Exemption From Operating Authority Regulations for Providers of Recreational Activities, 13984-13998 [2024-03782]
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13984
Federal Register / Vol. 89, No. 38 / Monday, February 26, 2024 / Rules and Regulations
ambiguity and be written to minimize
litigation; and
(b) Meets the criteria of section 3(b)(2)
requiring that all regulations be written
in clear language and contain clear legal
standards.
I. Consultation With Indian Tribes (E.O.
13175 and Departmental Policy)
The Department of the Interior strives
to strengthen its government-togovernment relationship with Indian
Tribes through a commitment to
consultation with Indian Tribes and
recognition of their right to selfgovernance and tribal sovereignty. We
have evaluated this rule under the
Department’s consultation policy and
under the criteria in E.O. 13175 and
have determined that it has no
substantial direct effects on federally
recognized Indian Tribes and that
consultation under the Department’s
Tribal consultation policy is not
required.
J. Paperwork Reduction Act
This rule does not contain
information collection requirements,
and a submission to OMB under the
Paperwork Reduction Act (44 U.S.C.
3501 et seq.) is not required. We may
not conduct or sponsor, and you are not
required to respond to, a collection of
information unless it displays a
currently valid OMB control number.
K. National Environmental Policy Act
(NEPA)
L. Effects on the Energy Supply (E.O.
13211)
This rule is not a significant energy
action under the definition in E.O.
13211. Therefore, a Statement of Energy
Effects is not required.
List of Subjects
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Steven H. Feldgus,
Principal Deputy Assistant Secretary, Land
and Minerals Management.
[FR Doc. 2024–03842 Filed 2–23–24; 8:45 am]
BILLING CODE 4331–29–P
43 CFR Part 3160
Administrative practice and
procedure; Government contracts;
Indians—lands; Mineral royalties; Oil
and gas exploration; Penalties; Public
lands—mineral resources; Reporting
and recordkeeping requirements.
DEPARTMENT OF TRANSPORTATION
43 CFR Part 9230
[Docket No. FMCSA–2023–0007]
Penalties, Public lands.
Federal Motor Carrier Safety
Administration
49 CFR Part 372
RIN 2126–AC57
For the reasons given in the preamble,
the BLM amends Chapter II of Title 43
of the Code of Federal Regulations as
follows:
Exemption From Operating Authority
Regulations for Providers of
Recreational Activities
PART 3160—ONSHORE OIL AND GAS
OPERATIONS
Federal Motor Carrier Safety
Administration (FMCSA), Department
of Transportation (DOT).
ACTION: Final rule.
1. The authority citation for part 3160
continues to read as follows:
SUMMARY:
■
Authority: 25 U.S.C. 396d and 2107; 30
U.S.C. 189, 306, 359, and 1751; 43 U.S.C.
1732(b), 1733, 1740; and Sec. 107, Pub. L.
114–74, 129 Stat. 599, unless otherwise
noted.
Subpart 3163—Noncompliance,
Assessments, and Penalties
§ 3163.2
This rule does not constitute a major
federal action because of the nondiscretionary nature of the civil penalty
adjustment as required by law (see 40
CFR 1508.1(q)(1)(ii)). The Department of
Labor’s Consumer Price Index sets the
amount of the annual civil penalty
adjustment to account for inflation as
required by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015. Accordingly, BLM has no
discretion in the execution of the civil
penalty adjustments. Even if this were a
discretionary action, which it is not, a
detailed statement under NEPA would
also not be required because, as a
regulation of an administrative nature,
this rule would otherwise be covered by
a categorical exclusion. See 43 CFR
46.210(i). BLM has determined that the
rule does not implicate any of the
extraordinary circumstances listed in 43
CFR 46.215 that would prevent reliance
on the categorical exclusion. Because
this rule is not a major federal action, it
is therefore not subject to the
requirements of NEPA.
This action by the Principal Deputy
Assistant Secretary is taken pursuant to
an existing delegation of authority.
[Amended]
2. In § 3163.2:
■ a. In paragraphs (b)(1) and (d), remove
‘‘$1,291’’ and add in its place ‘‘$1,333’’.
■ b. In paragraph (b)(2), remove
‘‘$12,924’’ and add in its place
‘‘$13,343’’.
■ c. In paragraph (e) introductory text,
remove ‘‘$25,847’’ and add in its place
‘‘$26,685’’.
■ d. In paragraph (f) introductory text,
remove ‘‘$64,618’’ and add in its place
‘‘$66,712’’.
■
PART 9230—TRESPASS
3.The authority citation for part 9230
continues to read as follows:
■
Authority: R.S. 2478; 43 U.S.C. 1201.
Subpart 9239—Kinds of Trespass
§ 9239.5–3
[Amended]
4. In § 9239.5–3(f)(1), remove
‘‘$4,838’’ and add in its place ‘‘$4,995’’.
■
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AGENCY:
FMCSA amends its
regulations to implement the statutory
exemption from its operating authority
registration requirements for providers
of recreational activities. The exemption
applies to motor carriers operating a
motor vehicle designed or used to
transport between 9 and 15 passengers
(including the driver), whether operated
alone or with a trailer attached to the
transport vehicle, if the motor vehicle is
operated by a person that provides
recreational activities within a 150 airmile radius of the location at which
passengers initially boarded the motor
vehicle at the beginning of the trip.
FMCSA also defines recreational
activities to clarify the exemption,
adopting, in response to a comment, a
definition modified from that proposed
in the notice of proposed rulemaking
(NPRM).
This final rule is effective April
26, 2024.
Petitions for Reconsideration of this
final rule must be submitted to the
FMCSA Administrator no later than
March 27, 2024.
FOR FURTHER INFORMATION CONTACT: Mr.
Antonio Harris, Registration, Licensing
and Insurance Division, Office of
Research and Registration, FMCSA,
1200 New Jersey Avenue SE,
Washington, DC 20590–0001; (202) 366–
2964; antonio.harris@dot.gov. If you
have questions on viewing or submitting
material to the docket, call Dockets
Operations at (202) 366–9826.
DATES:
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FMCSA
organizes this final rule as follows:
SUPPLEMENTARY INFORMATION:
I. Availability of Rulemaking Documents
II. Executive Summary
A. Purpose and Summary of the Regulatory
Action
B. Costs and Benefits
III. Abbreviations
IV. Legal Basis
V. Discussion of Proposed Rulemaking and
Comments
A. Proposed Rulemaking
B. Comments and Responses
VI. Changes From the NPRM
VII. Severability
VIII. Section-by-Section Analysis
IX. Regulatory Analyses
A. E.O. 12866 (Regulatory Planning and
Review), E.O. 13563 (Improving
Regulation and Regulatory Review), E.O.
14094 (Modernizing Regulatory Review),
and DOT Regulatory Policies and
Procedures
B. Congressional Review Act
C. Regulatory Flexibility Act
D. Assistance for Small Entities
E. Unfunded Mandates Reform Act of 1995
F. Paperwork Reduction Act
G. E.O. 13132 (Federalism)
H. Privacy
I. E.O. 13175 (Indian Tribal Governments)
J. National Environmental Policy Act of
1969
I. Availability of Rulemaking
Documents
To view any documents mentioned as
being available in the docket, go to
https://www.regulations.gov/docket/
FMCSA-2023-0007/document and
choose the document to review. To view
comments, click this final rule, then
click ‘‘Browse Comments.’’ If you do not
have access to the internet, you may
view the docket online by visiting
Dockets Operations at U.S. Department
of Transportation, 1200 New Jersey
Avenue SE, Washington, DC 20590–
0001, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal
holidays. To be sure someone is there to
help you, please call (202) 366–9317 or
(202) 366–9826 before visiting Dockets
Operations.
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II. Executive Summary
A. Purpose and Summary of the
Regulatory Action
Section 23012 of the Infrastructure
Investment and Jobs Act (IIJA) (Pub. L.
117–58, 135 Stat. 429 (H.R. 3684, Nov.
15, 2021)) amended 49 United States
Code (U.S.C.) 13506 by adding, in
paragraph (b)(4), a new exemption from
FMCSA’s operating authority
registration requirements. FMCSA adds
new regulatory text implementing this
statutory exemption. The exemption
from operating authority registration
applies to motor carriers operating a
motor vehicle designed or used to
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transport between 9 and 15 passengers
(including the driver), whether operated
alone or with a trailer attached to the
transport vehicle, if the motor vehicle is
operated by a person 1 that provides
recreational activities and the
transportation is provided within a 150
air-mile radius of the location at which
passengers initially boarded the motor
vehicle at the outset of the trip.
FMCSA also defines recreational
activities to clarify the exemption. The
statute, which requires that the motor
vehicle be operated ‘‘by a person that
provides recreational activities,’’ does
not define recreational activities. The
Agency’s definition clarifies the types of
recreational activities FMCSA has
determined would qualify for the
exemption in 49 U.S.C. 13506(b)(4).
FMCSA adopts a definition of
recreational activities consistent with
the activities that Congress outlined in
another section of the IIJA that uses this
term. Section 11512 of the IIJA provided
examples of ‘‘groups representing
recreational activities and interests’’ in
subsection (c)(4) which provided some
insight as to legislative intent for the
term recreational activities in section
23012. The definition FMCSA adopts in
implementing section 23012 includes
activities Congress mentions in section
11512 and also describes activities that
fall outside the intended scope of the
term. This language is intended to
illustrate which activities are within the
exemption, based on the intent of
Congress, and to allow sufficient
flexibility for analysis of the term’s
applicability to activities not specified
in the regulation.
B. Costs and Benefits
The cost savings associated with this
rulemaking include changes in
paperwork, fees, and insurance costs
associated with maintaining for-hire
operating authority. Because there is no
pre-existing definition of recreational
activities, motor carriers previously may
have been interpreting their eligibility
for the operating authority exemption in
varying ways. Through this rulemaking,
there will be increased costs for motor
carriers that inappropriately interpreted
their eligibility for the exemption, and
decreased costs for those carriers that
now have clear regulatory language to
support use of the exemption. The
differing interpretations by regulated
entities and enforcement officials may
have hindered consistent enforcement
practices, thereby impacting business1 While the statute refers to a ‘‘person,’’ that term
can refer both to an individual or to a motor carrier
under the definitions of that term in 49 U.S.C.
13102(18) and 1 U.S.C. 1.
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related decisions in providing
transportation for recreational activities.
The clarification in this rule may
resolve possible information asymmetry
and enforcement differences by creating
a common understanding between
FMCSA and motor carriers. Because this
rule may also lead to an increase in
exemption use, it will benefit carriers by
improving the efficiency of their
business operations and increase both
consumer and producer surplus.
III. Abbreviations
AOA America Outdoors Association
AWM AWM Associates, LLC
BEA Bureau of Economic Analysis
BLS Bureau of Labor Statistics
CE Categorical Exclusion
CFR Code of Federal Regulations
DOL U.S. Department of Labor
DOT Department of Transportation
E.O. Executive Order
FMCSA Federal Motor Carrier Safety
Administration
FMCSRs Federal Motor Carrier Safety
Regulations
FR Federal Register
FRFA Final Regulatory Flexibility Analysis
GDP Gross Domestic Product
ICR Information Collection Request
IRFA Initial Regulatory Flexibility Analysis
IIJA Infrastructure Investment and Jobs Act
MCMIS Motor Carrier Management
Information System
NAICS North American Industry
Classification System
NAMIC National Association of Mutual
Insurance Companies
NPRM Notice of Proposed Rulemaking
OEWS Occupational Employment and
Wage Statistics
OMB Office of Management and Budget
PIA Privacy Impact Assessment
PTA Privacy Threshold Assessment
RIA Regulatory Impact Analysis
Secretary The Secretary of the Department
of Transportation
SBA Small Business Administration
UMRA Unfunded Mandates Reform Act of
1995
URS Unified Registration System
U.S.C. United States Code
USDOT United States Department of
Transportation
Vehicle Associations Motorcycle Industry
Council, Specialty Vehicle Institute of
America, and Recreational Off-Highway
Vehicle Association
IV. Legal Basis
Section 23012 of the IIJA amended 49
U.S.C. 13506 by adding a new
exemption from the requirement to
obtain operating authority registration
for ‘‘providers of recreational activities’’
operating passenger vehicles designed
or used to transport between 9 and 15
passengers (including the driver) (see 49
U.S.C. 13506(b)(4)). The statute, which
requires that the motor vehicle be
operated ‘‘by a person that provides
recreational activities,’’ does not define
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recreational activities. This final rule
defines recreational activities to clarify
the exemption’s applicability.
