulations 
(FMCSRs); and ensure that a lessor surrenders control of the CMV for 
the full term of the lease or temporary exchange of CMVs and drivers. 
This action is necessary to ensure that unsafe passenger carriers 
cannot evade FMCSA oversight and enforcement by entering into a 
questionable lease arrangement to operate under the authority of 
another carrier that exercises no actual control over those operations. 
This rule 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 
investigations. It also provides the general public with the means to 
identify the responsible motor carrier at the time transportation 
services are provided.

DATES: Effective date: July 27, 2015. Compliance date: Motor carriers 
of passengers operating CMVs under a lease or interchange agreement are 
subject to this rule on or after January 1, 2017.
    Petitions for reconsideration must be received by June 26, 2015 and 
must be filed in accordance with 49 CFR 389.35.

FOR FURTHER INFORMATION CONTACT: Ms. Loretta Bitner, (202) 366-2400, 
loretta.bitner@dot.gov, Office of Enforcement and Compliance. FMCSA 
office hours are from 9 a.m. to 5 p.m., Monday through Friday, except 
Federal holidays.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Acronyms and Abbreviations
II. Executive Summary
    A. Purpose of the Final Rule
    B. Summary of the Major Provisions
    C. Costs and Benefits
III. Legal Basis for the Rulemaking
IV. Proposal
V. Discussion of Comments to NPRM
    Impact on Safety
    Exception for Replacement Vehicles
    Financial v. Operational Leases
    Revenue Pooling Agreements
    Cost of the Rule
    Common Ownership and Control
    Passenger Carriers Chartering Other Passenger Carriers
    Penalties
    Lease Disclosure on Tickets
    Out-of-Service Carriers
    Miscellaneous Comments
    MCSAP State Enforcement Plans
VI. Section-By-Section Description of Final Rule
VII. Regulatory Analyses
    A. Regulatory Planning and Review
    Passenger Carriers Subject to This Final Rule
    Estimated Costs of the Final Rule
    Estimated Benefits and Threshold Analysis Results
    B. Regulatory Flexibility Act
    Assistance for Small Entities
    C. Federalism (Executive Order 13132)
    D. Unfunded Mandates Reform Act of 1995
    E. Executive Order 12988 (Civil Justice Reform)
    F. Executive Order 13045 (Protection of Children)
    G. Executive Order 12630 (Taking of Private Property)
    H. Privacy Impact Assessment
    I. Executive Order 12372 (Intergovernmental Review)
    J. Paperwork Reduction Act
    Lease Preparation Information Collection Analysis
    Passenger-Carrying CMV Marking Information Collection Analysis
    K. National Environmental Policy Act and Clean Air Act
    L. Executive Order 13211 (Energy Effects)
The Final Rule

I. Acronyms and Abbreviations

1935 Act Motor Carrier Act of 1935
1984 Act Motor Carrier Safety Act of 1984
Advocates Advocates for Highway and Auto Safety
ABA American Bus Association
BASICs Behavioral Analysis and Safety Improvement Categories
CDL Commercial Driver's License
CMV Commercial Motor Vehicle
CSA Compliance, Safety, Accountability
DOT United States Department of Transportation
FMCSA Federal Motor Carrier Safety Administration
FMCSRs Federal Motor Carrier Safety Regulations, 49 CFR parts 350 
through 399
FR Federal Register
FRFA Final Regulatory Flexibility Analysis
Gobbell Gobbell Transportation Services
LLCs Limited Liability Companies
MCMIS Motor Carrier Management Information System
MCSAP Motor Carrier Safety Assistance Program
MAP-21 Moving Ahead for Progress in the 21st Century Act
NPRM Notice of Proposed Rulemaking
NTSB National Transportation Safety Board
OMB Office of Management and Budget
OOIDA Owner-Operator Independent Drivers Association
OOS Out of Service
PRA Paperwork Reduction Act of 1995
QALY Quality-Adjusted Life-Year
RFA Regulatory Flexibility Act
SMS Safety Measurement System
SBA Small Business Administration
STB Surface Transportation Board
UMA United Motorcoach Association
VSL Value of a Statistical Life
VMT Vehicle Miles Traveled
VIN Vehicle Identification Number

II. Executive Summary

A. Purpose of the Final Rule

    FMCSA adopts regulations governing the lease and interchange of 
passenger-carrying CMVs to ensure that passenger carriers cannot evade 
FMCSA oversight and enforcement by entering into questionable lease 
arrangements to operate under the authority \1\ 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

[[Page 30165]]

(49 U.S.C. 31136) and the Motor Carrier Act of 1935 (49 U.S.C. 31502).
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    \1\ While this statement refers to the operating authority 
issued to for-hire motor carriers by FMCSA, the rule would also 
apply to private carriers, which are not required to have operating 
authority. If a private carrier leased a bus from another private 
carrier, the parties would be required to complete a lease, and the 
lessee would be responsible for safety and regulatory compliance.
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B. Summary of the Major Provisions

    The rule (1) identifies the motor carrier operating a passenger-
carrying CMV that is responsible for compliance with the Federal Motor 
Carrier Safety Regulations (FMCSRs), and (2) ensures that a lessor 
surrenders control of the CMV for the full term of the lease or 
temporary exchange of CMVs and drivers; and (3) requires motor carriers 
originally hired to provide charter transportation of passengers that 
subcontract this work to another motor carrier of passengers to notify 
the tour operator or group of passengers about the role of, and certain 
information about, the subcontracted motor carrier of passengers.

C. Costs and Benefits

    The Agency has revised some of its cost calculations from the NPRM 
based on comments received. The estimated costs of the final rule 
consist of the following: (1) Trip- or longer-term lease negotiation; 
(2) lease documentation; (3) lease copying; (4) receipt documentation; 
(5) vehicle marking; and (6) documentation as per the common ownership 
and control and revenue pooling exceptions, in place of a copy of the 
lease. The analysis also provides a cost estimate of the notification 
requirement described in the previous paragraph. The analysis 
considered a no-action alternative (Option 1). It also considered two 
regulatory options (Options 2 and 3), each with three rates of leasing 
frequency--low, medium, and high. Other cost elements were considered 
but eliminated because of their insignificance or because they had 
already been incurred in the normal course of business. These costs 
include document storage and disposal of discarded CMV marking 
materials.
    The annualized costs of the Agency-selected option (Option 2, 
hereafter ``the rule'' or ``final rule'') (at a seven-percent discount 
rate) from 2017 through 2026 are summarized in Table 1 below. The 
annualized cost of the final rule at the low-leasing frequency is $4.1 
million, at the medium-leasing frequency it is $8.0 million, and at the 
high-leasing frequency it is $15.7 million.\2\
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    \2\ On a strictly unrounded basis, the costs associated with the 
low-, medium-, and high-frequency lease scenarios would be even 
multiples of each other (e.g., the medium-frequency cost = 2 times 
the low-frequency cost, while the high-frequency cost = 2 times the 
medium-frequency cost). Tables 12 and 13 of the Regulatory 
Evaluation document in the rulemaking docket detail the 10-year 
costs of this rule. For presentation purposes, the values in Tables 
12 and 13 of the Regulatory Evaluation are rounded to the nearest 
$1,000. The sums of these rounded costs serve as the basis for 
calculating the annualized values shown in Table 1 above. The use of 
rounding accounts for the slight variations in the annualized values 
relative to the use of unrounded data.

   Table 1--Annualized Costs (7% Discount Rate) of the Rule From 2017
                              Through 2026
                         [In millions of 2013$]
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                                                                Selected
                       Lease frequency                           option
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Low..........................................................       $4.1
Medium.......................................................        8.0
High.........................................................       15.7
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    The anticipated motorcoach-related fatality reductions over the 
ten-year period from 2017 through 2026 as a result of the rule are 
presented in Table 2 below for each of the three lease frequencies.

             Table 2--Threshold Analysis: Safety Benefits Necessary To Offset the Costs of the Rule
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                                                                Prevented fatal crashes    Prevented fatalities
                                                                 necessary over 10 year   necessary over 10 year
                        Lease frequency                          period of 2017 to 2026   period of 2017 to 2026
                                                                  for cost-neutrality      for cost-neutrality
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Low...........................................................                     1.65                     3.46
Medium........................................................                     3.24                     6.78
High..........................................................                     6.41                    13.42
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    In order for the final rule to achieve cost neutrality across the 
range of leasing frequencies considered, the rule must prevent between 
4 and 14 (determined as 3.46 and 13.42 rounded up to whole numbers) 
motorcoach-related fatalities, respectively, between 2017 and 2026.
    Therefore the plausible range of crash reductions from 2017 to 2026 
necessary to achieve cost neutrality with respect to this rule is 
between 2 and 7 (rounding up to whole numbers and based on 2.09413 
statistical fatalities per fatal motorcoach crash, documented in detail 
in Appendix A of the Regulatory Evaluation). Given the Agency's central 
assumption of a medium-leasing frequency, the FMCSA analysis shows that 
the prevention of 4 fatal crashes (3.24 rounded up)--approximately 
equivalent to the prevention of 7 fatalities (6.78 rounded up) over the 
ten years from 2017 through 2026 will be sufficient to offset the costs 
of the rule.

III. Legal Basis for the Rulemaking

    This rule is based on the authority of the Motor Carrier Act of 
1935 (1935 Act) and the Motor Carrier Safety Act of 1984 (1984 Act), as 
amended.
    The 1935 Act authorizes DOT to ``prescribe requirements for--(1) 
qualifications and maximum hours of service of employees of, and safety 
of operation and equipment of, a motor carrier; and (2) qualifications 
and maximum hours of service of employees of, and standards of 
equipment of, a motor private carrier, when needed to promote safety of 
operation'' (49 U.S.C. 31502(b)).\3\
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    \3\ See https://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap315.pdf.
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    The 1984 Act confers on 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)). Section 32911 of the Moving 
Ahead for Progress in the 21st Century Act (MAP-21) [Pub. L. 112-141, 
126 Stat. 405, 818, July 6, 2012] enacted a fifth requirement, i.e., to 
ensure that ``(5) an operator of a commercial motor vehicle is not 
coerced by a motor carrier, shipper, receiver, or transportation 
intermediary to operate a commercial motor vehicle in violation of a 
regulation promulgated under this

[[Page 30166]]

section, or chapter 51 or chapter 313 of this title'' [49 U.S.C. 
31136(a)(5)].\4\
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    \4\ See https://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap311-subchapIII-sec31136.pdf.
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    The 1984 Act also includes more general authority to ``(8) 
prescribe recordkeeping . . . requirements; . . . and (10) perform 
other acts the Secretary considers appropriate'' (49 U.S.C. 
31133(a)).\5\
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    \5\ See https://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap311-subchapIII-sec31133.pdf.
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    This rule imposes legal and recordkeeping requirements consistent 
with the 1935 and 1984 Acts on for-hire and private passenger carriers 
that operate CMVs, in order to enable investigators and the general 
public 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 has 
only indirect and minimal application to drivers of passenger-carrying 
CMVs--at most, their employers might require them to pick up a lease 
document and place it on the vehicle, though that task could also be 
assigned to other employees--FMCSA believes that coercion of drivers to 
violate the rule will not occur.
    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 final rule.