Under Title 49, Code of Federal
Regulations (CFR) 1.87(a)(5), the
authority of the Secretary of the
Department of Transportation (the
Secretary) to carry out the functions
relating to the registration requirements
in 49 U.S.C. 13901 and 13902 is
delegated to the FMCSA Administrator.
Sections 13901 and 13902 generally
require that any person wishing to
provide transportation subject to
jurisdiction under subchapter I of
chapter 135 2 must be registered as a
motor carrier, defined in 49 U.S.C.
13102(14) as ‘‘a person providing motor
vehicle transportation for
compensation.’’ The requirements of
these sections, which are enforced
under § 392.9a (‘‘Operating authority’’),
are the basis for the rules governing
applications for operating authority
registration in 49 CFR part 365.
Under 49 CFR 1.87(a)(3), the authority
of the Secretary to carry out the
functions related to the jurisdiction
requirements in 49 U.S.C. 13506 is
delegated to the FMCSA Administrator.
Section 13506 provides miscellaneous
motor carrier transportation exemptions,
including the exemption from operating
authority for providers of recreational
activities added by the IIJA. The
statutory exemption provided in section
13506 provides the basis for the
regulatory exemption added under this
rule in 49 CFR 372.113, including the
definition of recreational activities
added to 49 CFR 372.107.
V. Discussion of Proposed Rulemaking
and Comments
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A. Proposed Rulemaking
On June 21, 2023, FMCSA published
in the Federal Register (Docket No.
FMCSA–2023–0007, 88 FR 40146) an
NPRM titled ‘‘Exemption from
Operating Authority Regulations for
Providers of Recreational Activities.’’
The NPRM proposed a new § 372.113
that outlines the exemption from
operating authority registration for
providers of recreational activities in 49
U.S.C. 13506(b)(4). This new section
would reflect the statutory language and
incorporate the exemption into the
FMCSRs. The NPRM also proposed
adding a definition of recreational
activities to § 372.107 which would
2 Absent an exemption, the Secretary has
jurisdiction over transportation by motor carrier
and the procurement of that transportation, to the
extent that passengers, property, or both, are
transported by motor carrier in interstate commerce
(49 U.S.C. 13501). This authority has been
delegated to the FMCSA Administrator under 49
CFR 1.87(a)(3).
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provide a clear description of the types
of activities that qualify for the
exemption in 49 U.S.C. 13506(b)(4). The
proposed definition set out the meaning
of recreational activities, provided a
non-exhaustive list of included
activities, and identified two types of
excluded activities. The NPRM asked
for comments addressing whether the
last part of the definition, excluding
certain types of activities, should be
retained or removed.
B. Comments and Responses
FMCSA solicited comments
concerning the NPRM for 60 days
ending August 21, 2023, and by that
date four comments were received.
AWM Associates, LLC (AWM), the
National Association of Mutual
Insurance Companies (NAMIC), and a
private citizen each submitted a
comment, and a joint comment was
submitted by the Motorcycle Industry
Council, Specialty Vehicle Institute of
America, and Recreational Off-Highway
Vehicle Association (the ‘‘Vehicle
Associations’’).
FMCSA did not receive any
comments regarding the portion of the
recreational activities definition that
excludes certain types of activities. The
exclusions are provided to clarify that
certain activities are exempt activities
where the service provided by the motor
carriers mainly focuses on
transportation from one location to
another. In such cases, the motor
carrier’s business is in fact selling
transportation—not providing
recreational activities. FMCSA has
received inquiries illustrative of these
types of activities. For example, a bus
company offering scheduled route
service with multiple stops would not
fall within the exemption merely
because one of the scheduled stops was
at or near a water park or a horseback
riding stable. Likewise, motor carriers
that advertise and provide alcohol,
music, or other ‘‘party’’ activities on
board the vehicle as the principal
activity or purpose of the transportation
would not be eligible for the exemption.
In these situations, the activity cannot
be completed and has no purpose
without the transportation. The
transportation in such circumstances is
integral to the activities, rather than
incidental. Accordingly, the definition
in § 372.107 explicitly excludes any
activity: (1) for which the activity
offered or sold is occurring
simultaneously with the transportation;
or (2) for which the transportation is the
primary service offered for sale.
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AWM
Comment: AWM objected to the
creation of an exemption from the
operating authority registration rules for
providers of recreational activities and
questioned whether the cost of
compliance for providers of recreational
activities under the current regulations
is burdensome. Going beyond the
exemption at issue, AWM stated that the
FMCSRs are unclear regarding which
motor carriers are required to apply for
operating authority under part 365.
AWM also questioned whether the
providers of recreational activities
would be required to obtain operating
authority under part 365.
Response: The exemption being
added to § 372.113 simply reflects the
statutory language in 49 U.S.C.
13506(b)(4) that is currently in effect
and incorporates the statutory
exemption from operating authority
registration into the FMCSRs for
convenient reference. FMCSA is not
determining through this rulemaking
whether there should be an exemption
from the operating authority registration
rules for providers of recreational
activities; that decision was made by
Congress when it passed the IIJA which
created a statutory exemption. FMCSA’s
role in this rulemaking is to define the
term recreational activities and consider
the regulatory and economic impacts of
clarifying the definition. The Agency
considers the objection to the creation of
the exemption outside the scope of the
rule and declines to make any changes
to the rule based on it.
AWM’s comment questions whether
the cost of obtaining and maintaining
operating authority is burdensome, and
it critiques portions of the comment
from the America Outdoors Association
(AOA) relating to this issue. The AOA
comment, which relates to operating
authority for recreational activity
providers, predates both the IIJA and
this rule, and AOA submitted it in
response to a DOT notice requesting that
the public identify and provide input on
the Department’s existing guidance
documents that are good candidates for
repeal, replacement, or modification.3
The Agency added AOA’s comment to
the docket for this rulemaking and cited
it in the NPRM in support of its
proposed definition of the term
recreational activities. However, the
Agency did not rely on AOA’s comment
in the regulatory impact analysis (RIA).
The Agency’s analysis accounts for the
impact of the statutory exemption,
which was enacted after AOA’s
3 AOA’s comment was submitted in response to
DOT’s Notice of Review of Guidance, 84 FR 1820,
Feb. 5, 2019.
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comment was submitted to FMCSA. The
Agency’s RIA considers the impact of
codifying and clarifying the statutory
exemption currently in effect, whereas
AWM’s comment is directed towards
AOA’s comments on cost and the
impact of establishing the exemption as
an initial matter. Therefore, the Agency
considers this portion of AWM’s
comment outside the scope of the rule
and declines to make any changes to the
rule based on it.
Regarding the applicability of
operating authority requirements in part
365, 49 U.S.C. 13901 and 13902
generally require that any person that
wishes to provide transportation subject
to jurisdiction under subchapter I of
chapter 135 be registered as a motor
carrier, defined in 49 U.S.C. 13102(14)
as ‘‘a person providing motor vehicle
transportation for compensation.’’ The
requirements of these sections, which
are enforced under § 392.9a (‘‘Operating
authority’’), are the basis for the rules
governing applications for operating
authority registration in 49 CFR part
365. Part 365 states that the rules
governing applications for operating
authority apply to motor carriers of
property or passengers.4 Congress
established the operating authority
registration exemption for providers of
recreational activities carrying 9 to 15
passengers when it passed the IIJA. This
rulemaking seeks only to clarify the
statutory exemption by defining the
term recreational activities. This
rulemaking does not make any changes
to the operating authority provisions in
49 CFR part 365. The Agency considers
this portion of AWM’s comment outside
the scope of the rule and declines to
change the rule based on it.
The Vehicle Associations
Comment: The Vehicle Associations
generally supported the proposed
exemption but proposed a modification
to the definition of recreational
activities. They proposed modifying the
definition to state that recreational
activities means motorized and nonmotorized activities, and to add offhighway vehicle driving and riding to
the list of activities expressly included.
The Vehicle Associations stated that
this modification is supported by the
inclusion of off-highway motorcycling,
all-terrain vehicles, and other off-road
motorized vehicle activities in section
11512 of the IIJA, which is the IIJA
section the Agency cited in the NPRM
in support of the proposed definition.
4 Further explanation of the regulations
applicable to passenger motor carriers is provided
in Appendix A to Part 390—Applicability of the
Registration, Financial Responsibility, and Safety
Regulations to Motor Carriers of Passengers.
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The Vehicle Associations also stated
that the modified definition would be
consistent with recreation-related terms
defined elsewhere in Federal statute, as
well as lists of recreational activities
provided as examples by Federal land
management agencies.
Response: The Agency adopts the
Vehicle Associations’ proposed
modification in part. The Agency agrees
that adding ‘‘off-highway vehicle
driving and riding’’ to the nonexhaustive list of covered activities will
help clarify the exemption. As the
Vehicle Associations note, inclusion of
these activities is supported by the list
of recreational activities in section
11512 of the IIJA. Although that section
appears in a separate division and title
of the IIJA from the motor carrier safety
provisions in Division B, Title III, and
does not conclusively define the scope
of the exemption in section 23012, it
does provide some insight into the
legislative intent, as explained in the
NPRM. The Agency adopts the addition
of ‘‘off-highway vehicle driving and
riding’’ to align with that intent. The
Agency considers the other part of the
proposed modification, the addition of
the phrase ‘‘motorized and nonmotorized,’’ unnecessary and declines
to adopt it.
NAMIC
Comment: NAMIC raised a concern
that ‘‘expanding eligibility for an
exemption from federal requirements for
insurance coverage . . . could create
confusion for policyholders and may
not be administratively possible for
insurers.’’ NAMIC raised a further
concern that differing State and Federal
requirements for insurance coverage risk
confusion and underinsurance among
motor carriers. NAMIC suggested further
investigation into the availability of
‘‘coverage on a monthly basis and for
which coverage can be stopped and
started at reasonable notice periods,’’
and whether ‘‘states will permit similar
staggering of insurance coverage for
such vehicles.’’
Response: As explained in response to
AWM’s comment, this rule codifies and
clarifies in the CFR an existing statutory
exemption from operating authority
requirements. Although operating
authority is linked to insurance through
financial responsibility requirements,
this rule does not create or expand any
exemption to Federal insurance
requirements more broadly because
motor carriers eligible for the operating
authority exemption may still be
required to maintain financial
responsibility under other regulations in
the FMCSRs (see, e.g., 49 CFR
387.31(a)). The Agency declines to make
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any changes to the final rule based on
NAMIC’s concern regarding expansion
of an exemption from Federal insurance
requirements.
Regarding potential confusion with
State insurance requirements, the
Agency believes this rule will alleviate
confusion. The rule provides a
definition for recreational activities,
consistent with the Agency’s
understanding of congressional intent
when establishing the exemption, to
create a common understanding among
motor carriers and enforcement officials
about the exemption. The rule should
clarify the Federal requirements and has
no impact on the applicable State
requirements. The Agency disagrees that
the rule increases the risk of confusion
as compared to the statutory exemption
in 49 U.S.C. 13506(b)(4) standing alone,
and it declines to make any changes to
the exemption based on NAMIC’s
comment. State insurance requirements
are relevant to two scenarios in the RIA,
because a seasonal motor carrier eligible
for the exemption may still have to carry
insurance in the off-season to satisfy
State requirements, depending on its
particular circumstances. The Agency
has added a statement in the RIA to
clarify that cost impacts will vary
depending on State insurance coverage
requirements.
Whether certain insurance policies
are available to motor carriers providing
recreational activities eligible for the
operating authority exemption, where
such policies offer cost savings to the
motor carriers due to the exemption, is
a separate concern from the
applicability of the exemption.
Changing the extent of the exemption is
outside the Agency’s authority, and the
Agency declines to make any changes to
the exemption based on this portion of
NAMIC’s comment but does consider it
in relation to the RIA for the rule.
In the NPRM, the Agency’s RIA
included an estimate of potential
insurance cost savings, among other
potential cost savings, for eligible motor
carriers.5 The Agency requested
comments on its estimates of liability
insurance costs and the administrative
costs of researching liability insurance
or other financial responsibility options,
5 Whether a motor carrier eligible for the
operating authority exemption in this rule sees an
impact to their insurance costs as a result of this
rule depends on a number of factors: (1) whether
the motor carrier operates year-round, (2) whether
they operate only seasonally, but maintain yearround insurance coverage to satisfy other Federal or
State requirements, or (3) whether they are already
using the statutory operating authority exemption.
Although the exemption in this rule will not impact
the insurance costs for all carriers, they may realize
other benefits such as administrative cost savings,
as described elsewhere in the rule.
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but the Agency did not receive any
comments on this issue. NAMIC
suggested further research into the
availability of monthly insurance
coverage options for exemption-eligible
motor carriers, but otherwise the
Agency did not receive any data or other
information regarding its insurance cost
estimates.
Based on the information gathered
and the Agency’s experience
administering the relevant regulations,
FMCSA believes it is possible for a
motor carrier providing recreational
activities on a seasonal basis to carry an
insurance policy during its operating
season, terminate the policy at the end
of the season, and obtain a new policy
at the beginning of its next operating
season.6 The NPRM RIA used the
forgone insurance premiums in the
offseason as an estimate of insurance
cost savings for motor carriers in this
scenario. The Agency maintains that
this method provides a reasonable
estimate of the potential insurance cost
savings, even though the actual
insurance cost savings realized by motor
carriers in this scenario may differ
depending on their specific insurer,
policy, location, and other particular
circumstances. The Agency has added a
statement in the RIA to clarify that cost
impacts will vary depending on State
insurance coverage requirements and
has removed quantified estimates of
insurance cost savings. For further
assumptions made on insurance
coverage, refer to the section labeled
‘‘Insurance’’ in the RIA.
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Comments Outside the Scope of the
Rulemaking
Comment: A private citizen objected
to the creation of an exemption from the
operating authority registration rules for
providers of recreational activities.
Response: As explained in response to
AWM’s comment, the exemption that is
being added to § 372.113 reflects the
statutory language in 49 U.S.C.
13506(b)(4) and incorporates the
statutory exemption into the FMCSRs.
FMCSA is not determining through this
rulemaking whether there should be an
exemption from the operating authority
registration rules for providers of
recreational activities. The Agency
considers this comment outside the
scope of the rule and declines to make
any changes to the rule based on it.
6 For
example, Progressive offers policyholders
the option to adjust coverage based on seasonal
changes (Progressive Commercial Auto Insurance,
available at https://www.progressivecommercial.
com/commercial-auto-insurance/ (accessed Sept.
20, 2023)).
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VI. Changes From the NPRM
IX. Regulatory Analyses
In response to a comment, FMCSA is
changing the definition of recreational
activities in this final rule from that
proposed in the NPRM. The Agency is
modifying the definition of recreational
activities in § 372.107 to include offhighway vehicle driving and riding in
the non-exhaustive list of activities
provided as examples within the
definition. The Agency is also making a
grammatical change to the last sentence
of the definition to give the numbered
clauses parallel structure.
A. Executive Order (E.O.) 12866
(Regulatory Planning and Review), E.O.
13563 (Improving Regulation and
Regulatory Review), E.O. 14094
(Modernizing Regulatory Review), and
DOT Regulatory Policies and Procedures
FMCSA has considered the impact of
this final rule under E.O. 12866 (58 FR
51735, Oct. 4, 1993), Regulatory
Planning and Review, E.O. 13563 (76 FR
3821, Jan. 21, 2011), Improving
Regulation and Regulatory Review, and
E.O. 14094 (88 FR 21879, Apr. 11,
2023), Modernizing Regulatory Review.
The Office of Information and
Regulatory Affairs within the Office of
Management and Budget (OMB)
determined that this final rule is not a
significant regulatory action under
section 3(f) of E.O. 12866, as
supplemented by E.O. 13563, and does
not require an assessment of potential
costs and benefits under section 6(a)(3)
of that order. Accordingly, OMB has not
reviewed it under that E.O.
VII. Severability
Congress created an exemption from
FMCSA’s operating authority
registration rules for ‘‘providers of
recreational activities.’’ (49 U.S.C.
13506(b)(4)). This final rule adds new
regulatory text implementing this
statutory exemption and defines the
term recreational activities. This final
rule is meant to operate holistically in
addressing a range of issues necessary to
ensure the implementation of the
exemption. However, FMCSA
recognizes that certain provisions focus
on unique topics. Therefore, FMCSA
finds that the various provisions within
this rule are severable and able to
operate functionally if one or more
provisions were rendered null or
otherwise eliminated. The remaining
provision or provisions within the rule
will continue to operate functionally if
any one or more provisions were
invalidated and any other provision(s)
remained. In the event a court were to
invalidate one or more of this final
rule’s unique provisions, the remaining
provisions should stand, thus allowing
this congressionally mandated
exemption to continue to operate.
VIII. Section-by-Section Analysis
This section-by-section analysis
describes the proposed changes in
numerical order.
Section 372.107
Definitions
As proposed in the NPRM, FMCSA
adds a new paragraph (i), which defines
recreational activities.
Section 372.113 Providers of
Recreational Activities
As proposed in the NPRM, FMCSA
adds a new § 372.113 to subpart A of 49
CFR 372. This new section outlines the
exemption from operating authority
registration in 49 U.S.C. 13506(b)(4).
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Purpose
This final rule codifies the exemption
for providers of recreational activities in
regulation and defines recreational
activities to clarify this exemption by
providing a clear description of what
types of recreational activities do and do
not qualify for the exemption in 49
U.S.C. 13506(b)(4). This ensures that
providers of recreational activities are
aware of their eligibility for the
exemption from filing for operating
authority that FMCSA is adding in new
§ 372.113. Specifically, this rule affects
motor carriers operating a motor vehicle
designed or used to transport between 9
and 15 passengers (including the
driver), whether operated alone or with
a trailer attached to the transport
vehicle, if the motor vehicle is operated
by a person that provides recreational
activities and the transportation is
provided within a 150 air-mile radius of
the location at which passengers
initially boarded the motor vehicle at
the outset of the trip.
This rule provides clarity to both
motor carriers and enforcement officials
regarding which carriers qualify for the
new exemption in section 23012 of the
IIJA as of November 15, 2021. Because
Congress did not define recreational
activities and there is no pre-existing
definition of recreational activities in
statute or regulation, FMCSA is bringing
the FMCSRs into alignment with the
IIJA’s exemption by adding a new
definition of that term. This clarity
resolves possible information
asymmetry currently affecting the
regulated industry and enforcement
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officials as to which carriers qualify for
the operating authority exemption.
Baseline
For the purposes of this analysis, the
changes in this rule are compared to the
baseline established by section 23012 of
the IIJA and the current requirements
for providers of recreational activities
under 49 U.S.C. 13901 and 13902 and
49 CFR part 365. As discussed above,
the IIJA created a new exemption from
the requirement to obtain FMCSA
operating authority registration for
providers of recreational activities.
Accordingly, this exemption has been
available to these motor carriers since
the IIJA was enacted on November 15,
2021. Therefore, the incremental
impacts of this rule relative to the
baseline lie in how the affected industry
and enforcement officials have been
interpreting the term in the absence of
a definition in the FMCSRs.
Uncertainties
The Agency relies on the Motor
Carrier Management Information System
(MCMIS) database to obtain information
on commercial motor carriers subject to
the FMCSRs. While MCMIS does
contain data on passenger vehicle size
(e.g., weight and capacity) and type, it
does not track industry type, nor
whether an operating authority
exemption is applicable. Consequently,
the Agency knows neither the
magnitude of the population affected by
this rule, nor the degree to which
passenger carriers are currently taking
advantage of the exemption. Therefore,
FMCSA estimates how different carriers
will be impacted by costs and benefits
on a per-unit basis, depending on their
current behavior.
In the NPRM, the Agency invited the
public to provide information to address
uncertainty surrounding the size of the
affected population and the frequency of
exemption use. While FMCSA did not
receive such information, a comment
from AWM provided questions about
whether an exemption from the current
requirements for obtaining and
maintaining operating authority was
necessary. However, FMCSA is not
determining through this rulemaking
whether there should be an exemption
from the operating authority registration
rules for providers of recreational
activities. This decision was made by
Congress when it passed the IIJA in
2021, which created a statutory
exemption. FMCSA’s role in this
rulemaking is only to define the term
recreational activities and consider the
impacts of clarifying the exemption. The
Agency will therefore not revise the rule
in response to comments outside of that
scope.
Carrier Cost Components
The resulting cost impacts of the
definitional clarification in this rule
13989
include changes in paperwork, fees, and
insurance costs associated with
maintaining operating authority.
Because there is no pre-existing
definition of recreational activities,
motor carriers may be interpreting their
eligibility for the operating authority
exemption in varying ways. Depending
on current interpretations, this rule will
either increase, decrease, or have no
incremental impact on the degree to
which the operating authority
exemptions are used relative to the
baseline. Because FMCSA is unable to
ascertain how various carriers
interpreted this exemption set forth by
section 23012 of the IIJA in 2021, the
Agency estimates the impacts of this
rule based on four hypothetical
scenarios of exemption use. These four
scenarios make use of the forms and
insurance cost analyses set forth below,
in advance of the scenarios.
Forms
Currently, there are several forms that
providers of recreational activities are
responsible for submitting to FMCSA in
order to maintain operating authority
registration. As detailed later in this
analysis, the use of these forms, as
explained in Table 1, may change as a
result of this rule, depending on how
the affected carriers are interpreting this
exemption.
TABLE 1—FORMS CURRENTLY USED IN MAINTAINING OPERATING AUTHORITY
Form
Affected groups
Motor Carrier Automobile Bodily Injury and Property Damage Liability
Certificate of Insurance (BMC–91 or BMC–91X).
Motor Carrier Records Change (MCSA–5889) ........................................
Request for Revocation of Authority Granted (OCE–46) .........................
Application for Motor Passenger Carrier Authority (OP–1(P)) .................
Tables 2 and 3 display the paperwork
burden of these forms to private entities
and to the Government, respectively.
These estimates are based on the
Information Collection Request (ICR)
Carriers that must provide proof of liability insurance meeting the minimum levels of financial responsibility.
Carriers reinstating operating authority.
Carriers voluntarily revoking operating authority.