IV. Proposal

    On September 20, 2013, FMCSA published a notice of proposed 
rulemaking (NPRM) (78 FR 57822). The NPRM discussed the National 
Transportation Safety Board's (NTSB) recommendation that FMCSA regulate 
the leasing of passenger carriers in much the same way as it regulates 
the leasing of for-hire property carriers.

V. Discussion of Comments to NPRM

    Twelve submissions were received from the following parties: 
American Bus Association (ABA), United Motorcoach Association (UMA), 
Owner-Operator Independent Drivers Association (OOIDA), Greyhound 
Lines, Peter Pan Bus Lines, Coach USA, Adirondack Trailways, GE 
Capital, Dawson Bus Service, Advocates for Highway and Auto Safety 
(Advocates), NTSB, and Gobbell Transportation Services (Gobbell) on 
behalf of the Tennessee Motor Coach Association, and the motor coach 
operators that belong to the National Association of Small Trucking 
Companies.

Impact on Safety

    UMA, ABA, Greyhound, Coach USA, and Gobbell argued that the crashes 
discussed in the NPRM would not have been prevented by the proposed 
rule, had it been in effect; that the Agency has not demonstrated that 
the rule will improve safety; and that the rule has no clear safety 
benefits.

FMCSA Response

    As the NPRM said, ``this action is necessary to ensure that unsafe 
passenger carriers cannot evade FMCSA oversight and enforcement . . . 
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 those entities for regulatory violations . . 
.'' [78 FR at 57822].
    Unlike rules that require specific actions that would help to 
prevent crashes, such as the requirement for properly-adjusted brakes 
or rest opportunities for drivers, this final rule improves safety less 
directly and immediately by imposing new requirements to ensure the 
proper identity of the motor carrier responsible for the operation of 
the passenger-carrying vehicle. Through the proper identification of 
the entity, FMCSA and its State partners are in a better position to 
monitor the safety performance of the entity and remove from service 
unsafe passenger carriers. Therefore, the rule will improve safety, 
although not in the same manner as rules concerning vehicle maintenance 
and hours of service for drivers.
    The USDOT identification number allows the Agency to track the 
safety records of hundreds of thousands of different motor carriers and 
to assign to each of them the appropriate inspection and violation 
information. These data in turn feed the Agency's Safety Measurement 
System (SMS) and Pre-Employment Screening (PSP) programs. Similarly, 
the leasing requirements of this rule improve the ability of the Agency 
to attribute the inspection, compliance, and enforcement data collected 
by the Agency and its State partners to the correct carrier and driver, 
allowing FMCSA more accurately to identify unsafe and high risk 
carriers and initiate appropriate interventions.

Exception for Replacement Vehicles

    ABA, UMA, Greyhound, and Coach USA noted that mechanical failures 
can unexpectedly strand passengers at places where safe accommodations 
may not exist. The commenters argued that, in order to minimize the 
resulting inconvenience and possible danger to passengers, the carrier 
must obtain a replacement vehicle as quickly as possible, sometimes 
from an unknown lessor, and without waiting to negotiate and exchange 
written lease documents. These commenters requested an exception to the 
proposed leasing requirements for emergency situations. ABA requested 
an exemption for leased operation of another carrier's vehicle for a 
period of less than 30 days as a result of ``a mechanical breakdown or 
accident while a passenger-carrying commercial vehicle was en-route.''

FMCSA Response

    FMCSA agrees that negotiating and writing a lease for a replacement 
vehicle (perhaps with a driver) from a local passenger carrier and 
exchanging the appropriate documents could unnecessarily prolong the 
delays in acquiring alternative transportation for passengers, 
especially when there are no safe accommodations at the location where 
the vehicle became disabled. However, the benefits the Agency expects 
to derive from this rule would be lost if the requirement for a lease 
were simply waived for 30 days, as requested by ABA. To address these 
situations, FMCSA has adopted an exception that gives the operating 
carrier and the lessor up to 48 hours after the lessee takes possession 
of the replacement vehicle to put in writing the terms of their lease 
agreement [Sec.  390.303(a)(2)]. Because the replacement vehicle will 
pick up the stranded passengers and resume the interrupted trip almost 
immediately, a lessee may not be able to ensure that a copy of the 
lease is carried on the vehicle, as required by Sec.  390.303(f)(2). In 
this limited situation, a lessee that cannot transmit an electronic 
copy of the executed lease to the driver's wireless device (either 
because no such device is carried on the vehicle or no wireless 
connectivity is available) may carry a statement signed by the driver 
or any available company official that ``[Carrier A] has leased this 
vehicle to [Carrier B] pursuant to 49 CFR 390.303(a)(2).'' The Agency 
believes the 48-hour window provides ample time for the parties to 
document the transaction, given that it is unlikely the driver would 
have difficulty receiving

[[Page 30167]]

electronic information for more than 2 calendar days.
    This exception should be helpful to the many small companies that 
comprise most of the passenger carrier industry. This exception could 
also be used when a passenger vehicle is placed out-of-service (OOS) 
under the North American Standard OOS Criteria and a replacement 
vehicle is needed to resume the trip.

Financial v. Operational Leases

    GE Capital, UMA, and Coach USA disagreed with proposed Sec.  
390.301(b), which would have excluded from the scope of the rule any 
lease-financing arrangement with a duration of 5 years or longer. GE 
Capital--``on behalf of GE Capital business units that engage in lease-
financing of passenger-carrying commercial motor vehicles''--said that 
``the proposed draft is not clear enough to also exclude leases in the 
nature of a lease-financing of CMVs provided by independent and captive 
leasing and finance companies, banks, financial services corporations, 
broker/packagers and investment banks. . . . Financing Lessors are . . 
. not motor carriers . . . but passive owners/lessors of CMVs for the 
purpose of providing lease-financing of CMVs for the CMV industry 
without assuming any operational control, responsibility or oversight 
of the lease-financed CMVs . . .'' UMA said that ``Commercial 
institution leasing is certainly dominant; however, leasing by private 
investors, limited liability corporations, and limited partnerships 
remain commonplace. . . . Currently, it is routine practice for bus 
manufacturers or dealers to loan, rent, and lease buses for periods as 
short as a day.'' Coach USA stated that all of its buses are leased.

FMCSA Response

    The Agency never intended the proposed rule to be applicable to 
leases with non-carrier financial entities. The definition of a Lease 
in proposed Sec.  390.5 was ``a contract or arrangement in which a 
motor carrier grants the use of a passenger-carrying commercial motor 
vehicle to another motor carrier . . .'' [emphasis added]. To reinforce 
the point that the rule does not apply unless both parties to the lease 
are motor carriers, the text of the NPRM's Sec.  390.301(b) has been 
slightly modified to make it clear that the new requirements do 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, provided the financial 
organization, manufacturer or dealer is not itself a motor carrier. 
Assuming that GE Capital, banks, private investors, etc., are not 
themselves motor carriers, their lease-financing contracts with 
passenger carriers will not be subject to this rule. And even if bus 
manufacturers or dealers operate as passenger motor carriers, their 
leasing activity may well be managed by separately incorporated non-
carrier financial subsidiaries whose lease contracts would not be 
subject to this rule.
    The NPRM limited the lease-financing exception in Sec.  390.301(b) 
to leases with a period of 5 years or longer, but in view of UMA's 
comment that financial leases may have very short terms, FMCSA has 
removed the 5-year limit; Sec.  390.301(b)(1) applies to a financial 
lease of any duration.

Revenue Pooling Agreements

    ABA pointed out that ``[u]nder 49 U.S.C. 14302(b), an agreement to 
pool or divide services and earnings may be approved if the carrier 
participants assent and if the United States Surface Transportation 
Board finds that the agreement will be in the interest of better 
service to the public or of economy of operations and will not 
unreasonably restrain competition. . . . The proposal in the NPRM does 
not reference the STB, Section 14302 or any provision of the ICC 
Termination Act. Thus, there is a substantial issue as to whether and 
how any pooling agreement can be viewed or interpreted in connection 
with the NPRM.''
    Adirondack Trailways indicated that it is ``party to long-standing 
agreements for Through Service and Revenue Pooling (approved by the 
Surface Transportation Board) which account for tens of thousands of 
additional interchanges between and among other well-established and 
safe passenger carriers who are long-standing parties to such 
agreements.'' Adirondack argued that these agreements ``do not, and 
arguably cannot, contain all of the elements required by the newly 
proposed rules, e.g., to `specify the time and date when, and the 
location where the lease, interchange or other agreement begins and 
ends.' The nature of the interchanges under all of these agreements is 
such that interchanges often occur in remote locations, with a 
frequency that is both scheduled and unscheduled (often with no prior 
notice at all) for durations that are incapable of being predicted in 
advance due to spontaneous, ever-changing and unpredictable passenger 
demands.''
    Greyhound wrote that, in 2012, it ``operated a total of 8,089 trips 
with buses leased on an interchange basis from its pool or interline 
partners.'' It provided no details about these pool agreements.

FMCSA Response

    Although the NPRM would have exempted parties to a revenue pooling 
agreement approved by the Surface Transportation Board (STB) or an 
interline agreement from the requirement to provide receipts [Sec.  
390.303(d)(4)], the commenters almost unanimously recommended a broader 
exemption.\6\ FMCSA agrees that operations under revenue pooling 
agreements approved by the STB should be exempt from the lease and 
receipt requirements of this rule. Revenue pooling allows separate 
passenger carriers to offer essentially the same service as a single 
carrier on approved routes. Because the number of carriers in a pool is 
small, and the parties to the pool typically run the same trips on a 
daily basis (or even more frequently), the carrier responsible for 
safety on a particular trip can be narrowed to several carriers at most 
and often only two carriers. The final rule therefore imposes only a 
few requirements to enable the agency to track the safety performance 
of all members of the pool and specifically identify the carrier 
responsible for safety. Each vehicle must have available, either in 
hard copy or electronically, the number and date of the STB decision 
approving the pool and the names of the pool members. In addition, each 
vehicle must have available a list of (1) all routes covered by the 
pooling agreement, (2) the carrier or carriers authorized to operate on 
each route or portion of a route, and (3) all points of origin, 
destination, or interchange (should interchanges be part of the 
agreement). This list avoids the time, date, and location information 
to which Adirondack objected in its comments. However, all members of 
the revenue pool must mark the vehicles with the name of the operating 
carrier, as required by Sec.  390.21(f). The advantage of this 
exception is that the parties to a pooling agreement need not exchange 
lease documents and receipts.
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    \6\ It should be noted that the NPRM's references to ``interline 
agreements,'' usually paired with a discussion of ``revenue pooling 
agreements,'' were erroneous and have been removed from this final 
rule. Since ``interline agreements'' involve the transfer of 
passengers between motor carriers, but not the exchange of vehicles 
between those carriers, this rule does not apply to ``interline 
agreements.''
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Cost of the Rule

    Greyhound was critical of the NPRM's cost estimates. It commented, 
among other things, that:


[[Page 30168]]


    ``FMCSA has estimated annual recurring costs implementing all of 
the rules for 6,328 carriers to be $4,422,513 or an average cost per 
carrier of $698.88. Greyhound's estimate of the recurring costs of 
just the rules that would require new activities for Greyhound would 
be up to 336 times the average cost per carrier estimated by FMCSA. 
Even given that Greyhound is substantially larger than the average 
carrier, there clearly is a disconnect somewhere. The primary 
difference appears to be the very minimal personnel cost FMCSA 
attributes to preparing the detailed information required in the 
leases or in the trip information sheet required in the interchange 
situations in lieu of master lease agreements, and then tying that 
information directly to the receipts.''
    Greyhound also stated that: ``In addition, FMCSA attributes zero 
cost to the preparation, affixing and removal of the required bus 
signage and to the preparation, signing and storage of the receipts 
and the supervision of these activities. Clearly, both costs are far 
from negligible.''
    ``Greyhound estimates that to complete all of these activities 
for each trip will require an average of 15-30 minutes per trip,'' 
and given the number of leased trips Greyhound made in 2012, its 
labor costs to comply with the new requirements would be $98,000 to 
$196,000. Adding 20% for supervision, supplies, filing and storage 
would bring those figures up to $118,000 to $235,000 per year.