Carriers with an existing USDOT number wishing to expand to an operation requiring operating authority.
supporting statements associated with
each form. For example, Table 2 shows
that Forms BMC–91 and BMC–91X are
estimated to take 10 minutes to
complete by an insurance claims and
policy processing clerk at a wage rate 7
of $39.36, leading to a paperwork
burden of $7 (10 minutes × $39.36 =
$7).8 9
TABLE 2—PAPERWORK COSTS TO PRIVATE SECTOR
[2022$]
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Paperwork
Forms BMC–91 or BMC–91X by insurance claims
processer ..........................................................................
Form MCSA–5889 by office clerk ........................................
7 DOL, BLS. Occupational Employment and Wage
Statistics (OEWS). National. May 2022. 43–9041
Insurance Claims and Policy Processing Clerks.
Available at https://www.bls.gov/oes/current/
oes439041.htm (accessed Sept. 1, 2023).
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Hours to
submit form
Wage
$39.36
31.99
0.17
0.25
8 This estimate is based on the calculations used
in the ICR titled, ‘‘Financial Responsibility Motor
Carriers, Freight Forwarders and Brokers,’’ covered
by OMB Control Number 2126–0017.
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Cost per form
$7
8
Filing fee
........................
$80
Total cost
$7
88
9 The supporting statement for the ‘‘Financial
Responsibility Motor Carriers, Freight Forwarders
and Brokers’’ ICR estimates Government costs for
Forms BMC–91 and BMC–91X at $0, as they are
filed electronically.
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TABLE 2—PAPERWORK COSTS TO PRIVATE SECTOR—Continued
[2022$]
Paperwork
Hours to
submit form
Wage
Form OCE–46 by office clerk ..............................................
Form OP–1(P) by office clerk ..............................................
31.99
31.99
Cost per form
0.25
2
8
64
Filing fee
........................
300
Total cost
8
364
Estimates may not total due to rounding.
TABLE 3—PAPERWORK COSTS TO GOVERNMENT
[2023$]
GS–9, Step 5
wage
Paperwork
Form MCSA–5889 .......................................................................................................................
Form OCE–46 ..............................................................................................................................
Form OP–1(P) .............................................................................................................................
$73.71
73.71
73.71
Hours to
process form
0.25
0.25
6.5
Cost per form
$18
18
479
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Estimates may not total due to rounding.
FMCSA computes its estimates of
labor costs using data gathered from
several sources. Labor costs comprise
wages, fringe benefits, and overhead.
Fringe benefits include paid leave,
bonuses and overtime pay, health and
other types of insurance, retirement
plans, and legally required benefits
(Social Security, Medicare,
unemployment insurance, and workers
compensation insurance). Overhead
includes any expenses to a firm
associated with labor that are not part of
employees’ compensation; this typically
includes many types of fixed costs of
managing a body of employees, such as
management and human resource staff
salaries or payroll services. The
economic costs of labor to a firm should
include the costs of all forms of
compensation and labor-related
expenses. For this analysis, costs of
labor to a firm have been calculated
relative to total compensation (base
wages, plus fringe benefits, plus
overhead).
The primary source for industry
wages is the median hourly wage data
(May 2022) from the U.S. Department of
Labor (DOL), Bureau of Labor Statistics
(BLS), Occupational Employment and
Wage Statistics (OEWS).10
BLS does not publish data on fringe
benefits for specific occupations, but it
does for the broad industry groups in its
Employer Costs for Employee
Compensation release. For office clerk
employees, this analysis uses an average
hourly wage of $28.89 and average
hourly benefits of $14.85 for private
industry workers in ‘‘transportation and
10 DOL, BLS. Occupational Employment and
Wage Statistics (OEWS). National. May 2022.
Available at: https://www.bls.gov/oes/current/oes_
nat.htm (accessed Sept. 1, 2023).
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warehousing’’ 11 to estimate that fringe
benefits are equal to 51.4 percent
($14.85 ÷ $28.89) of wages. For
insurance claims processors, this RIA
uses an average hourly wage of $37.31
and average hourly benefits of $18.92
for private industry workers in
‘‘financial activities’’ 12 to estimate that
fringe benefits are equal to 50.7 percent
($18.92 ÷ $37.31) of wages.
For estimating the overhead rates on
wages, the Agency used industry data
gathered for the Truck Costing Model
developed by the Upper Great Plains
Transportation Institute, North Dakota
State University as a proxy for the
overhead cost of employees in the
transportation intermediary and surety
and trustee industries.13 Research
conducted for this model found an
average cost of $0.107 per mile of
commercial motor vehicle operation for
management and overhead, and $0.39
per mile for labor, indicating an
overhead rate of 27 percent (27 percent
= $0.107 ÷ $0.39, rounded to the nearest
whole percent).
It is assumed that FMCSA reviewers
will be Federal government employees
located in the Washington, DC region at
the GS–9 Step 5 wage rate.14 OPM does
11 DOL, BLS. Table 4: Employer costs for
Employee Compensation for private industry
workers by occupation and industry group, Dec
2022. Available at: https://www.bls.gov/
news.release/archives/ecec_03172023.htm
(accessed Sept. 1, 2023).
12 Ibid.
13 Berwick, Farooq. Truck Costing Model for
Transportation Managers. North Dakota State
University. Upper Great Plains Transportation
Institute. August 2003. Appendix A, pp. 42–47.
Available at: https://www.ugpti.org/resources/
reports/downloads/mpc03-152.pdf (accessed Jan. 5,
2024).
14 OPM Pay & Leave Salaries & Wages. Salary
Table 2023–DCB, Hourly Basic (B) Rates by Grade
and Step. Available at https://www.opm.gov/policy-
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Frm 00016
Fmt 4700
Sfmt 4700
not publish annual rates that include
fringe benefits or overhead. OMB does
publish an object class analysis of the
budget of the U.S. Government. The
Object Class Analysis estimates that, in
2021, DOT spent $6,351 million in
employee compensation and $2,840
million in employee benefits. FMCSA
estimates a fringe benefit rate of 45
percent ($2,840 ÷ $6,351) for FMCSA
personnel. FMCSA uses the DOT Volpe
Center overhead rate of 64 percent for
Federal personnel.15 The Volpe Center
is a Federal fee-for-service research and
innovation center in the DOT. Unlike
most Federal agencies, Volpe receives
no direct appropriation from Congress
and must cover direct and indirect
expenses through agreements with
project sponsors.16 17 These indirect
costs are recovered through the
overhead rate charged on direct labor
costs. Volpe employees are
compensated according to the Federal
locality pay tables used for all Federal
employees and their labor costs include
the same employee benefits. Therefore,
FMCSA believes that the overhead rate
for Volpe personnel is similar to the rate
for all DOT personnel.
data-oversight/pay-leave/salaries-wages/salarytables/23Tables/html/DCB_h.aspx (accessed Sept.
5, 2023).
15 DOT, Volpe Center. Volpe Project Costs.
Available at: https://www.volpe.dot.gov/work-withus/volpe-project-costs (accessed Jan. 4, 2024).
16 DOT, Volpe Center. How to Initiate Work.
Available at: https://www.volpe.dot.gov/work-withus/how-initiate-work (accessed Jan. 4, 2024).
17 DOT, Volpe Center. Volpe Project Costs.
Available at: https://www.volpe.dot.gov/work-withus/volpe-project-costs (accessed Jan. 4, 2024).
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Insurance
also have proof of liability insurance
filed with FMCSA. The Agency
estimates that such liability insurance
currently costs entities an average of
$190 per month for one vehicle, or
$2,280 per year ($190 × 12 = $2,280).18
In addition to submitting forms to
FMCSA, providers of recreational
activities wishing to maintain a valid
operating authority registration must
13991
Using a range of fleet sizes for
illustrative purposes, Table 4 presents
the estimated costs currently associated
with maintaining liability insurance by
fleet size.
TABLE 4—CURRENT INSURANCE ESTIMATES BY FLEET SIZE
[2022$]
Number of vehicles in fleet
Monthly premium
1 ...............................................................................................................................................
5 ...............................................................................................................................................
10 .............................................................................................................................................
$2,280
11,400
22,800
Scenario One includes providers of
recreational activities that have been
eligible for the operating authority
exemption established by section 23012
of the IIJA in 2021 but are not utilizing
it due to the definitional ambiguity of
recreational activities. If there are such
carriers, after publication of this final
rule they will understand they are
classified as providers of recreational
activities and are, therefore, eligible for
this exemption. This would lead to an
incremental increase in the number of
operational authority exemptions being
used relative to the baseline. As
explained in detail below, these carriers
will be impacted in different ways by
the following costs and cost savings:
financial responsibility compliance
costs, operating authority registration
fees, and paperwork costs.
Carriers under Scenario One that are
currently maintaining their operating
authority registration year-round would
experience cost savings associated with
maintaining financial responsibility. In
the NPRM, the Agency invited the
public to provide additional information
on the scenarios presented in the RIA,
and the estimated insurance premiums.
While no data were provided on these
estimates, NAMIC suggested that the
Agency further research the availability
of insurance policies that provide
coverage on a monthly basis, and
whether States would permit similar
staggering of required insurance
coverage.
As detailed above in section V.B.
Comments and Responses, based on the
information gathered and the Agency’s
experience administering the relevant
regulations, FMCSA believes it is
possible for a motor carrier providing
recreational activities on a seasonal
basis to carry an insurance policy
during its operating season, terminate
the policy at the end of the season, and
obtain a new policy at the beginning of
its next operating season.19 The Agency
declines to make any modifications to
this analysis based on this comment.
Regarding the second part of NAMIC’s
comment, the Agency concurs that the
degree of insurance cost savings is
dependent on several factors, including
other Federal or State insurance
requirements. FMCSA amends this RIA
by removing quantified estimates of
insurance cost savings and
acknowledging the varying impacts
State insurance requirements will have
on the degree of cost savings.
As described above, FMCSA estimates
average monthly insurance premiums of
$190 per vehicle. The Agency maintains
that certain motor carriers will
experience insurance cost savings;
however, the quantified amount of those
savings may be offset by the need to
satisfy other Federal or State insurance
requirements. Motor carriers that do not
have to meet other Federal or State
insurance requirements would save on
insurance costs during months they are
not in operation.
There may also be cost savings as a
result of avoided insurance-related
administrative requirements. Currently,
carriers must choose an insurance plan
or other acceptable form of financial
responsibility, and have proof filed with
FMCSA whenever they apply for or
reinstate operating authority. The
Agency estimates that it takes carriers 8
hours to research and identify which
insurance company, financial surety, or
bond provider they will use. Assuming
this task is performed by an office clerk,
this activity is estimated to cost each
carrier $256 ($31.99 × 8 hours = $256).20
As displayed in Table 2, carriers
under Scenario One were also required
to ensure that their financial
responsibility provider submit Forms
BMC–91 or BMC–91X to FMCSA at a
cost of $7 per form. These
administrative requirements for
insurance were no longer required after
the enactment of the IIJA in 2021;
therefore, the definitional clarification
in this rule may lead to cost savings of
$256 to the carrier and $7 to the
insurance company.
Some carriers under Scenario One
were filing Form OCE–46 to voluntarily
revoke their operating authority
registrations during the off-season
months so that they did not need to
maintain insurance at FMCSA’s
minimum prescribed levels during those
months. To resume operations, the
providers were then required to submit
Form MCSA–5889 to reinstate their
operating authority registrations during
the months when they were operating.
As displayed in Tables 2 and 3, it is
estimated to cost $8 to submit Form
18 Insuranks Online Insurance Comparison
Marketplace. https://www.insuranks.com/
commercial-van-insurance (accessed Sept. 12,
2023). These estimates are quoted from 12 different
insurance companies, including Geico, Progressive,
State Farm, and others. The monthly quotes were
summed and then divided by 12 to obtain an
estimated monthly average for the industry: ($115
+ $120 + $130 + $183 + $165 + $180 + $195 + $210
+ $221 + $232 + $254 + $270) ÷ 12 = $190.
19 For example, Progressive offers policyholders
the option to adjust coverage based on seasonal
changes (Progressive Commercial Auto Insurance,
available at https://www.progressivecommercial.
com/commercial-auto-insurance/ (accessed Sept.
20, 2023)).
20 DOL, BLS. Occupational Employment and
Wage Statistics (OEWS). National. May 2022. 43–
4071 Office Clerks, General. Available at: https://
www.bls.gov/oes/current/oes434071.htm (accessed
Sept. 9, 2023).
Exemption Use Scenarios for Analyzing
Carrier Costs
The following four scenarios build on
the forms and insurance cost analyses
detailed above and examine how the
impact of this rule on carrier costs may
vary under different exemption use
conditions. The scenarios are an
increase in exemption use by carriers, a
decrease in exemption use by carriers,
no change in exemption use, and
exemption use by new carriers entering
the industry.
Scenario One: Increase in Exemption
Use
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$190
950
1,900
Yearly premium
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MCSA–5889, plus a fee of $80 to
carriers, and $18 in costs to FMCSA.21
Form OCE–46 is also estimated to cost
$8 per carrier and $18 for FMCSA
processing time.22 As a result of this
rule, if there are carriers under this
scenario, they would no longer be
subject to the costs associated with
submitting Form MCSA–5889 or Form
OCE–46.
Scenario Two: Decrease in Exemption
Use
It is also possible that this rule will
limit the use of this exemption for
certain carriers. Because neither FMCSA
nor Congress provided a definition of
recreational activities, there may be
carriers that incorrectly believed they
are providers of recreational activities,
but upon issuance of this rule, would
realize they are not. These carriers may
currently be incorrectly utilizing this
exemption and revoking their operating
authority when they were not eligible to
do so. Therefore, if such carriers exist,
they may incur a cost of $88 to submit
Form MCSA–5889 as a result of this
rulemaking for reinstatement of their
operating authority (Table 2). They
would also need to resume paying for
financial responsibility in order to
maintain valid operating authority.
Illustrative examples of possible
insurance-related costs are displayed in
Tables 4 and 5.
Scenario Three: No Incremental Change
in Exemption Use
There may also be eligible carriers
that correctly interpreted Congress’
intent and have been utilizing the
exemption correctly since the IIJA’s
enactment. These carriers are not
expected to be impacted by this rule
relative to the baseline. They have
already gone through the steps of
voluntarily revoking their operating
authority with FMCSA, are maintaining
financial responsibility only while in
operation, and are not paying fees or
completing paperwork associated with
maintaining operating authority.
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Scenario Four: New Providers
This rule may also affect eligible
providers considering engaging in
providing recreational activities in the
future. If there are new carriers
considering entering this field that were
21 This
estimate is based on the calculations used
in the ICR titled, ‘‘Motor Carrier Records Change
Form’’ (Form MCSA–5889), covered by OMB
Control Number 2126–0060. The cost of a paper
submission is $7 and the cost of an electronic
submission is $0.
22 This estimate is based on the calculations used
in the ICR titled ‘‘Request for Revocation of
Authority Granted,’’ covered by OMB Control
Number 2126–0018.
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not aware of the IIJA exemption, they
would no longer need to account for the
following costs as a result of this rule:
year-round financial responsibility
premiums required by FMCSA,
financial responsibility-related
administrative costs, and operating
authority fees and paperwork.
Prior to the enactment of the IIJA, new
providers of recreational activities had
to submit the ‘‘Application for Motor
Passenger Carrier Authority’’ (Form OP–
1(P)).23 The Agency estimates that this
form costs $64 with a $300 fee for
carriers, and $479 in Government costs
(Tables 2 and 3, respectively).24
Additionally, as described in the
Financial Responsibility under Scenario
One section, the avoided insurancerelated administrative costs would be $7
for insurance companies and $256 for
carriers. An illustrative example of
potential avoided insurance premium
costs is presented in Table 5.
Government Costs
In addition to the cost to carriers
analyzed in the four scenarios above,
this rule may have government costs.
The changes implemented by this rule
will not require additional training for
enforcement personnel. The Agency
expects that the definitional
clarification set forth in this rule will be
communicated to FMCSA personnel
and the Agency’s State-based
enforcement partners through existing
means, such as policy updates and
ongoing training. The Agency will be
impacted by the costs and cost savings
associated with this rule, as outlined in
Table 3 ($479 for Form OP–1(P), $18 for
Form OCE–46 and Form MCSA–5889).
Benefits
The affected entities are providers of
recreational activities that typically
consist of physically demanding
outdoor experiences or excursions that
do not have transportation as an integral
part of the activity itself. Overall, the
outdoor recreation economy accounted
for 1.9 percent ($454 billion) of currentdollar gross domestic product (GDP) for
the nation in 2021.25 Hawaii, Montana,
Vermont, Alaska, and Maine are among
23 Applicants that have never held a USDOT
number or any other registration issued by FMCSA
must file the URS online application (Form MCSA–
1) to obtain a USDOT number and register for
operating authority.
24 This estimate is based on calculations used in
the ICR titled ‘‘Licensing Applications for Motor
Carrier Operating Authority,’’ covered by OMB
Control Number 2126–0016.
25 DOL, Bureau of Economic Analysis (BEA). BEA
Data, Special Topics, Outdoor Recreation Satellite
Account, U.S. and States, 2021. Current release
Nov. 9, 2022. Available at https://www.bea.gov/
data/special-topics/outdoor-recreation (accessed
Sept 13, 2023).
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the States where outdoor recreation as a
percent of that States’ GDP ranks the
highest. For example, in 2021, outdoor
recreation accounted for $4.4 billion of
Hawaii’s $91.1 billion overall GDP, or
4.8 percent—the highest proportion of
any State. In terms of actual levels, the
States that produced the highest outdoor
recreation GDP in 2021 were California
($54.7 billion), Florida ($41.9 billion),
and Texas ($37.5 billion).
Differences in interpretation between
regulated entities and enforcement
officials may be hindering consistent
enforcement practices, thereby
impacting business-related decisions in
providing transportation for recreational
activities. This rule may resolve this
information asymmetry by creating a
common understanding between
FMCSA and motor carriers. Because this
rule may also lead to an increase in
exemption use, it will benefit carriers by
improving the efficiency of their
business operations and therefore
increase both consumer and producer
surplus.
B. Congressional Review Act
This rule is not a major rule as
defined under the Congressional Review
Act (5 U.S.C. 801–808).26
C. Regulatory Flexibility Act (Small
Entities)
The Regulatory Flexibility Act of
1980, Public Law 96–354, 94 Stat. 1164
(5 U.S.C. 601–612), as amended by the
Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104–121,
110 Stat. 857, March 29, 1996) and the
Small Business Jobs Act of 2010 (Pub.
L. 111–240, 124 Stat. 2504, September
27, 2010), requires Federal agencies to
consider the effects of the regulatory
action on small business and other
small entities and to minimize any
significant economic impact. The term
small entities comprises small
businesses and not-for-profit
organizations that are independently
owned and operated and are not
dominant in their fields, and
governmental jurisdictions with
populations of less than 50,000.
Accordingly, DOT policy requires an
analysis of the impact of all regulations
on small entities, and mandates that
26 A major rule means any rule that OMB finds
has resulted in or is likely to result in (a) an annual
effect on the economy of $100 million or more; (b)
a major increase in costs or prices for consumers,
individual industries, geographic regions, Federal,
State, or local government agencies; or (c)
significant adverse effects on competition,
employment, investment, productivity, innovation,
or on the ability of United States-based enterprises
to compete with foreign-based enterprises in
domestic and export markets (5 U.S.C. 802(4)).
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agencies strive to lessen any adverse
effects on these businesses.
FMCSA has not determined whether
this final rule will have a significant
economic impact on a substantial
number of small entities. Therefore,
FMCSA prepared an initial regulatory
flexibility analysis (IRFA) for the NPRM
and a final regulatory flexibility analysis
(FRFA) for the final rule.
A FRFA must contain the following:
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1. A statement of the need for, and
objectives of, the rule.
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.
3. The response of the agency to any
comments filed by the Chief Counsel for
Advocacy of the Small Business
Administration (SBA) 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.
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.
5. A description of the projected reporting,
recordkeeping, and other compliance
requirements of the rule, including an
estimate of the classes of small entities which
will be subject to the requirement and the
type of professional skills necessary for
preparation of the report or record.
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.
7. Description of steps taken by a covered
agency to minimize costs of credit for small
entities.
1. A statement of the need for, and
objectives of, the rule.
Section 23012 of the IIJA amended 49
U.S.C. 13506 by adding a new
exemption in paragraph (b)(4) from the
operating authority registration
requirements. FMCSA is adding a new
regulatory section incorporating that
statutory exemption and also including
a definition for the exempt operations.
The exemption from operating authority
registration applies to motor carriers
operating a motor vehicle designed or
used to transport between 9 and 15
passengers (including the driver)
whether operated alone or with a trailer
attached to the transport vehicle, if the
motor vehicle is operated by a person
that provides recreational activities and
the transportation is provided within a
150 air-mile radius of the location at
which passengers initially boarded the
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motor vehicle at the outset of the trip.
The new statutory exemption did not
include a definition of recreational
activities, creating some ambiguity in
the exemption’s applicability. The
Agency is codifying the exemption in
regulation and removing ambiguity by
defining recreational activities.
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. The Agency received four
comments from AWM, NAMIC, the
Vehicle Associations, and a private
citizen.
In response to the Vehicle
Associations’ comment, the Agency is
modifying the definition of recreational
activities in § 372.107 to include offhighway vehicle driving and riding in
the non-exhaustive list of activities
provided as examples within the
definition. As detailed in section V.
Discussion of Proposed Rulemaking and
Comments of this final rule, the Vehicle
Associations proposed modifying
recreational activities to include
motorized and non-motorized activities,
such as off-highway vehicle driving and
riding. The Agency adopts the Vehicle
Associations’ proposed modification in
part.
As detailed in paragraph 4 of this
FRFA, FMCSA provided a wide range of
North American Industry Classification
System (NAICS) codes of the
recreational activities industry in the
IRFA, in order to capture all of the
potential sectors that providers of
recreational activities may operate
under. The addition of ‘‘off-highway
vehicle driving and riding’’ to the list of
examples is intended for additional
clarification and will not expand the list
of affected NAICS codes that were
estimated in the IRFA, as presented in
Table 6.
As described in section IX.A
Regulatory Analyses, the Agency’s
preliminary RIA included quantified
estimates of potential insurance cost
savings, among other potential cost
savings, for eligible motor carriers and
the Agency invited the public to provide
additional information on these
estimates. While no data were provided
as to the estimated premiums, NAMIC
suggested that the Agency further
research the availability of insurance
policies that provide coverage on a
monthly basis. The Agency maintains
that certain motor carriers may save on
insurance costs as a result of this rule,
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13993
depending on their particular
circumstances as detailed in section
IX.A, but the Agency removes the
quantified estimates of that savings from
the RIA.
The Agency concurs that the degree of
insurance cost savings is dependent on
several factors, including other Federal
or State insurance requirements.
Therefore, FMCSA amends this RIA by
removing quantified estimates of
insurance cost savings and
acknowledging the varying impacts
State insurance requirements will have
on the degree of cost savings. The
quantified amount of those savings may
be offset by the need to satisfy other
Federal or State insurance requirements.
Motor carriers that do not have to meet
other Federal or State insurance
requirements would save on insurance
costs during months they are not in
operation.