    In short, Greyhound argued that ``FMCSA severely underestimates the 
costs through miscalculation of some costs and disregard of others.''
    Peter Pan supplied no details, but said that, ``[g]iven our level 
of leasing, even if we could comply, we have estimated our cost of 
compliance at over $100,000 annually.''

FMCSA Response

    The Agency has revised some of its cost calculations based on 
comments from Greyhound and others. The Agency updated the time frame 
of this analysis to consider the 10 year span of 2017 to 2026, which 
led to increases in certain components of the rule's costs and 
benefits. Projected growth in the motor carrier industry led to an 
increased number of affected carriers, thereby increasing the rule's 
costs. Similarly, inclusion of estimated lease counts provided by 
Greyhound raised the number of projected leases, adding to the rule's 
costs. Application of the most recent guidance from the Office of the 
Secretary of Transportation regarding the value of a statistical life 
(VSL) in future years increased the monetized benefit resulting from 
reductions in fatal crashes. A summary of the new estimates contained 
in the separate Regulatory Evaluation for this rule is presented below 
in Section VII.A. The cost of this rule depends primarily on the number 
of lease transactions subject to its requirements. That number is not 
precisely known, either by FMCSA or--it would appear--by the passenger 
carrier industry. Greyhound and Peter Pan provided information about 
their own operations (which cannot be extrapolated to the rest of the 
industry, given the unusually large size of these two companies), but 
no commenter took issue with the Agency's three-tier estimates of 
leasing volume. The final rule, therefore, retains the NPRM's 
assumptions about low-, medium-, and high-frequency leasing. Our cost 
analysis assigns a completion time for each separate task needed to 
comply with the rule. We believe that these times are conservative, 
especially after repetition makes the requirements familiar to carrier 
employees, and that the corresponding costs are also conservatively 
high. Nonetheless, the Agency's threshold analysis, discussed in 
Section VII.A., shows that the rule would be cost-neutral if it 
prevented approximately 4 fatal passenger carrier crashes (3.24 rounded 
up) between 2017 and 2026. This is mathematically equivalent to the 
prevention of one fatal passenger carrier crash every 3.09 years (3.09 
years = 1 crash / (3.24 crashes / 10 years)). In other words, the 
annual cost of the rule is approximately one-quarter of the cost of a 
single passenger carrier crash. FMCSA believes that enhanced monitoring 
of passenger carrier leasing, and of the carriers involved in such 
leasing, will have beneficial effects that readily cover these costs.

Common Ownership and Control

    Coach USA, a non-carrier that controls many passenger carriers, 
requested ``an exemption from the requirements of proposed section 
390.303 for vehicle exchanges between affiliated companies. By 
`affiliated companies,' Coach USA means companies that share a common 
parent company.''
    Coach USA described the situations that it believes demand and 
justify an exemption.

    For example, Megabus Southeast LLC . . . and Megabus Northeast 
LLC . . . currently engage in an interline-type arrangement for 
transporting passengers between Atlanta, Georgia and Washington, DC. 
Under this arrangement, Megabus Southeast transports passengers from 
Atlanta to Christiansburg, Virginia. In Christiansburg, a Megabus 
Northeast driver assumes control of the vehicle and the vehicle is 
leased to Megabus Northeast for the trip from Christiansburg to 
Washington and back to Christiansburg. This leasing of vehicles from 
Megabus Southeast to Megabus Northeast occurs 14 times per week (7 
times in each direction). Coach USA expects to set up similar 
interline arrangements among its Megabus companies in the near 
future. In addition, the issue of leases among affiliated Coach USA 
companies arises on a regular basis in situations where a carrier 
providing scheduled service needs to add extra sections to 
accommodate higher than normal volume of passengers. This typically 
occurs around weekends and holidays. In such situations, the 
provider of scheduled service will lease a bus from an affiliated 
provider of charter service. In a typical week, approximately 40 
buses are leased by Coach USA companies from an affiliated company 
for this purpose. On holidays, it can be as many as 50 buses a day. 
Attempting to comply with the proposed regulations in the situations 
described above would create an enormous administrative and 
paperwork burden on the Coach USA companies while serving no useful 
purpose.

    Similar comments were submitted by Adirondack Trailways, which is 
commonly owned and controlled with two other carriers, Pine Hill 
Trailways and New York Trailways. Adirondack stated that:

    [t]hese three companies interchange buses and drivers on a 
regular basis every single day. On a slow day there are about two 
dozen such instances, and on weekends and holidays that number is 
much greater. In other words, these three commonly owned passenger 
carriers interchange buses and drivers more than ten thousand times 
every year. The proposed regulations do not appear to consider this 
in the analysis or in the regulations. . . . These agreement[s] (for 
commonly owned and controlled carriers, through service, revenue 
pooling, etc.) do not, and arguably cannot, contain all of the 
elements required by the newly proposed rules, e.g., to `specify the 
time and date when, and the location where the lease, interchange or 
other agreement begins and ends.' The nature of the interchanges 
under all of these agreements is such that interchanges often occur 
in remote locations, with a frequency that is both scheduled and 
unscheduled (often with no prior notice at all) for durations that 
are incapable of being predicted in advance due to spontaneous, 
ever-changing and unpredictable passenger demands. These pre-
existing agreements among commonly owned and controlled passenger 
carriers and other well established safe passenger carriers are not 
the problem FMCSA is attempting to solve and should not be affected 
by the proposed regulations.

FMCSA Response

    FMCSA agrees that there is no need for individual leases and 
receipts when vehicles are interchanged between or among commonly owned 
and controlled passenger carriers. Such a requirement would add nothing 
to these carriers' standard business practices and impose unnecessary 
paperwork. It is likely that all of the ``family'' members are 
operating according to the same administrative procedures and safety 
standards. However, FMCSA is imposing a few limits on this exception

[[Page 30169]]

to ensure the Agency's ability to identify the carrier responsible for 
safety and regulatory compliance. This is necessary because large 
holding companies seek to minimize their regulatory and tort exposure 
by dividing their motor carrier business into multiple limited 
liability companies (LLCs) while operating them very much like a single 
corporation. Therefore, each driver in a group of commonly owned and 
controlled motor carriers must carry a summary document listing all 
members of the corporate family, along with their USDOT numbers, 
business addresses, and contact telephone numbers. The document must 
also identify the operating carrier, the trip (by charter number, run 
number, or some other identifier), the vehicle (by at least the last 6 
digits of the Vehicle Identification Number (VIN) \7\), and the date of 
the trip. This document is subject to the record retention requirements 
of Sec.  390.303(d). Like the parties to a pooling agreement, however, 
commonly owned and controlled carriers need not prepare leases or 
receipts when they exchange vehicles.
---------------------------------------------------------------------------

    \7\ The vehicle identification number (VIN) is a series of 
Arabic numbers and Roman letters that is assigned by a motor vehicle 
manufacturer to a motor vehicle for identification purposes in 
accordance with 49 CFR part 565, Vehicle Identification Number (VIN) 
Requirements.
---------------------------------------------------------------------------

Passenger Carriers Chartering Other Passenger Carriers

    ABA said that the NPRM ``does not define, or even mention, the term 
`charter,' which is how motorcoach carriers of passengers view the 
hiring or interchange of vehicles. Therefore, there is a substantial 
issue as to the relation of `charter' to `lease' and how these terms 
will be interpreted for purposes of the regulation.''
    UMA commented that:

    Interstate passenger carriers routinely charter the services of 
other passenger carriers for emergencies or capacity reasons. Once 
the compensatory amounts and arrangements are confirmed, a charter 
contract is often executed, and an insurance certificate is 
obtained. It is generally considered that the chartered company 
assumes all responsibilities for regulatory compliance. Thousands of 
buses and motorcoaches are inspected annually operating under a 
charter contract from another passenger carrier while the chartered 
carrier assumes responsibility for their bus and driver regulatory 
compliance. This system is so effective, FMCSA should completely 
evaluate the positive attributes of these charter arrangements 
versus the possibilities that a lease may actually reduce an 
otherwise compliant chartered passenger carrier's responsibilities 
and motives; thereby reducing their safety and compliance concerns.

FMCSA Response

    The NPRM did not specifically discuss ``passenger carriers 
chartering other passenger carriers'' because the Agency believed it 
was sufficiently clear that such arrangements, depending on their 
specific terms, either would not be subject to the proposed rule at all 
because they involved no leases, or would be subject to the rule 
because the ``chartered'' carrier was leasing vehicles and drivers to 
another passenger carrier. Based upon the comments received, it is 
apparent that clarification is needed.
    A passenger carrier that agrees to transport a tour or travel group 
on a particular trip may find itself without the capacity to 
accommodate the group. In that case, the carrier might transfer the 
contract to a second carrier that has the necessary capacity. The 
second carrier may or may not pay a fee to the transferring passenger 
carrier. In any case, this rule would not apply to that transaction 
because the first carrier has not leased equipment from the second. The 
contract has been reassigned and the second carrier has undertaken the 
trip in its own name on its own authority with its own vehicle(s), and 
is therefore responsible for compliance with the FMCSRs. As a good 
business practice, the transferring passenger carrier should of course 
immediately notify the tour or travel group that another carrier will 
provide the transportation. Disgruntled customers have occasionally 
contacted FMCSA when such notification does not occur and an unknown 
carrier arrives unexpectedly to pick up a group of passengers. While 
the final rule does not address communication when a passenger 
transportation contract is completely transferred to another carrier, 
the industry should note that the interests of tour operators and their 
customers are not adequately protected when such contracts are 
transferred among carriers without prior notice to the passengers 
affected by the change.
    On the other hand, a passenger carrier that needs one or more 
additional vehicles may subcontract with another carrier to supply the 
vehicle(s) and possibly also driver(s) while still nominally performing 
the contract with the tour or travel group. When a passenger carrier 
hires or charters (i.e., contracts for) the services of another 
passenger carrier to help perform a contract, it has leased vehicles 
and services from that carrier. In these circumstances, a lease must be 
prepared and receipts exchanged in compliance with this rule to 
indicate that the prime contractor is responsible for the lessor's 
(i.e., subcontractor's) regulatory compliance. A copy of the lease or 
written agreement must be on the vehicle obtained from the 
subcontracted lessor, and the hiring passenger carrier's legal name and 
USDOT number must be marked on the vehicle as prescribed in 49 CFR 
390.21. While the prime contractor (i.e., the lessee carrier) may 
require the subcontractor to comply with all applicable provisions of 
the FMCSRs and to indemnify it for any civil penalties assessed for 
violations of those provisions by the subcontracted lessor, FMCSA and 
its State partners will hold both the prime contractor and its 
subcontractor responsible for completion of the lease described in this 
final rule.
    In this situation described above, the lessee carrier is fully 
responsible for the regulatory compliance of the lessor carrier and 
must mark the vehicles leased from the lessor with the information 
required by 49 CFR 390.21(f). However, because the name and/or logo of 
the chartered or hired passenger carrier is likely to be displayed 
prominently on the vehicles, passengers might overlook the smaller 
placard required by Sec.  390.21(f)(2) and assume that a different 
carrier was providing the transportation. To reduce the possibility of 
confusion, FMCSA has added a provision to the rule that requires a 
passenger carrier that subcontracts all or a portion of a 
transportation service to notify the tour or travel group within 24 
hours of establishing the subcontracting arrangement that all or some 
of the transportation will be performed by a lessor subcontractor.
    This rule holds the lessee carrier directly responsible for 
violations of the FMCSRs. While UMA asserted that the chartered 
passenger carrier generally assumes all responsibilities for regulatory 
compliance, this final rule does not prevent the two carriers from 
including in the charter (i.e., lease) contract a provision making the 
chartered carrier responsible for such compliance, with appropriate 
indemnification language for penalties imposed by regulatory agencies. 
The relationship between the two parties remains that of a lessor and 
lessee. The ``charter contract'' described by UMA appears to involve 
negotiation and paperwork burdens similar to those associated with a 
lease. The net burden imposed by this rule therefore should be minor.

Penalties

    Advocates generally supported the NPRM, but argued that ``because 
of the seriousness of the abuses that the provisions are intended to 
prevent,

[[Page 30170]]

including, potentially, willful misconduct that attempts to evade FMCSA 
out-of-service orders, . . . specific criminal and civil penalties 
should be referenced as applicable to the more serious violations of 
the lease/interchange restrictions.''

FMCSA Response

    FMCSA does not believe that the regulatory language in subpart F of 
part 390 should include the maximum applicable statutory penalties. The 
penalties available to the Agency are adequately described in subpart G 
and appendices A and B of part 386. However, while considering this 
comment, it became apparent that the NPRM was not sufficiently explicit 
in assigning responsibility for violations of the proposed rule. We 
have therefore added paragraph (c) to Sec.  390.301 to clarify that 
both the lessor and lessee are liable for civil penalties if they 
exchange vehicles without the required documentation, or prepare a 
lease, interchange agreement, or other agreement that fails to meet the 
requirements of subpart F.

Lease Disclosure on Tickets

    Advocates argued that the vehicle marking required by the NPRM is 
insufficient to provide notice of the arrangement to the public prior 
to the purchase of tickets. Advocates stated:

    At the very least, the public must be given notice of the lease/
interchange arrangements at the point of sale including locations 
such as terminals and passenger-carrying motor carrier and 
associated broker Web sites where tickets are available for sale, as 
soon as the lease/interchange agreement is signed. This will allow 
consumers at the point of sale the opportunity to decide whether to 
purchase tickets for that trip. Similar to online disclosure by 
airlines that certain flights will be crewed and operated by another 
airline, or using equipment provided by another airline, motorcoach 
riders should have the same notice and opportunity to decide whether 
to nevertheless purchase tickets for that bus ride or to make other 
travel arrangements. Moreover, consumers who purchased tickets and 
were not provided with disclosure of the lease/interchange 
arrangement, or were unaware of the lease/interchange arrangement 
until arrival at the departure location, at the time of boarding, 
should be afforded the option of a refund if they decide at that 
point not to travel on the leased CMV.

FMCSA Response

    The Agency does not agree that advance notice of lease and 
interchange arrangements must be provided to customers. Many of the 
motorcoach services that have expanded significantly in recent years 
are so-called curbside operations that do not require, and sometimes do 
not allow, advance ticketing. Because demand for service cannot always 
be predicted, these carriers may need to obtain additional vehicles 
from other carriers on short notice. This rule requires lessors and 
lessees to document these arrangements and mark the vehicles 
appropriately, but changing the curbside, on-demand business model is 
not within the rule's scope or purpose. These carriers may not know 
until shortly before a trip whether they will need to operate leased 
vehicles on that trip and therefore cannot give potential customers 
advance notice of the lease arrangement. Such notice may be more 
compatible with other types of motorcoach operation, especially those 
involving commonly owned and controlled carriers and revenue pooling 
agreements, but even a segment-specific notice requirement would 
involve significant changes in operating practices. This issue was not 
raised in the NPRM and, given its far-reaching implications for the 
industry, cannot be included in today's final rule because the public 
was not provided with an opportunity to comment on a regulatory 
proposal to address the issue. The Agency does not find it advisable to 
delay this rule, and thus defer its benefits, while considering whether 
to expand its reach as recommended by Advocates.

Out-of-Service Carriers

    NTSB supported the NPRM but said that

the FMCSA should do more to protect passenger safety. The FMCSA 
should require passenger carriers that have been prohibited from 
operating in interstate commerce for any reason and that intend to 
lease, rent, interchange, or otherwise convey the control of any of 
their vehicles to another carrier to obtain written authorization 
from the FMCSA to conduct such transactions. This will enable the 
FMCSA to research the safety history of the prospective lessee and 
determine if it has demonstrated adequate safety practices for its 
vehicles and drivers.

FMCSA Response

    Section 390.305 of the NPRM proposed to require passenger carriers 
that had been placed out of service to notify FMCSA by email or U.S. 
Mail, either 3 or 5 business days, respectively, before transferring 
control of its vehicles to another passenger carrier. The FMCSA has 
decided that notification and related issues would be best addressed in 
another rulemaking. Therefore, the language of Sec.  390.305 proposed 
in the NPRM has been removed.

Miscellaneous Comments

    OOIDA asked several questions and provided comments about the NPRM: 
(1) Why did the Agency limit the rule to motor carrier lessors rather 
than all lessors of passenger vehicles? (2) Proposed Sec.  
390.303(f)(3) said that nothing required by paragraph (f) was 
``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.'' 
OOIDA asserted that paragraph (f)(3) had no legal effect. (3) ``FMCSA 
should clarify that the Lessee's responsibility to maintain public 
liability insurance required by federal law means that it cannot 
delegate such responsibility, including delegating the cost of such 
insurance, to any other party, including the Lessor. . . . OOIDA 
believes FMCSA does not need to revise the proposed language, but 
should explain that it means that by having the responsibility to 
maintain public liability insurance, the Lessee may not avoid 
responsibility for the cost of the insurance by passing it on to 
another party, directly or indirectly.''

FMCSA Response

    (1) The 1984 Act (49 U.S.C. 31136) gives the Agency jurisdiction 
over operators of commercial motor vehicles, but not over equipment 
lessors generally. The rule is therefore limited to motor carrier 
lessors. (2) Section 390.303(f)(3) did not claim to have legal effect. 
On the contrary, it was and is a disclaimer of any such effect. The 
provision has been re-designated as Sec.  390.303(b)(4)(iii) in the 
final rule. (3) While the lessee must maintain the evidence of 
financial responsibility required by 49 CFR part 387, FMCSA has no 
authority to change a contractual term that obligates the lessor to pay 
the cost of the insurance the lessee is required to maintain.

MCSAP State Enforcement Plans

    No comments were received about the Agency's intention to require 
our State and local partners to adopt this final rule pursuant to the 
Motor Carrier Safety Assistance Program (MCSAP) (49 CFR part 350). 
Therefore, as proposed, State and local agencies participating in MCSAP 
will be required to include the passenger-carrying CMV lease and 
marking requirements of this rule in their annual enforcement plans. As 
mentioned in the NPRM, our MCSAP partners are not required to enforce 
the CMV leasing regulations in part 376. However, the focus of this 
final rule is safety, and FMCSA believes that States

[[Page 30171]]

must adopt and enforce compatible leasing and marking regulations for 
all motor carriers operating passenger-carrying CMVs in interstate 
commerce.

VI. Section-by-Section Description of Final Rule

    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. Because 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 and are applicable only to Sec. Sec.  390.21(f) and 390.301 
through 390.305. 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 for 
periods of 30 calendar days or less, is amended to limit its 
application to ``property-carrying CMVs,'' as intended when this 
paragraph was adopted in 1990 in response to a petition from the Truck 
Rental and Leasing Association. The Federal Highway Administration 
noted in the preamble to the final rule that ``[t]he petition 
articulated compliance problems with a segment of the trucking industry 
that had not been considered during the promulgation of the marking 
requirement.'' Paragraph (e) was added to provide an alternative method 
for compliance with the previous marking requirements in Sec.  390.21 
(55 FR 6991, February 28, 1990). Under today's rule, that alternative 
method is not available in the case of rented passenger-carrying CMVs.
    Instead, current paragraphs (f) and (g) of Sec.  390.21 are 
redesignated as paragraphs (g) and (h), and a new paragraph (f) is 
added to cover the marking of Leased and interchanged passenger-
carrying commercial motor vehicles. The marking in new paragraph (f) 
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 
Sec.  390.5 must 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 
12345678.''
    The final rule adds to part 390 a new subpart F entitled ``Lease 
and Interchange of Passenger-Carrying Commercial Motor Vehicles.'' The 
``Applicability'' statement in Sec.  390.301(a) makes clear that--with 
the exceptions noted--the subpart applies to all leases or interchanges 
of passenger-carrying CMVs between motor carriers, no matter how brief. 
Paragraph (b), however, explains (1) that the rule does not cover 
leases between carriers and vehicle manufacturers or dealers (providing 
they are not themselves motor carriers) because most of these contracts 
are likely to be in the nature of purchase agreements, unlike the 
routine or casual transfers of vehicles between passenger carriers to 
meet temporary fluctuations in demand; (2) that leases and receipts are 
not required when passenger vehicles are exchanged between or among 
commonly owned and controlled motor carriers; and (3) that leases and 
receipts are not required when passenger carriers that are party to a 
revenue pooling agreement approved by the Surface Transportation Board 
exchange or interchange passenger vehicles between or among themselves 
on routes subject to the pooling agreement and mark the vehicle 
appropriately. Paragraph (c) provides that if the use of a passenger-
carrying commercial motor vehicle requires a lease, but the motor 
carriers fail to make the lease or fail to meet all applicable 
requirements of subpart F, both motor carriers shall be subject to a 
civil penalty specified in 49 CFR part 386, Appendix B, paragraphs 
(a)(1) or (a)(3).
    Section 390.303 specifies the contents of lease and interchange 
documents. Paragraph (a)(1) requires a written lease or interchange 
document, or a written agreement covering any less formal temporary 
transfer of a passenger-carrying CMV.
    Paragraph (a)(2) creates an exception to the requirement that the 
lease or interchange agreement be signed before the vehicle is operated 
under the terms of the agreement. When a passenger vehicle is disabled 
during a trip, the lessor and lessee of the replacement vehicle may 
postpone the completion of a written lease for up to 48 hours.
    Paragraph (b) requires the lease, interchange agreement, or other 
agreement to contain: (1) The name of the vehicle manufacturer, the 
year of manufacture, and the last 6 digits of the Vehicle 
Identification Number; (2) the legal names, contact information, and 
signatures of both parties; (3) the time and date when the lease begins 
and ends and other specific information; (4) a statement that the 
lessee has exclusive possession and control of the leased vehicle and 
is responsible for regulatory compliance; and (5) a statement that the 
lessee is responsible for compliance with the insurance requirements of 
49 CFR part 387.
    Paragraph (c) requires an original and two copies of each lease, 
etc., with one copy to be kept on the leased passenger vehicle. The 
parties may prepare, sign, exchange, and maintain the lease (and any 
other documents required by this rule) in electronic \8\ or paper 
format. Leases generated, exchanged, or maintained using electronic 
methods do not satisfy FMCSA requirements unless they are legible and 
capable of being retained and accurately reproduced for reference by 
any party entitled to access them.
---------------------------------------------------------------------------