The remaining comments from AWM
and the private citizen did not relate to
the clarification of the recreational
activities exemption. AWM questioned
the magnitude of the burden associated
with obtaining and maintaining
operating authority, and the private
citizen raised concerns about effects on
public land usage. As detailed in section
V. Discussion of Proposed Rulemaking
and Comments, FMCSA is not
determining through this rulemaking
whether there should be an exemption
from the operating authority registration
rules for providers of recreational
activities. This decision was made by
Congress when it passed the IIJA in
2021, which created a statutory
exemption. FMCSA’s scope in this
rulemaking is only to define the term
recreational activities and consider the
impacts of providing that definition to
clarify the exemption. The Agency
considers the objections to the creation
of the exemption outside the scope of
the rule and declines to make any
changes to the rule based on them.
3. The response of the agency to any
comments filed by the Chief Counsel for
Advocacy of the SBA 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 SBA filed no comments to the
proposed rule. Thus, FMCSA has
nothing to respond to from the Chief
Counsel for Advocacy of the SBA.
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.
Small entity is defined in 5 U.S.C.
601. Section 601(3) defines a small
entity as having the same meaning as
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small business concern under section 3
of the Small Business Act. This includes
any small business concern that is
independently owned and operated and
is not dominant in its field of operation.
Section 601(4), likewise includes within
the definition of small entities not-forprofit enterprises that are independently
owned and operated and are not
dominant in their fields of operation.
Additionally, section 601(5) defines
small entities as governments of cities,
counties, towns, townships, villages,
school districts, or special districts with
populations less than 50,000.
This final rule affects motor carriers
operating a motor vehicle designed or
used to transport between 9 and 15
passengers (including the driver)
whether operated alone or with a trailer
attached to the transport vehicle, if the
motor vehicle is operated by a person
that provides recreational activities and
the transportation is provided within a
150 air-mile radius of the location at
which passengers initially boarded the
motor vehicle at the outset of the trip.
Providers of recreational activities
affected by this rule operate under many
different NAICS 27 codes with differing
size standards. The SBA has released
updated small entity size standards
since the publication of the IRFA. The
new size standards became effective
March 17, 2023.28 FMCSA has updated
the estimates and size standards in this
FRFA where needed.
In the IRFA for the proposed rule,
FMCSA provided a wide range of
NAICS codes in the recreational
activities industry, in order to capture
all of the potential NAICS codes that
providers of recreational activities may
operate under. In doing so, FMCSA
highlighted many entities that perform
various other functions beyond
transporting passengers to and from
recreational activities. The Agency also
requested public comment on the
NAICS codes analyzed in the IRFA but
did not receive any such comments.
Therefore, the Agency assumes the
NAICS codes analyzed in the IRFA are
representative of the composition of the
affected industries and is retaining those
codes for the purposes of this FRFA.
As shown in Table 6 below, the SBA
size standards for providers of
recreational activities range from $9
million in revenue per year for the All
Other Amusement Recreation Industries
NAICS national industry, to $47 million
in revenue per year for Racetracks.
TABLE 6—SBA SIZE STANDARDS FOR SELECTED INDUSTRIES
[in millions of 2023$]
NAICS code
SBA size standard
in millions
NAICS industry description
Subsector 487—Scenic and Sightseeing Transportation
487110 ...........
487210 ...........
487990 ...........
Scenic and Sightseeing Transportation, Land ..................................................................................................
Scenic and Sightseeing Transportation, Water ................................................................................................
Scenic and Sightseeing Transportation, Other .................................................................................................
$20.5
14.0
25.0
Subsector 561—Administrative and Support Services
561520 ...........
Tour Operators ..................................................................................................................................................
25.0
Subsector 711—Performing Arts, Spectator Sports, and Related Industries
711212 ...........
711219 ...........
Racetracks ........................................................................................................................................................
Other Spectator Sports .....................................................................................................................................
47.0
16.5
Subsector 713—Amusement, Gambling, and Recreation Industries
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713910
713920
713940
713990
...........
...........
...........
...........
Golf Courses and Country Clubs ......................................................................................................................
Skiing Facilities .................................................................................................................................................
Fitness and Recreational Sports Centers .........................................................................................................
All Other Amusement Recreation Industries ....................................................................................................
19.0
35.0
17.5
9.0
FMCSA examined data from the 2017
Economic Census, the most recent
Census for which data were available, to
determine the percentage of firms that
have revenue at or below SBA’s
thresholds within each of the NAICS
industries.29 Boundaries for the revenue
categories used in the Economic Census
do not precisely coincide with the SBA
thresholds. Instead, the SBA threshold
generally falls between two different
revenue categories. However, FMCSA
was able to make reasonable estimates
as to the percent of small entities within
each NAICS code.
The Agency estimates that many
entities affected by this rule fall under
the Scenic and Sightseeing
Transportation NAICS subsector (487).
Firms in this subsector utilize
transportation equipment to provide
recreation and entertainment. These
operations are distinct from passenger
transportation carried out for other
types of for-hire transportation. The
recreational activities involved are local
in nature, usually involving a same-day
return to the point of departure.30
Industry groups under this subsector
include Scenic and Sightseeing
Transportation, Land (4871), Scenic and
Sightseeing Transportation, Water
(4872), and Scenic and Sightseeing
Transportation, Other (4879).
The Scenic and Sightseeing
Transportation, Land NAICS national
industry (487110) has a revenue size
standard of $20.5 million, which falls
between two Economic Census revenue
27 More information about NAICS is available at
https://www.census.gov/naics (accessed Sept. 13,
2023).
28 SBA Table of Small Business Size Standards
Matched to NAICS effective Mar. 17, 2023, located
at https://www.sba.gov/sites/sbagov/files/2023-06/
Table%20of%20Size%20Standards_Effective%20
March%2017%2C%202023%20%282%29.pdf
(accessed Sept. 13, 2023).
29 U.S. Census Bureau. 2017 Economic Census.
Available at https://data.census.gov/cedsci/table?q=
EC1700&n=48-49&tid=ECNSIZE2017.
EC1700SIZEREVEST&hidePreview=true (accessed
Sept. 13, 2023).
30 U.S. Census Bureau 2022 NAICS Definition.
Available at https://www.census.gov/naics/
?input=48&year=2022&details=487 (accessed Sept.
13, 2023).
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categories, $10 million and $25 million.
This industry comprises firms engaged
in various outdoor excursions,
including horse-drawn sightseeing
rides. The percentages of Scenic and
Sightseeing Transportation, Land with
revenue less than these amounts ranged
from 97 percent to 98 percent. Because
the SBA threshold is closer to the higher
of these two boundaries, FMCSA has
assumed that the percent of Scenic and
Sightseeing Transportation, Land
entities that are small will be closer to
98 percent and is using that figure.
For Scenic and Sightseeing
Transportation, Water (487210), the $14
million SBA threshold falls between
two Economic Census revenue
categories, $10 million and $25 million.
Entities in this national industry are
primarily engaged in providing scenic
and sightseeing transportation on water,
such as fishing boat charter operation.
The percentages of Scenic and
Sightseeing Transportation, Water with
revenue less than these amounts ranged
from 97 percent to 99 percent. Because
the SBA threshold is closer to the lower
of these two boundaries, FMCSA has
assumed that the percent of these
entities that are small will be closer to
97 percent and is using that figure.
Scenic and Sightseeing
Transportation, Other (487990) focuses
on all other scenic and sightseeing
transportation, such as hot air balloon
rides and glider excursions. The SBA
size standard for this national industry
is $25 million. The $25 million SBA
threshold falls between two Economic
Census revenue categories, $10 million
and $25 million. The percentages of
these entities with revenue less than
these amounts were 93 percent and 98
percent. Because the SBA threshold
coincides with the higher of these two
boundaries, FMCSA has assumed that
the percent of these providers that are
small will be closer to 98 percent and
is using that figure.
Firms falling under the Travel
Arrangement and Reservation Services
industry group (5615) may also be
impacted by this NPRM. This industry
group comprises the Travel Agencies
(561510), Tour Operators (561520), and
Convention and Visitors Bureaus
(561591) national industries.31 The
Agency assumes that providers of
recreational activities fall under the
Tour Operators national industry.
Tour Operators (561520) focuses on
arranging and assembling tours,
including travel or wholesale tour
31 US Census Bureau 2022 NAICS Definition.
Available at https://www.census.gov/naics/
?input=56&year=2022&details=5615 (accessed Sept.
14, 2023).
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operators. The SBA size standard for
this national industry is $25 million,
which falls between two Economic
Census revenue categories, $25 million
and $100 million. The percentages of
Tour Operators with revenue less than
these amounts were 92 percent and 100
percent. The Agency presents a highend estimate of 100 percent due to
limitations in Economic Census data
availability. Revenue data for firms with
revenue less than $100,000, which
would be considered small, are
suppressed by the Economic Census to
avoid disclosing for individual
companies. Because the Agency is
unable to ascertain the revenue for the
suppressed firms, the high-end estimate
assumes that all such firms fall under
the $25 million SBA threshold and
would be considered small. The lowend estimate assumes the suppressed
firms are not small. Because the SBA
threshold is closer to the lower of these
two boundaries, FMCSA has assumed
that the percent of Tour Operators that
is small will be closer to 92 percent and
is using that figure.
The Agency estimates that many
providers of recreational activities
affected by this NPRM would also fall
under the Arts, Entertainment, and
Recreation sector (71). This sector
includes a wide range of firms operating
facilities that meet varied cultural,
entertainment, and recreational interests
of patrons.32 Subsectors under this
group include Performing Arts,
Spectator Sports, and Related Industries
(711), Amusement, Gambling, and
Recreational Industries (713), and
others.
The industry groups under the
Spectator Sports and Related Industries
(711) subsector cover Spectator Sports
(7112). Spectator Sports includes the
Racetracks (711212) and Other Spectator
Sports (711219) national industries.
Racetracks (711212) focuses on firms
operating racetracks without casinos,
such as auto, motorcycle, snowmobile,
and horse races. The SBA size standard
for this national industry is $47 million.
The $47 million SBA threshold falls
between two Economic Census revenue
categories, $25 million and $100
million. The percentages of these
entities with revenue less than these
amounts were 83 percent and 100
percent.33 Because the SBA threshold is
32 US Census Bureau 2022 NAICS Definition.
Available at https://www.census.gov/naics/
?input=71&year=2022&details=71 (accessed Sept. 5,
2023).
33 The Agency presents a high-end estimate of 100
percent due to limitations in Economic Census data
availability. Revenue data for firms with revenue
less than $100,000, which would be considered
small, are suppressed by the Economic Census to
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13995
closer to the lower of these two
boundaries, FMCSA has assumed that
the percent of Racetracks entities that
are small will be closer to 83 percent
and is using that figure.
Other Spectator Sports (711219)
focuses on independent athletes, owners
of racing participants (such as cars,
dogs, and horses), and firms engaged in
specialized services in support of said
participants. The SBA size standard for
this national industry is $16.5 million,
which falls between two Economic
Census revenue categories, $10 million
and $25 million. The percentages of
these entities with revenue less than
these amounts were 82 percent and 100
percent.34 Because the SBA threshold is
closer to the lower of these two
boundaries, FMCSA has assumed that
the percent of Other Spectator Sports
entities that are small will be closer to
82 percent and is using that figure.