    \8\ Electronic Signatures in Global and National Commerce Act 
(Pub. L. 106-229, 114 Stat. 464, 15 U.S.C. 7001-7031) was signed 
into law on June 30, 2000. This act promotes the use of electronic 
contract formation, signatures, and recordkeeping in private 
commerce by establishing legal equivalence between traditional 
paper-based methods and electronic methods. See 76 FR 411 (January 
4, 2011) for FMCSA regulatory guidance concerning electronic 
signatures and documents.
---------------------------------------------------------------------------

    Paragraph (d) requires that copies of each lease or other agreement 
or statement must be retained for one year after expiration of the 
lease or agreement.
    Paragraph (e) includes detailed requirements for the preparation of 
receipts when vehicles are surrendered to the lessee and returned to 
the lessor.
    Paragraph (f) specifies how the leased equipment is to be marked 
and identified in leases or other agreements.
    Section 390.305 requires that, when a passenger carrier with an 
original charter contract leases vehicles from a subcontractor carrier 
to perform the charter, it must notify the charter party within 24 
hours after hiring the subcontractor that the transportation will be 
provided by the subcontractor.

VII. Regulatory Analyses

A. Regulatory Planning and Review

    FMCSA has determined that this action is a non-significant 
regulatory

[[Page 30172]]

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). The estimated economic 
costs of the rule do not exceed the $100 million annual threshold. 
Moreover, the Agency does not expect the rule to generate substantial 
congressional or public interest. This rule has not been reviewed 
formally by the Office of Management and Budget (OMB).
    Due to the lack of data that would enable FMCSA to quantify the 
safety benefits of this final rule, the separate Regulatory Evaluation 
in the docket relies upon a threshold analysis. There are no 
statistical or empirical studies that directly link the written 
documentation of a vehicle lease agreement to enhanced motor carrier 
safety. And though the Agency has described above the many practical, 
informational, and administrative benefits of this final rule, it is 
unable to quantify its safety benefits, typically measured in terms of 
avoided crashes. In accordance with OMB guidance (Circular A-4),\9\ a 
Federal regulatory agency has the option to conduct a threshold 
analysis in lieu of a cost-benefit analysis in cases in which either 
the benefits (as in this case) or the costs are unquantifiable, or 
difficult to quantify. A threshold analysis estimates the quantified 
costs of a rule in terms of the non-quantified benefits (in this 
instance, the number of passenger-carrier crashes that would have to be 
prevented by the rule to equal its costs). The rule is expected to 
provide safety benefits that are not directly or easily quantifiable. 
Hence, the estimated costs of the regulatory options in this final rule 
are compared to the number of passenger-carrier-related fatalities, 
currently estimated at $20.3 million per crash \10\ during calendar 
year 2017 \11\ that would have to be avoided to make the rule cost-
neutral.
---------------------------------------------------------------------------

    \9\ www.whitehouse.gov/omb/circulars_a004_a-4.
    \10\ The FMCSA estimate for calendar year 2013 is $19.5 million. 
The fatal crash estimate is based on the current VSL of $9.2 
million, plus other cost elements, such as injuries, medical, 
emergency services, property damage, pollution, and delay. See 
Appendix A--Motorcoach Crash Cost Estimation Methodology at the end 
of the final Regulatory Evaluation for a detailed analysis of this 
estimate. Source: Zaloshnja, E. and Miller, T. (2006). ``Unit Costs 
of Medium and Heavy Truck Crashes,'' Final Report for FMCSA, Federal 
Highway Administration. Accessed December 16, 2013, at: https://mcsac.fmcsa.dot.gov/documents/Dec09/UnitCostsTruck%20Crashes2007.pdf.
    \11\ The first full year during which the rule is expected to be 
in effect is 2017.
---------------------------------------------------------------------------

    Additionally, the final rule is expected to provide many practical 
benefits to the public and to FMCSA. These benefits include more 
effective oversight and enforcement, through proper identification of 
passenger carriers and proper documentation of lease agreements--both 
of which help ensure accurate identification of the carrier responsible 
and liable for operation of the leased vehicle. Additionally, the 
proper marking of vehicles provides useful information to the traveling 
public and State and Federal enforcement personnel.
Passenger Carriers Subject to This Final Rule
    Passenger carriers provide many types of service, including 
transit, school, charter, tour, sightseeing, airport shuttle, commuter, 
and scheduled intercity routes. The motorcoach industry, which largely 
provides scheduled service, charter, tour and sightseeing services, 
provided more than 637 million passenger trips in 2012. FMCSA has 
jurisdiction over 29,000 passenger carriers of various types, 
including, but not limited to, carriers that are authorized for-hire, 
exempt for-hire, private (business), and private (non-business).
    The carrier population impacted by this rule consists of motor 
carriers transporting passengers in interstate commerce in CMVs that 
either (1) have a gross vehicle weight rating or gross vehicle weight 
of at least 10,001 pounds, whichever is greater; (2) are designed or 
used to transport more than 8 passengers (including the driver) for 
compensation; or (3) are designed or used to transport more than 15 
passengers (including the driver) and are not used to transport 
passengers for compensation [49 U.S.C. 31132(1)(A)-(C)]. For purposes 
of the Regulatory Evaluation the total number of private carriers that 
meet the terms of Sec.  31132(1)(C) (16+ passengers) was reduced by 90 
percent because private passenger carriers do not lease vehicles to a 
significant degree.
    Table 3 below shows the number of passenger carriers considered for 
such inclusion, based on the carrier population in FMCSA's Motor 
Carrier Management Information System as of June, 2014. Passenger motor 
carriers of five types are listed in Table 3 below: (1) For-hire motor 
carrier,\12\ authorized by FMCSA under 49 U.S.C. chapter 135; (2) For-
hire motor carrier, exempt under 49 U.S.C. chapter 135, but subject to 
chapters 311, 313, and 315, and using CMVs designed to transport 9 or 
more passengers (including the driver); (3) For-hire motor carrier, 
exempt under 49 U.S.C. chapter 135, but subject to chapters 311, 313, 
and 315, and using CMVs designed to transport 16 or more passengers 
(including the driver); (4) Private motor carrier of passengers 
(business); \13\ and (5) Private motor carrier of passengers (non-
business).\14\ The private passenger carriers in categories (4) and (5) 
are reduced by 90 percent, as referred to in the previous paragraph and 
in the final rule's Regulatory Evaluation.\15\
---------------------------------------------------------------------------

    \12\ Defined at 49 CFR 390.5.
    \13\ Defined at 49 CFR 390.5.
    \14\ Defined at 49 CFR 390.5.
    \15\ See the final rule's Regulatory Evaluation in the docket.
    \16\ The count of passenger carriers in the first row of Table 3 
is 12,699. This count is greater than the count of the unique number 
of passenger carriers (11,183, based on the same source data) 
because carriers operating in more than one of the roles presented 
in Table 3 are counted here as distinct carriers for each role. This 
approach potentially overstates the number of affected carriers, 
depending on the degree to which carriers engaged in multiple roles 
divide driver and vehicle time between roles.

  Table 3--Estimated Number of Passenger Carriers Fully Subject to Final Rule Based on Carrier Population as of
                                                    June 2014
----------------------------------------------------------------------------------------------------------------
                                                     For hire                     Private (not for compensation)
                                 -------------------------------------------------------------------------------
                                                     Exempt 9+      Exempt 16+
                                    Authorized      passengers      passengers       Business      Non-business
----------------------------------------------------------------------------------------------------------------
Carriers in 2014 \16\...........           5,945             296             180           2,605           3,673
Percentage Excluded.............             n/a             n/a             n/a             90%             90%
Carriers Affected by the Rule...           5,945             296             180             261             367
                                 -------------------------------------------------------------------------------
    Total Affected..............                                       7,049
----------------------------------------------------------------------------------------------------------------


[[Page 30173]]

    The Regulatory Evaluation in the docket estimates that 7,049 
passenger carriers will be affected by this rule in 2017: (1) 5,945 
authorized for-hire (they have operating authority from FMCSA), (2) 296 
exempt 9+ for-hire motor carriers, (3) 180 exempt 16+ for-hire motor 
carriers, (4) 261 private business motor carriers, and (5) 367 private 
non-business motor carriers.
    The Regulatory Evaluation considers a baseline no-action 
alternative (Option 1) and two regulatory options (Options 2 and 3). 
The threshold analysis considers three scenarios \17\ intended to 
capture the possible variations in leasing frequency. The scenarios are 
based on the frequency with which the average passenger carrier with 
6.6 power units \18\ leases other passenger-carrying power units. The 
rates are: (1) Low frequency, (2) medium frequency, and (3) high 
frequency. No commenter took issue with the Agency's three-tier 
estimates of leasing volume. The final rule, therefore, retains the 
NPRM's assumptions about low-, medium-, and high-frequency leasing. The 
frequency assumptions are listed below in Table 4.
---------------------------------------------------------------------------

    \17\ Scenarios determined by FMCSA experts and contacts with 
industry.
    \18\ See Section 2.3 of this final rule's Regulatory Evaluation 
for detail; the estimate of average passenger carriers operating of 
6.6 power units is derived from MCMIS and SMS snapshots as of June 
20, 2014.

                                         Table 4--Total Leases Per Year
----------------------------------------------------------------------------------------------------------------
                                                  Lease frequency
                                      ---------------------------------------                Notes
                                           Low         Medium        High
----------------------------------------------------------------------------------------------------------------
Peak Leases Per Month................            4            8           16  ..................................
Peak Months..........................            4            4            4  May-August.
Off-Peak Leases Per Month............            2            4            8  ..................................
Off-Peak Months......................            8            8            8  September-April.
                                      --------------------------------------------------------------------------
    ,s,s,nTotal......................           32           64          128  (8 x 4) + (4 x 8).
----------------------------------------------------------------------------------------------------------------
Source: FMCSA Commercial Passenger Carrier Safety Division staff experience and contacts with industry.