The industry groups under the
Amusement, Gambling, and Recreation
Industries (713) subsector include
Amusement Parks and Arcades (7131),
Gambling Industries (7132), and Other
Amusement and Recreation Industries
(7139).35 The Agency estimates the
entities affected by this NPRM would
fall into the third industry group, Other
Amusement and Recreation Industries
(7139). This group, as detailed below,
covers firms operating golf courses and
country clubs, skiing facilities, and all
other amusement and recreation
activities.36
Entities falling under Golf Courses
and Country Clubs (713910) primarily
engage in operating such facilities, and
providing food and beverage services,
equipment rental, or golf instruction.
The SBA size standard for this national
industry is $19 million, which falls
between two Economic Census revenue
categories, $10 million and $25 million.
The percentages of Golf Courses and
avoid disclosing for individual companies. Because
the Agency is unable to ascertain the revenue for
the suppressed firms, the high-end estimate
assumes that all such firms fall under the $47
million SBA threshold. The low-end estimate
assumes the suppressed firms are not small.
34 The Agency presents a high-end estimate of 100
percent due to limitations in Economic Census data
availability. Revenue data for firms with revenue
less than $100,000, which would be considered
small, are suppressed by the Economic Census.
Because the Agency is unable to ascertain the
revenue for the suppressed firms, the high-end
estimate assumes that all such firms fall under the
$16.5 million SBA threshold. The low-end estimate
assumes the suppressed firms are not small.
35 US Census Bureau 2022 NAICS Definition.
Available at https://www.census.gov/naics/
?input=71&year=2022&details=713 (accessed Sept.
5, 2023).
36 US Census Bureau 2022 NAICS Definition.
Available at https://www.census.gov/naics/
?input=71&year=2022&details=7139 (accessed Sept.
5, 2023).
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Country Clubs with revenue less than
these amounts were 95 percent and 99
percent. In the IRFA, FMCSA presented
the estimated percent of small entities
using a low-end estimate of 95 percent.
However, the SBA size standard for this
national industry increased from $16.5
million in 2022 to $19 million in 2023,
making the new threshold closer to the
higher of the revenue boundaries.
Therefore, FMCSA has assumed that the
percent of these entities that are small
will be closer to 99 percent and is using
that figure in the FRFA.
Skiing Facilities (713920) industries
primarily operate downhill, cross
country, or related skiing areas, and
provide food and beverage services,
equipment rental, and ski instruction.
The SBA size standard for this national
industry is $35 million, which falls
between two Economic Census revenue
categories, $25 million and $100
million. The percentages of Skiing
Facilities with revenue less than these
amounts were 93 percent and 98
percent.37 Because the SBA threshold is
closer to the lower of these two
boundaries, FMCSA has assumed that
the percent of these facilities that are
small will be closer to 93 percent and
is using that figure.
The Agency estimates that the
majority of entities affected by this Final
Rule would fall under the All Other
Amusement Recreation Industries
(713990) national industry. This
includes whitewater rafting, hunting,
horseback riding stables, boating clubs,
canoeing, archery and shooting ranges,
hiking, and others. The SBA size
standard for this national industry is $9
million. The $9 million SBA threshold
falls between two Economic Census
revenue categories, $5 million and $10
million. The percentages of these
providers with revenue less than these
amounts were 60 percent and 99.6
percent. The Agency estimates a wide
range in estimates due to limitations in
Economic Census data for this NAICS
category. Specifically, of the 12,688
firms in this industry, 12,631 have
revenue between $100,000 and $10
million. However, data on small entities
with revenue under $250,000 are
suppressed. There are 7,490 small
entities (59 percent) with revenue
between $250,000 and $5 million, and
139 firms with revenue between $5
million and $10 million (1.1 percent).
Of the 12,688 firms in All Other
Amusement Recreation Industries, there
are 5,002 firms without revenue data
(39.4 percent). The high-end estimate
assumes all such firms are small (99.6
percent) and FMCSA uses that figure.
Table 7 below shows the complete
estimates of the number of small entities
within the national industries affected
by this rule.
TABLE 7—ESTIMATES OF NUMBERS OF SMALL ENTITIES
NAICS code
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487110
487210
487990
561520
711212
711219
713910
713920
713990
Total number
of firms
Description
...........
...........
...........
...........
...........
...........
...........
...........
...........
Scenic and Sightseeing Transportation, Land ................................................
Scenic and Sightseeing Transportation, Water ..............................................
Scenic and Sightseeing Transportation, Other ...............................................
Tour Operators ................................................................................................
Racetracks ......................................................................................................
Other Spectator Sports ...................................................................................
Golf Courses and Country Clubs ....................................................................
Skiing Facilities ...............................................................................................
All Other Amusement Recreation Industries ..................................................
520
1,129
169
2,175
299
1,916
8,076
203
12,688
Number of
small entities
Percent of all
firms
512
1,097
165
1,991
248
1,577
7,712
189
7,629
98
97
98
92
83
82
99
93
60
D. Assistance for Small Entities
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.
This rule will not result in new
recordkeeping requirements.
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.
Given that the recreational activities
exemption was statutorily mandated,
FMCSA did not have an alternative or
discretion as to whether to adopt the
exemption but did consider whether to
clarify a definition of the term
recreational activities or to remain
silent. FMCSA also considered the
alternative of adding a definition
without including non-exhaustive
examples. However, FMCSA believes
that remaining silent or proposing a
definition without such examples could
result in confusion or inconsistent
enforcement and that it is better to
provide a definition with examples
consistent with the legislative intent to
minimize any significant economic
impact on small entities.
7. Description of steps taken by a
covered agency to minimize costs of
credit for small entities.
FMCSA is not a covered agency as
defined in section 609(d)(2) of the
Regulatory Flexibility Act and has taken
no steps to minimize the additional cost
of credit for small entities.
In accordance with section 213(a) of
the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub.
L. 104–121, 110 Stat. 857), FMCSA
wants to assist small entities in
understanding this final rule so they can
better evaluate its effects on themselves
and participate in the rulemaking
initiative. If the final rule will affect
your small business, organization, or
governmental jurisdiction and you have
questions concerning its provisions or
options for compliance, please consult
the person listed under FOR FURTHER
INFORMATION CONTACT.
Small businesses may send comments
on the actions of Federal employees
who enforce or otherwise determine
compliance with Federal regulations to
the Small Business Administration’s
Small Business and Agriculture
Regulatory Enforcement Ombudsman
(Office of the National Ombudsman, see
37 The Agency presents a high-end estimate of 98
percent which includes assumptions about
limitations in Economic Census data. Some revenue
data for firms that would be considered small
(revenue categories of $100,000 or more and
$250,000 to $499,999) are suppressed by the
Economic Census. Because the Agency is unable to
ascertain the revenue for the suppressed firms, the
high-end estimate assumes that all such firms fall
under the $35 million SBA threshold. The low-end
estimate assumes the suppressed firms are not
small.
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https://www.sba.gov/about-sba/
oversight-advocacy/office-nationalombudsman) 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 regarding the rights of small
entities to regulatory enforcement
fairness and an explicit policy against
retaliation for exercising these rights.
E. Unfunded Mandates Reform Act of
1995
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) (UMRA)
requires Federal agencies to assess the
effects of their discretionary regulatory
actions. The Act addresses actions that
may result in the expenditure by a State,
local, or Tribal government, in the
aggregate, or by the private sector of
$192 million (which is the value
equivalent of $100 million in 1995,
adjusted for inflation to 2022 levels) or
more in any 1 year. Though this final
rule would not result in such an
expenditure, and the analytical
requirements of UMRA do not apply as
a result, the Agency discusses the effects
of this rule elsewhere in this preamble.
F. Paperwork Reduction Act
This final rule contains no new
information collection requirements
under the Paperwork Reduction Act of
1995 (44 U.S.C. 3501–3520).
G. E.O. 13132 (Federalism)
I. E.O. 13175 (Indian Tribal
Governments)
This rule does not have Tribal
implications under E.O. 13175,
Consultation and Coordination with
Indian Tribal Governments, because it
does not have a substantial direct effect
on one or more Indian Tribes, on the
relationship between the Federal
Government and Indian Tribes, or on
the distribution of power and
responsibilities between the Federal
Government and Indian Tribes.
The Consolidated Appropriations Act,
2005,38 requires the Agency to assess
the privacy impact of a regulation that
will affect the privacy of individuals.
This rule would not require the
J. National Environmental Policy Act of
1969
FMCSA analyzed this rule pursuant to
the National Environmental Policy Act
of 1969 (NEPA) (42 U.S.C. 4321 et seq.)
and determined this action is
categorically excluded from further
analysis and documentation in an
environmental assessment or
environmental impact statement under
FMCSA Order 5610.1 (69 FR 9680),
Appendix 2, (6)(b). The categorical
exclusion (CE) in paragraph (6)(b)
covers regulations which are editorial or
procedural, such as those updating
addresses or establishing application
procedures, and procedures for acting
on petitions for waivers, exemptions
and reconsiderations, including
technical or other minor amendments to
existing FMCSA regulations. The
requirements in this rule are covered by
this CE, there are no extraordinary
circumstances present, and the action
38 Public Law 108–447, 118 Stat. 2809, 3268, note
following 5 U.S.C. 552a (Dec. 4, 2014).
39 Public Law 107–347, sec. 208, 116 Stat. 2899,
2921 (Dec. 17, 2002).
A rule has implications for federalism
under section 1(a) of E.O. 13132 if it has
‘‘substantial direct effects on the States,
on the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government.’’
FMCSA has determined that this rule
will not have substantial direct costs on
or for States, nor would it limit the
policymaking discretion of States.
Nothing in this document preempts any
State law or regulation. Therefore, this
rule does not have sufficient federalism
implications to warrant the preparation
of a Federalism Impact Statement.
H. Privacy
khammond on DSKJM1Z7X2PROD with RULES
collection of personally identifiable
information (PII).
The Privacy Act (5 U.S.C. 552a)
applies only to Federal agencies and any
non-Federal agency that receives
records contained in a system of records
from a Federal agency for use in a
matching program.
The E-Government Act of 2002,39
requires Federal agencies to conduct a
PIA for new or substantially changed
technology that collects, maintains, or
disseminates information in an
identifiable form. No new or
substantially changed technology will
collect, maintain, or disseminate
information as a result of this rule.
Accordingly, FMCSA has not conducted
a PIA.
In addition, the Agency submitted a
Privacy Threshold Assessment (PTA) to
evaluate the risks and effects the
proposed rulemaking might have on
collecting, storing, and sharing
personally identifiable information. The
PTA was adjudicated by DOT’s Chief
Privacy Officer on December 15, 2023.
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13997
does not have the potential to
significantly affect the quality of the
environment.
List of Subjects in 49 CFR Part 372
Agricultural commodities, Buses,
Cooperatives, Freight forwarders, Motor
carriers, Moving of household goods,
Seafood.
Accordingly, FMCSA amends 49 CFR
chapter III, part 372 as follows:
PART 372—EXEMPTIONS,
COMMERCIAL ZONES, AND
TERMINAL AREAS
1. The authority citation for part 372
continues to read as follows:
■
Authority: 49 U.S.C. 13504 and 13506;
Pub. L. 105–178, sec. 4031, 112 Stat. 418; and
49 CFR 1.87.
2. Amend § 372.107 by adding
paragraph (i) to read as follows:
■
§ 372.107
Definitions.
*
*
*
*
*
(i) Recreational activities. The term
‘‘recreational activities’’ means activities
consisting of an outdoor experience or
excursion typically of a physical or
athletic nature which require
transportation for the sole purpose of
moving customers to another location or
locations where the outdoor experience
or excursion will take place and
collecting those customers to transport
them back to the place of initial
boarding or another outpost of the motor
carrier. Recreational activities include
but are not limited to hiking, biking,
horseback riding, canoeing, whitewater
rafting, water trails, tubing, skiing,
snowshoeing, snowmobiling, hunting,
fishing, mountain climbing, swimming,
and off-highway vehicle driving and
riding. The term does not include any
activity:
(1) for which the activity offered or
sold is occurring simultaneously with
the transportation; or
(2) for which the transportation is the
primary service offered for sale.