Estimated Costs of the Final Rule
    The estimated costs of the final rule are presented in three parts: 
(1) The annual cost to active passenger carriers; (2) the one-time cost 
in year one; and (3) the annual cost for passenger carriers with 
original charter contracts to notify the charter party within 24 hours 
after hiring a subcontractor. The first part is an estimate of the four 
cost components mentioned above--(a) lease documentation, (b) lease 
copying, (c) lease receipt documentation, and (d) vehicle marking. 
Table 5 below \19\ summarizes the costs.
---------------------------------------------------------------------------

    \19\ Costs, benefits, and net benefits are not shown for the no-
action (Option 1) alternative, as they are zero in all instances.

                                  Table 5-Breakout of Costs of the Rule in 2017
----------------------------------------------------------------------------------------------------------------
                                                           Option 3
                                       ------------------------------------------------           Notes
                                              Low           Medium           High
----------------------------------------------------------------------------------------------------------------
Lease Documentation...................      $1,648,000      $3,221,000      $6,368,000  $6.54 x 492,578.
Lease Copying.........................          76,000         148,000         292,000  0.30 x 492,578.
Lease Receipt Copy....................         151,000         296,000         584,000  0.60 x 492,578.
Vehicle Marking.......................          10,000          20,000          39,000  0.04 x 492,578.
Cost to All Carriers in 2017..........       1,885,000       3,685,000       7,283,000  Sum of the above 4.
One-Time Cost to All-Carriers.........       9,889,000      19,329,000      38,209,000  Lease Negotiation.
Annual Cost to Notify Charter Parties.         401,000         795,000       1,581,000  Charter Party
                                                                                         Notification.
----------------------------------------------------------------------------------------------------------------


 
                                                           Option 3
                                       ------------------------------------------------           Notes
                                              Low           Medium           High
----------------------------------------------------------------------------------------------------------------
Lease Documentation...................      $1,648,000      $3,221,000      $6,368,000  $6.54 x 492,578.
Lease Copying.........................          76,000         148,000         292,000  0.30 x 492,578.
Lease Receipt Copy....................         151,000         296,000         584,000  0.60 x 492,578.
Vehicle Marking.......................       2,016,000       3,941,000       7,790,000  8.00 x 492,578.
Cost to All Carriers in 2017..........       3,891,000       7,606,000      15,034,000  Sum of the above 4.
One-Time Cost to All-Carriers.........       9,889,000      19,329,000      38,209,000  Lease Negotiation.
Annual Cost to Notify Charter Parties.         401,000         795,000       1,581,000  Charter Party
                                                                                         Notification.
----------------------------------------------------------------------------------------------------------------

    The second part is the one-time cost of lease negotiation (from 
Tables 7, 8, and 9 in the final rule's Regulatory Evaluation).\20\ The 
third part is an estimate of the cost to passenger carriers to notify 
contracted passenger groups (from Table 10 in the final rule's 
Regulatory Evaluation).\21\ As mentioned above, this cost applies to a 
small proportion of the impacted population of passenger carriers. The 
estimated cost of the final rule is thus the sum of these three parts.
---------------------------------------------------------------------------

    \20\ See the final rule's Regulatory Evaluation in the docket.
    \21\ Ibid.
---------------------------------------------------------------------------

    The annualized costs of the rule discounted at seven percent for 
Options 2 and 3 for low-, medium-, and high-leasing frequency for the 
period from 2017 through 2026 are given in Table 1 of the Executive 
Summary above. For preferred Option 2 given medium-leasing frequency, 
the annualized cost over the period is $8.0 million.
    The ten-year estimated costs of Option 2 are summarized in Table 12 
of

[[Page 30174]]

the final rule's Regulatory Evaluation (a set of nine tables).\22\ The 
costs are calculated for each of the three leasing frequency scenarios 
(low, medium, high), at zero-percent (not discounted), three-percent, 
and seven-percent discount rates (9 = 3 x 3). The total estimated ten-
year cost for the low-frequency scenario, not discounted, is $35.1 
million. The total estimated ten-year cost for the low-frequency 
scenario, at the three-percent discount rate is $31.9 million, and at a 
seven-percent discount rate is $28.6 million. Under the medium-
frequency scenario, not discounted, the ten-year cost is $68.8 million. 
Under the medium-frequency scenario, at the three-percent discount rate 
the ten-year cost is $62.5 million, and at a seven percent discount 
rate is $56.0 million. Under the high-frequency scenario, not 
discounted, it is $136.0 million, at the three percent discount rate it 
is $123.5 million, and at a seven percent discount rate is $110.6 
million. Table 12 of the final rule's Regulatory Evaluation provides a 
full breakdown by year for all components of the costs for the nine 
scenarios at low, medium, and high lease and subcontract agreement 
frequencies, and on not discounted, three-percent discounted, and 
seven-percent discounted bases.
---------------------------------------------------------------------------

    \22\ Ibid.
---------------------------------------------------------------------------

Estimated Benefits and Threshold Analysis Results
    The Regulatory Evaluation develops a threshold analysis. Fatal 
motorcoach crashes are valued at different amounts for each year from 
2017 through 2026 because the VSL, the key component of the cost of a 
fatal crash, increases at a rate of 1.18 percent annually.
    The average cost of a fatal motorcoach crash, which has an average 
of 2.09413 equivalent statistical lives lost,\23\ is estimated at 
$19,500,000 (in 2013 dollars), $19,266,000 of which is the monetized 
quality-adjusted life-year (QALY). The remaining $234,000 is comprised 
of medical costs, emergency services, property damages, lost 
productivity from roadway congestion, and environmental costs. It is 
assumed that the VSL--and thus the QALY component--increases at a rate 
of 1.18 percent annually. By 2017, the QALY component (in 2013 dollars) 
increases from $19,266,000 to $20,192,000 ($20,192,000 = $19,266,000 x 
(1.0118\4\)). Together with the remaining $234,000 in costs, the cost 
of a fatal crash in 2017 is estimated to be $20,426,000 in 2013 dollars 
($20,426,000 = $20,192,000 + $234,000). This cost increases analogously 
for the next nine years from 2018 through 2026. For example, in 2018, 
the cost is $20,664,000, which is $20,192,000 (the QALY costs in 2017) 
times 1.0118, then adding on the $234,000.
---------------------------------------------------------------------------

    \23\ For an explanation of how the average equivalent 
statistical lives lost and average cost of a fatal motorcoach crash 
were calculated, see Appendix A of the Regulatory Evaluation for 
this final rule in the docket.
---------------------------------------------------------------------------

    For each year, the cost of the rule that year is divided by the 
cost of a fatal crash in that year. For example, in 2017, for Option 2, 
not discounted and at low-leasing frequency, the cost is estimated at 
$12,175,000 (from Table 12 of the final rule's Regulatory Evaluation, 
for 2017, second column, last row of the first part of the table), and 
the cost of a crash is estimated at $20,426,000 (from the previous 
paragraph), so for 2017, a reduction of 0.597 fatal crashes (about 
sixty percent of a fatal crash, or alternately 1.25 fatalities) is 
necessary for the costs of the rule to be covered (0.597 crashes = 
$12,175,000 cost / $20,426,000 cost per fatal crash; 1.25 fatalities = 
2.09413 fatalities per fatal crash x 0.597 fatal crashes). For 2018, 
the cost is estimated at $2,335,000 (from Table 12 of the final rule's 
Regulatory Evaluation, for 2018, third column, last row of the first 
part of the table), and the cost of a crash at $20,664,000 (from the 
last paragraph), so for 2018, 0.1130 fatal crashes, equivalent to 0.24 
fatalities, must be prevented to offset the costs of the rule (0.1130 
crashes = $2,335,000 cost / $20,664,000 cost per fatal crash; 0.24 
fatalities = 2.09413 fatalities per fatal crash x 0.1130 fatal 
crashes). Remember, there is a large decrease after the first year 
because the one-time cost of negotiation is no longer in effect. This 
process is analogous for the remaining eight years of the projection. 
The ten individual annual fatal crash reductions (and corresponding 
number of fatalities prevented) that are necessary to achieve cost 
neutrality in each year are then summed up to arrive at the total crash 
reduction needed to achieve cost neutrality over the ten-year period 
spanning 2017 through 2026. In the case of Option 2 at medium-leasing 
frequency, this amounts to 3.24 crashes over ten years, which the 
Agency rounds up to 4 in the summary discussion following Table 2 
above. This process is independent of the discount rate as discounting 
adjusts costs and benefits by equal proportions, leaving the ratio of 
the two unchanged. Table 6 below summarizes these necessary crash 
reductions and corresponding number of statistical fatalities 
prevented, similarly to as in Table 2 above, with an added column 
showing the corresponding ten-year cost estimates under each scenario.

             Table 6--Threshold Analysis: Safety Benefits Necessary To Offset the Costs of the Rule
----------------------------------------------------------------------------------------------------------------
                                                           Ten-year costs    Prevented fatal       Prevented
                                                          (in millions of   crashes necessary      fatalities
              Option                  Lease frequency        2013$, not         for cost-        necessary for
                                                            discounted)         neutrality      cost-neutrality
----------------------------------------------------------------------------------------------------------------
2 (Agency-Selected Option).......  Low.................              $35.1               1.65               3.46
                                   Medium..............               68.8               3.24               6.78
                                   High................              136.0               6.41              13.42
3................................  Low.................               57.3               2.68               5.61
                                   Medium..............              112.0               5.25              10.99
                                   High................              221.6              10.38              21.74
----------------------------------------------------------------------------------------------------------------

    Please review the final rule's Regulatory Evaluation in docket 
FMCSA-2012-0103 for a thorough discussion of the assumptions the Agency 
made, the public comments the Agency considered, the options/
alternatives considered in developing this final rule, the analysis 
conducted, and the details for the estimates presented here.

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.

[[Page 30175]]

L. 104-121, 110 Stat. 857, March 29, 1996) and the Small Business Jobs 
Act of 2010 (Pub. L. 111-240, September 27, 2010), requires FMCSA to 
perform a detailed analysis of the potential impact of the final rule 
on small entities. Accordingly, DOT policy requires that agencies shall 
strive to lessen any adverse effects on these businesses and other 
entities. Each final regulatory flexibility analysis \24\ required 
under this section must contain the following:
---------------------------------------------------------------------------

    \24\ ``A Guide for Government Agencies: How to Comply with the 
Regulatory Flexibility Act, May 2012'' at https://www.sba.gov/sites/default/files/rfaguide_0512_0.pdf.
---------------------------------------------------------------------------

Final Regulatory Flexibility Analysis (FRFA)
    (1) A statement of the need for, and objectives of, the rule.
    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 final rule for most 
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. Similarly, the notification requirement for 
subcontracted passenger charter service would promote passenger 
awareness of the lessor/lessee relationship in the event that an 
original charter contract holder subcontracts some or all of a charter 
group's service to another carrier.
    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. For FMCSA's authority to take this action, see the 
section earlier in this final rule titled, ``III. Legal Basis for the 
Rulemaking.''
    (2) A statement of the significant issues raised by the public 
comments in response to the IRFA, a statement of the assessment of the 
agency of such issues, and a statement of any changes made in the 
proposed rule as a result of such comments.
    The public comments raised no significant issues in response to the 
IRFA.
    (3) The response of the agency to any comments filed by the Chief 
Counsel for Advocacy of the Small Business Administration in response 
to the proposed rule, and a detailed statement of any change made to 
the proposed rule in the final rule as a result of the comments.
    The Chief Counsel for Advocacy of the Small Business Administration 
filed no comments to the proposed rule. Thus, FMCSA has nothing to 
respond to from the Chief Counsel for Advocacy of the Small Business 
Administration.
    (4) A description of and an estimate of the number of small 
entities to which the rule will apply or an explanation of why no such 
estimate is available.
    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 of $15 million (See the U.S. Small Business Administration's 
``Table of Small Business Size Standards Matched to North American 
Industry Classification Codes'' for Subsector 485, Transit and Ground 
Transportation). 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 an 
analysis to estimate the average number of power units for a small 
entity earning $15 million annually, based on an assumption that 
passenger carriers generate annual revenues of $161,000 per power unit. 
This estimate compares reasonably to the estimated average annual 
revenue per power unit for the trucking industry ($186,000). A lower 
estimate was used because passenger-carrying CMVs generally do not 
accumulate as many vehicle miles traveled (VMT) per year as trucks,\25\ 
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 ($15,000,000 divided by $161,000/power-
unit = 93.2 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 about 97% of active passenger carriers have 93 power 
units or less.\26\ Therefore, the overwhelming majority of passenger 
carriers would be considered small entities to which this final rule 
would apply.
---------------------------------------------------------------------------

    \25\ FMCSA Commercial Motor Vehicle Facts--March 2013.
    \26\ MCMIS snapshot as of January 23, 2015.
---------------------------------------------------------------------------

    (5) A description of the reporting, recordkeeping and other 
compliance requirements of the final rule, including an estimate of the 
classes of small entities subject to the requirements and the type of 
professional skills necessary for preparation of the report or record.
    The exact regulatory burden of this final rule 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 final rule will 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 and other 
agencies. Furthermore, the practical requirements of the final rule 
(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 final rule, per 
carrier (per leased power unit), is not significant. As stated above, 
the estimated per unit cost of a lease agreement, in terms of the 
lessee and the lessor, is $7.48, which is the sum of 4 cost components: 
(1) Lease documentation ($6.54), (2) Lease copying ($0.30), (3) Receipt 
documentation ($0.60) and (4) Leased vehicle marking ($0.04). 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 to be re-used multiple times, a receipt were combined with a 
lease, and/or 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.

[[Page 30176]]

    The final rule also includes a notification requirement for 
passenger carriers with original charter contracts that lease vehicles 
from a subcontractor carrier to perform the charter. In such instances, 
the original charter contract holder must notify the charter party 
within 24 hours after hiring the subcontractor that the transportation 
will be provided by the subcontractor. The primary purpose of this 
notification provision is to further reduce the chance of confusion 
among passengers as to the carrier responsible for regulatory 
compliance (the lessee). While the marking requirement included in this 
rule aids in this purpose, passengers may overlook the smaller placard 
required by Sec.  390.21(f)(2) and assume that a different carrier is 
providing the transportation. The requirement included in this final 
rule helps ensure that the charter group's representative will be 
informed of the nature of the subcontract agreement, thereby promoting 
passenger awareness should passengers overlook the placard on the 
vehicle. Compliance with this requirement is projected to involve 
minimal time and cost on a per-subcontracted-charter basis, 
constituting 5 minutes of office staff time to send an email 
notification. Carriers which routinely utilize such subcontract 
agreements (that is, at the medium assumed frequency involving 64 
charter group notifications per year) are projected to incur a 5.33 
hour annual compliance burden (5.33 hours = 64 notifications per year x 
5 minutes per notification / 60 minutes per hour). Charter service is a 
relatively greater component of fleet VMT for the smallest carriers 
than that of the larger carriers.\27\ Therefore while the analysis 
presented in Table 10 of this final rule's Regulatory Evaluation 
assumes that half of passenger carriers subject to the final rule 
utilize subcontract agreements, it is estimated that approximately 75 
percent of small entities subject to this final rule will incur this 
5.33 hour burden (76.7 percent is the average percentage of motorcoach 
service mileage categorized as charter, tour, and sightseeing in Figure 
2.5 of the ABA's Motorcoach Census 2013 among fleet sizes 99 and fewer 
(the closest proxy to the group constituting carriers with 93 or fewer 
PUs), weighted by the vehicle mileage according to respective fleet 
size as shown in Table 2-4 of the same ABA publication).\28\ The Agency 
considers it a conservatively high estimate that 75 percent of small 
entities subject to this final rule will incur this 5.33 hour burden 
for the following reasons: (1) It is assumed that all charter, tour, 
and sightseeing VMT are incurred in the course of subcontracted service 
agreements; (2) it assumes one vehicle per subcontract agreement.
---------------------------------------------------------------------------

    \27\ Motorcoach Census 2013, ABA, https://www.buses.org/files/Foundation/Census2013.pdf (accessed February 13, 2015). ``Fixed-
route services' share of motorcoach service mileage increases with 
fleet-size category, accounting for only 10.4% of mileage for the 
smallest carriers to 79.5% for the largest carriers.''
    \28\ The full calculation of the 76.7 percent value is 
documented in this final rule's Regulatory Evaluation.
---------------------------------------------------------------------------

    (6) A description of the steps the agency has taken to minimize the 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of the 
factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each of the other significant 
alternatives to the rule considered by the agency which affect the 
impact on small entities was rejected.
    The Agency did not identify any significant alternatives to the 
rule that could lessen the burden on small entities without 
compromising the goals of the rule or the Agency's statutory safety 
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 is not feasible 
and not consistent with sound public policy.
Assistance for Small Entities
    In accordance with section 213(a) of the Small Business Regulatory 
Enforcement Fairness Act of 1996, FMCSA wants to assist small entities 
in understanding this rule so that they can better evaluate its effects 
on themselves. If the rule would affect your small business, 
organization, or governmental jurisdiction and you have questions 
concerning its provisions or options for compliance, please consult the 
FMCSA point of contact, Loretta Bitner, listed in the FOR FURTHER 
INFORMATION CONTACT section of this rule.
    Small businesses may send comments on the actions of Federal 
employees who enforce or otherwise determine compliance with Federal 
regulations to the SBA's Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-
734-3247). DOT has a policy ensuring the rights of small entities to 
regulatory enforcement fairness and an explicit policy against 
retaliation for exercising these rights.

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 determined that it has no 
federalism implications.

D. Unfunded Mandates Reform Act of 1995

    This final rule does not impose an unfunded Federal mandate, as 
defined by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532 et 
seq.), that would result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $151.1 
million (which is the value of $100 million in 2012 after adjusting for 
inflation) or more in any 1 year.

E. Executive Order 12988 (Civil Justice Reform)

    This final 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 determined that this rule does not create an environmental 
risk to health or safety that would disproportionately affect children.

G. Executive Order 12630 (Taking of Private Property)

    FMCSA reviewed this final rule in accordance with Executive Order 
12630, Governmental Actions and Interference with Constitutionally 
Protected Property Rights, and has 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 final rule does not require the 
collection of any personally identifiable information.

[[Page 30177]]

    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 determined this final rule does 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 final rule amends two OMB approved information 
collections titled ``Commercial Motor Vehicle Marking Requirements,'' 
OMB No. 2126-0054, and ``Lease and Interchange of Motor Vehicles,'' OMB 
No. 2126-0056. The annual burdens for these information collections are 
estimated to be about 14,000 hours (rounded up to the next higher 
thousand from the 13,543 hour value shown in the CMV Marking PRA 
supporting statement) and 602,500 hours (rounded up to the nearest 
hundred from the 602,435 hour value shown in the Lease and Interchange 
of Vehicles 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 is two, 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. Assuming lease frequency is medium, the Agency assumes that 
the average passenger carrier (6.6 power units) will engage in 64 lease 
agreements per year. This estimate consists of 8 leases per peak month 
(May through August) and 4 leases per off-peak month (September through 
April). The total annual number of leases estimated in 2017 is 
492,578--that is, 64 lease agreements for each the 7,518 carriers 
estimated to be affected by this rule in 2017 (492,578 = 64 x 7,518 
plus 11,426 leases for Greyhound). The Agency assumes 5 minutes of 
documentation time per lease agreement. This amounts to 5 and \1/3\ 
hours per carrier per year (5\1/3\ = 64 x 5 / 60) and amounts to an 
industry total of about 41,048 hours (41,048.2 = 492,578 x (5 / 60). 
This total is multiplied by two, since the cost burden applies to both 
the lessees and the lessors. Thus, the total is 82,096 hours (82,096 = 
41,048.2 x 2). Table 2 of the final rule's supporting statement for OMB 
Control Number 2126-0056, ``Lease and Interchange of Vehicles'' 
presents these calculations.
    Regarding documentation 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 rule. The 
receipts are sometimes replicas or portion of ``master leases,'' which 
make for easy and quick documentation.
Notification
    Under the final rule, when a passenger carrier with a charter 
contract leases vehicles from a subcontractor carrier to perform the 
charter, it must notify the charter party within 24 hours after hiring 
the subcontractor that the transportation will be provided by the 
subcontractor.
    The estimated annual number of passenger carriers that lease 
vehicles from a subcontractor to perform a charter is estimated to be 
3,759 in 2017, the first year of the rule. 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 242,996 (3,759 carriers 
x 64 notifications per carrier + 2,420 notifications specific to 
Greyhound). Given the 5 minutes needed to complete the notification, 
this amounts to 5.33 hours per carrier per year (excluding Greyhound 
from this average as it is an outlier) for the 3,759 carriers and an 
industry total of 20,250 hours (20,250 = 242,996 notifications x 5 
minutes per notification / 60 minutes per hour).

OMB No. 2126-0056, New IC-2 Summary
    Annual Burden Hours (in 2017): 602,500 [602,435 = 7,518 (master 
lease) + 492,572 (negotiation) + 82,095 (documentation) + 20,250 
(charter group notification)]
    Annual Number of Respondents (in 2017): 2,887,000 [2,886,912 = 
7,518 carriers x up to 6 people per lease x 64 leases annually per 
carrier]
    Annual Number of Responses (in 2017): 2,706,000 [2,705,796 = 
492,572 (leases) + 985,144 (transcription of lease agreements) + 
985,144 (transcription of receipts) + 242,996 (charter group 
notification)]
OMB No. 2126-0056, Total for Both IC-1 and New IC-2
    Estimated Average Total Annual Burden Hours (in 2017): 677,000 [= 
74,500 + 602,500]
    Estimated Annual Number of Respondents (in 2017): 2,923,000 [= 
36,000 + 2,887,000]
    Estimated Annual Number of Responses (in 2017): 3,384,000 [= 
678,000 + 2,706,000]
Passenger-Carrying CMV Marking Information Collection Analysis
    The final rule requires every leased passenger vehicle to be 
properly marked 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.

OMB No. 2126-0054, New IC-2 Summary
    Annual Burden Hours (in 2017): 14,000
    Annual Number of Respondents (in 2017): 5,000
    Annual Number of Responses (in 2017): 36,000
OMB No. 2126-0054, Total for Both IC-1, New IC-2, and IC-3
    Estimated Average Total Annual Burden Hours: 851,000
    Estimated Annual Number of Respondents: 287,000
    Estimated Annual Number of Responses: 1,928,000

    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

[[Page 30178]]

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 final rule to OMB. The OMB must receive your 
comments by June 26, 2015. 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 final rule in accordance with the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.). The 
Agency has 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 final action will 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 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 Final Rule

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

PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL

0
1. The authority citation for part 390 continues to read as follows:

    Authority: 49 U.S.C. 504, 508, 31132, 31133, 31136, 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. 
4136, Pub. L. 109-59, 119 Stat. 1144, 1745; sections 32101(d) and 
32934, Pub. L. 112-141, 126 Stat. 405, 778, 830; sec. 2, Pub. L. 
113-125, 128 Stat. 1388; 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, as used in Sec.  390.21(f) and subpart F of this part, 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, as used in subpart F this part, means the motor carrier 
obtaining the use of a passenger-carrying commercial motor vehicle, 
with or without the driver, from another motor carrier. The term lessee 
includes a motor carrier obtaining the use of a passenger-carrying 
commercial motor vehicle from another motor carrier under an 
interchange or other agreement, with or without a driver, whether or 
not compensation for such use is specified. For a definition of lessee 
in the context of property-carrying vehicles, see Sec.  376.2 of this 
subchapter.
    Lessor, as used in subpart F of this part, means the motor carrier 
granting the use of a passenger-carrying commercial motor vehicle, with 
or without a driver, to another motor carrier. The term lessor includes 
a motor carrier granting the use of a passenger-carrying commercial 
motor vehicle to another motor carrier under an interchange or other 
agreement, with or without a driver, whether or not compensation for 
such use is specified. For a definition of lessor in the context of 
property-carrying vehicles, see Sec.  376.2 of this subchapter.
* * * * *

0
3. Amend Sec.  390.21 by revising paragraph (e) introductory text; 
redesignating paragraphs (f) and (g) as paragraphs (g) and (h); and 
adding new 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

[[Page 30179]]

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 placard, sign or 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 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 Notification.

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


Sec.  390.301  Applicability.

    (a) General. Except as provided in paragraphs (b)(1) through (3) of 
this section, this subpart applies to the following actions, 
irrespective of duration, or the presence or absence of compensation, 
by motor carriers operating commercial motor vehicles to transport 
passengers:
    (1) The lease of passenger-carrying commercial motor vehicles; and
    (2) The interchange or loan of passenger-carrying commercial motor 
vehicles or drivers between motor carriers.
    (b) Exceptions--(1) Financial leases. This subpart does not apply 
to a contract (however designated, e.g., lease, closed-end lease, hire 
purchase, lease purchase, purchase agreement, installment plan, etc.) 
between a motor carrier and a financial organization or a manufacturer 
or dealer of passenger-carrying commercial motor vehicles (provided the 
financial organization, manufacturer or dealer is not itself a motor 
carrier) allowing the motor carrier to use the passenger-carrying 
commercial motor vehicle.
    (2) Common Ownership and Control. (i) Passenger-carrying commercial 
motor vehicles may be exchanged or interchanged without leases or 
receipts between or among commonly owned and controlled motor carriers, 
provided the driver of each such carrier carries, and upon demand of a 
Federal, State, or local law enforcement official produces, a summary 
document listing:
    (A) All motor carriers subject to common ownership and control, 
including their USDOT numbers, business addresses, and telephone 
numbers;
    (B) The name and telephone numbers of the motor carrier operating 
the vehicle for the current trip;
    (C) The vehicle used for the trip, identified by the last 6 digits 
of the Vehicle Identification Number (VIN);
    (D) The trip, identified by the carrier's charter number, run 
number, or other means specifically to identify the trip; and
    (E) The date of the trip.
    (ii) Each commercial motor vehicle exchanged or interchanged 
pursuant to this paragraph (b)(2) must be marked as required in Sec.  
390.21(f) to show the name of the responsible motor carrier operating 
the vehicle.
    (3) Revenue pooling. (i) Passenger-carrying commercial motor 
vehicles may be exchanged or interchanged without leases or receipts 
between or among motor carriers that are party to a revenue pooling 
agreement approved by the Surface Transportation Board (STB) in 
accordance with 49 U.S.C. 14302, provided the driver of each vehicle 
operating under the agreement carries, and upon demand of a Federal, 
State, or local law enforcement official displays:
    (A) The number and date of the STB decision approving the revenue 
pooling agreement and the names of the parties to the agreement; and
    (B) A summary document showing:
    (1) All routes covered by the pooling agreement;
    (2) The carrier or carriers authorized to operate on each route or 
portion of a route and the telephone numbers of each carrier; and
    (3) All points of origin, destination, or interchange (if 
interchanges are part of the agreement).
    (ii) Each commercial motor vehicle exchanged or interchanged 
pursuant to this paragraph (b)(3) must be marked as required in Sec.  
390.21(f) to show the name of the responsible motor carrier operating 
the vehicle.
    (c) Penalties. If the use of a passenger-carrying commercial motor 
vehicle is conferred on one motor carrier subject to this subpart by 
another such motor carrier without a lease, interchange agreement, or 
other agreement, or pursuant to a lease, interchange agreement, or 
other agreement that fails to meet all applicable requirements of 
subpart F, both motor carriers shall be subject to a civil penalty.


Sec.  390.303  Written lease and interchange requirements.

    Except as provided in Sec.  390.301(b) and paragraph (a)(2) of this 
section, a motor carrier may transport passengers in a leased or 
interchanged commercial motor vehicle only under the following 
conditions:
    (a) In general--(1) Written lease or agreement required. There 
shall be in effect either:
    (i) A written lease granting the use of the passenger-carrying 
commercial motor vehicle and meeting the conditions of paragraphs (b) 
through (f) of this section. The provisions of the lease shall be 
adhered to and performed by the lessee;
    (ii) A written agreement meeting the conditions of paragraphs (b) 
through (f) 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 lessee; or
    (iii) A written agreement meeting the conditions of paragraphs (b) 
through (f) of this section and governing the renting, borrowing, or 
loaning, or similar transfer of a passenger-carrying commercial motor 
vehicle from another party. The provisions of the agreement shall be 
adhered to and performed by the motor carrier lessee.
    (2) Exception. When an event occurs while passengers are on a 
passenger-carrying commercial motor vehicle (e.g., a crash, the vehicle 
is disabled, the driver is ill) that requires a motor carrier 
immediately to obtain a replacement vehicle from another motor carrier, 
the two carriers may postpone the writing of the lease or written 
agreement for the replacement vehicle for up to 48 hours after the time 
the lessee takes exclusive possession and control of the replacement 
vehicle. The driver of the vehicle must carry for the duration of the 
lease, and upon demand of an enforcement official produce, a document 
signed and dated by the lessee's driver or available company official 
stating: ``[Carrier A, USDOT number, telephone number] has leased this 
vehicle to [Carrier B, USDOT number, telephone number] pursuant to 49 
CFR 390.303(a)(2).'' The lessee must also mark the vehicle in 
accordance with Sec.  390.21(f) before operating it.
    (b) The written lease, interchange agreement, or other agreement 
required by paragraph (a)(1) of this section shall contain:

[[Page 30180]]

    (1) Vehicle identification information. The name of the vehicle 
manufacturer, the year of manufacture, and at least the last 6 digits 
of the Vehicle Identification Number (VIN) of each passenger-carrying 
commercial motor vehicle transferred between motor carriers pursuant to 
the lease, interchange agreement, or other agreement.
    (2) Parties. The legal name and telephone number of the motor 
carrier providing passenger transportation in a commercial motor 
vehicle (lessee) and the legal name and telephone number of the motor 
carrier providing the equipment (lessor), and signatures of both 
parties or their authorized representatives.
    (3) Specific duration. The time and date when, and the location 
where, the lease, interchange agreement, or other agreement begins and 
ends. These times and locations shall coincide with the times for the 
providing of receipts required by paragraph (e) of this section, unless 
the parties wish to end the lease, interchange agreement, or other 
agreement prematurely; in that case, the receipt required by paragraph 
(e) 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, time of day, and location for 
termination specified by the lease, interchange agreement, or other 
agreement.
    (4) Exclusive possession and responsibilities. (i) A clear 
statement that the motor carrier obtaining the passenger-carrying 
commercial motor vehicle (the lessee) has exclusive possession, 
control, and use of the passenger-carrying commercial motor vehicle for 
the duration of the lease, interchange agreement, or other agreement. 
Such lease or written 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 
agreement, or other agreement.
    (ii) Provision may be made in the lease, interchange agreement, 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 such lease or agreement. In the event 
of a sublease, all of the requirements of this section shall apply to 
the parties to the sublease.
    (iii) 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.
    (5) Insurance. A clear specification of the legal obligation of the 
lessee to maintain insurance coverage for the vehicle being operated 
for the protection of the public pursuant to 49 CFR part 387. The 
lease, interchange agreement, 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.
    (c) Copies of the lease. A signed original and two copies of each 
lease, interchange agreement, or other agreement shall be produced. The 
lessee shall keep the original and, except as otherwise permitted by 
paragraph (f)(2) of this section, shall place a copy of the lease, 
interchange agreement, or other agreement on the passenger-carrying 
commercial motor vehicle during the period of the lease, interchange 
agreement, or other agreement. The lessor shall keep the other copy of 
the lease.
    (d) Record retention. Copies of each lease (including the 
alternative statement required by Sec.  390.303(a)(2)), interchange 
agreement, or other agreement, and the receipts required by paragraph 
(e) of this section, shall be retained by the lessor and lessee for one 
year after the expiration date of the lease, interchange agreement, or 
other agreement. The summary documents required by Sec.  390.301(b)(2) 
and (3) shall be retained by the motor carrier performing the trip 
identified in each such document for one year after the final date of 
such trip.
    (e) Receipts for passenger-carrying commercial motor vehicle. 
Except as otherwise provided in Sec.  390.301(b)(2) and (3), 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.
    (f) 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 agreement, 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 otherwise indicated in paragraph (a)(2) of this 
section and in this paragraph, a copy of the lease, interchange 
agreement, or other agreement shall be carried on the passenger-
carrying commercial motor vehicle.
    (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 an interchange agreement, a written 
statement meets the requirements of this paragraph if it identifies the 
parties to the agreement by company name and USDOT number, states the 
use to be made of the passenger-carrying commercial motor vehicle and 
the duration of the agreement, is signed by the parties' authorized 
representatives, and is carried on the passenger-carrying commercial 
motor vehicle.


Sec.  390.305  Notification.

    Within 24 hours after a motor carrier of passengers originally 
hired to provide charter transportation of passengers subcontracts, 
i.e., leases, the services of another motor carrier of passengers to 
provide that transportation, the motor carrier originally chartered by 
the tour operator or passenger group must notify the operator or group, 
or their representative(s), about the role of the subcontractor and 
provide the legal name, USDOT number, and telephone number of the 
subcontracted, i.e., leased, motor carrier of passengers.

    Issued under the authority delegated in 49 CFR 1.87 on: May 7, 
2015.
T.F. Scott Darling, III,
Chief Counsel.
[FR Doc. 2015-12644 Filed 5-26-15; 8:45 am]
BILLING CODE 4910-EX-P