■ 3. Add § 372.113 to read as follows:
§ 372.113 Providers of recreational
activities.
Transportation by a motor vehicle
designed or used to transport not fewer
than 9, and not more than 15,
passengers (including the driver),
whether operated alone or with a trailer
attached for the transport of recreational
equipment, is exempted from regulation
promulgated pursuant to Part B of Title
49 U.S.C. subtitle IV if:
(a) the motor vehicle is operated by a
person that provides recreational
activities;
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(b) the transportation is provided
within a 150 air-mile radius of the
location at which passengers initially
boarded the motor vehicle at the outset
of the trip; and
(c) in the case of a motor vehicle
transporting passengers over a route
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between a place in a State and a place
in another State, the person operating
the motor vehicle is lawfully providing
transportation of passengers over the
entire route in accordance with
applicable State law.
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Issued under authority delegated in 49 CFR
1.87.
Sue Lawless,
Acting Deputy Administrator.
[FR Doc. 2024–03782 Filed 2–23–24; 8:45 am]
BILLING CODE 4910–EX–P
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]]>Agencies
[Federal Register Volume 89, Number 38 (Monday, February 26, 2024)]
[Rules and Regulations]
[Pages 13984-13998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03782]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Part 372
[Docket No. FMCSA-2023-0007]
RIN 2126-AC57
Exemption From Operating Authority Regulations for Providers of
Recreational Activities
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), Department
of Transportation (DOT).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: FMCSA amends its regulations to implement the statutory
exemption from its operating authority registration requirements for
providers of recreational activities. The exemption applies to motor
carriers operating a motor vehicle designed or used to transport
between 9 and 15 passengers (including the driver), whether operated
alone or with a trailer attached to the transport vehicle, if the motor
vehicle is operated by a person that provides recreational activities
within a 150 air-mile radius of the location at which passengers
initially boarded the motor vehicle at the beginning of the trip. FMCSA
also defines recreational activities to clarify the exemption,
adopting, in response to a comment, a definition modified from that
proposed in the notice of proposed rulemaking (NPRM).
DATES: This final rule is effective April 26, 2024.
Petitions for Reconsideration of this final rule must be submitted
to the FMCSA Administrator no later than March 27, 2024.
FOR FURTHER INFORMATION CONTACT: Mr. Antonio Harris, Registration,
Licensing and Insurance Division, Office of Research and Registration,
FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001; (202) 366-
2964; [email protected]. If you have questions on viewing or
submitting material to the docket, call Dockets Operations at (202)
366-9826.
[[Page 13985]]
SUPPLEMENTARY INFORMATION: FMCSA organizes this final rule as follows:
I. Availability of Rulemaking Documents
II. Executive Summary
A. Purpose and Summary of the Regulatory Action
B. Costs and Benefits
III. Abbreviations
IV. Legal Basis
V. Discussion of Proposed Rulemaking and Comments
A. Proposed Rulemaking
B. Comments and Responses
VI. Changes From the NPRM
VII. Severability
VIII. Section-by-Section Analysis
IX. Regulatory Analyses
A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563
(Improving Regulation and Regulatory Review), E.O. 14094
(Modernizing Regulatory Review), and DOT Regulatory Policies and
Procedures
B. Congressional Review Act
C. Regulatory Flexibility Act
D. Assistance for Small Entities
E. Unfunded Mandates Reform Act of 1995
F. Paperwork Reduction Act
G. E.O. 13132 (Federalism)
H. Privacy
I. E.O. 13175 (Indian Tribal Governments)
J. National Environmental Policy Act of 1969
I. Availability of Rulemaking Documents
To view any documents mentioned as being available in the docket,
go to https://www.regulations.gov/docket/FMCSA-2023-0007/document and
choose the document to review. To view comments, click this final rule,
then click ``Browse Comments.'' If you do not have access to the
internet, you may view the docket online by visiting Dockets Operations
at U.S. Department of Transportation, 1200 New Jersey Avenue SE,
Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays. To be sure someone is there to help
you, please call (202) 366-9317 or (202) 366-9826 before visiting
Dockets Operations.
II. Executive Summary
A. Purpose and Summary of the Regulatory Action
Section 23012 of the Infrastructure Investment and Jobs Act (IIJA)
(Pub. L. 117-58, 135 Stat. 429 (H.R. 3684, Nov. 15, 2021)) amended 49
United States Code (U.S.C.) 13506 by adding, in paragraph (b)(4), a new
exemption from FMCSA's operating authority registration requirements.
FMCSA adds new regulatory text implementing this statutory exemption.
The exemption from operating authority registration applies to motor
carriers operating a motor vehicle designed or used to transport
between 9 and 15 passengers (including the driver), whether operated
alone or with a trailer attached to the transport vehicle, if the motor
vehicle is operated by a person \1\ that provides recreational
activities and the transportation is provided within a 150 air-mile
radius of the location at which passengers initially boarded the motor
vehicle at the outset of the trip.
---------------------------------------------------------------------------
\1\ While the statute refers to a ``person,'' that term can
refer both to an individual or to a motor carrier under the
definitions of that term in 49 U.S.C. 13102(18) and 1 U.S.C. 1.
---------------------------------------------------------------------------
FMCSA also defines recreational activities to clarify the
exemption. The statute, which requires that the motor vehicle be
operated ``by a person that provides recreational activities,'' does
not define recreational activities. The Agency's definition clarifies
the types of recreational activities FMCSA has determined would qualify
for the exemption in 49 U.S.C. 13506(b)(4). FMCSA adopts a definition
of recreational activities consistent with the activities that Congress
outlined in another section of the IIJA that uses this term. Section
11512 of the IIJA provided examples of ``groups representing
recreational activities and interests'' in subsection (c)(4) which
provided some insight as to legislative intent for the term
recreational activities in section 23012. The definition FMCSA adopts
in implementing section 23012 includes activities Congress mentions in
section 11512 and also describes activities that fall outside the
intended scope of the term. This language is intended to illustrate
which activities are within the exemption, based on the intent of
Congress, and to allow sufficient flexibility for analysis of the
term's applicability to activities not specified in the regulation.
B. Costs and Benefits
The cost savings associated with this rulemaking include changes in
paperwork, fees, and insurance costs associated with maintaining for-
hire operating authority. Because there is no pre-existing definition
of recreational activities, motor carriers previously may have been
interpreting their eligibility for the operating authority exemption in
varying ways. Through this rulemaking, there will be increased costs
for motor carriers that inappropriately interpreted their eligibility
for the exemption, and decreased costs for those carriers that now have
clear regulatory language to support use of the exemption. The
differing interpretations by regulated entities and enforcement
officials may have hindered consistent enforcement practices, thereby
impacting business-related decisions in providing transportation for
recreational activities. The clarification in this rule may resolve
possible information asymmetry and enforcement differences by creating
a common understanding between FMCSA and motor carriers. Because this
rule may also lead to an increase in exemption use, it will benefit
carriers by improving the efficiency of their business operations and
increase both consumer and producer surplus.
III. Abbreviations
AOA America Outdoors Association
AWM AWM Associates, LLC
BEA Bureau of Economic Analysis
BLS Bureau of Labor Statistics
CE Categorical Exclusion
CFR Code of Federal Regulations
DOL U.S. Department of Labor
DOT Department of Transportation
E.O. Executive Order
FMCSA Federal Motor Carrier Safety Administration
FMCSRs Federal Motor Carrier Safety Regulations
FR Federal Register
FRFA Final Regulatory Flexibility Analysis
GDP Gross Domestic Product
ICR Information Collection Request
IRFA Initial Regulatory Flexibility Analysis
IIJA Infrastructure Investment and Jobs Act
MCMIS Motor Carrier Management Information System
NAICS North American Industry Classification System
NAMIC National Association of Mutual Insurance Companies
NPRM Notice of Proposed Rulemaking
OEWS Occupational Employment and Wage Statistics
OMB Office of Management and Budget
PIA Privacy Impact Assessment
PTA Privacy Threshold Assessment
RIA Regulatory Impact Analysis
Secretary The Secretary of the Department of Transportation
SBA Small Business Administration
UMRA Unfunded Mandates Reform Act of 1995
URS Unified Registration System
U.S.C. United States Code
USDOT United States Department of Transportation
Vehicle Associations Motorcycle Industry Council, Specialty Vehicle
Institute of America, and Recreational Off-Highway Vehicle
Association
IV. Legal Basis
Section 23012 of the IIJA amended 49 U.S.C. 13506 by adding a new
exemption from the requirement to obtain operating authority
registration for ``providers of recreational activities'' operating
passenger vehicles designed or used to transport between 9 and 15
passengers (including the driver) (see 49 U.S.C. 13506(b)(4)). The
statute, which requires that the motor vehicle be operated ``by a
person that provides recreational activities,'' does not define
[[Page 13986]]
recreational activities. This final rule defines recreational
activities to clarify the exemption's applicability.
Under Title 49, Code of Federal Regulations (CFR) 1.87(a)(5), the
authority of the Secretary of the Department of Transportation (the
Secretary) to carry out the functions relating to the registration
requirements in 49 U.S.C. 13901 and 13902 is delegated to the FMCSA
Administrator. Sections 13901 and 13902 generally require that any
person wishing to provide transportation subject to jurisdiction under
subchapter I of chapter 135 \2\ must be registered as a motor carrier,
defined in 49 U.S.C. 13102(14) as ``a person providing motor vehicle
transportation for compensation.'' The requirements of these sections,
which are enforced under Sec. 392.9a (``Operating authority''), are
the basis for the rules governing applications for operating authority
registration in 49 CFR part 365.
---------------------------------------------------------------------------
\2\ Absent an exemption, the Secretary has jurisdiction over
transportation by motor carrier and the procurement of that
transportation, to the extent that passengers, property, or both,
are transported by motor carrier in interstate commerce (49 U.S.C.
13501). This authority has been delegated to the FMCSA Administrator
under 49 CFR 1.87(a)(3).
---------------------------------------------------------------------------
Under 49 CFR 1.87(a)(3), the authority of the Secretary to carry
out the functions related to the jurisdiction requirements in 49 U.S.C.
13506 is delegated to the FMCSA Administrator. Section 13506 provides
miscellaneous motor carrier transportation exemptions, including the
exemption from operating authority for providers of recreational
activities added by the IIJA. The statutory exemption provided in
section 13506 provides the basis for the regulatory exemption added
under this rule in 49 CFR 372.113, including the definition of
recreational activities added to 49 CFR 372.107.
V. Discussion of Proposed Rulemaking and Comments
A. Proposed Rulemaking
On June 21, 2023, FMCSA published in the Federal Register (Docket
No. FMCSA-2023-0007, 88 FR 40146) an NPRM titled ``Exemption from
Operating Authority Regulations for Providers of Recreational
Activities.'' The NPRM proposed a new Sec. 372.113 that outlines the
exemption from operating authority registration for providers of
recreational activities in 49 U.S.C. 13506(b)(4). This new section
would reflect the statutory language and incorporate the exemption into
the FMCSRs. The NPRM also proposed adding a definition of recreational
activities to Sec. 372.107 which would provide a clear description of
the types of activities that qualify for the exemption in 49 U.S.C.
13506(b)(4). The proposed definition set out the meaning of
recreational activities, provided a non-exhaustive list of included
activities, and identified two types of excluded activities. The NPRM
asked for comments addressing whether the last part of the definition,
excluding certain types of activities, should be retained or removed.
B. Comments and Responses
FMCSA solicited comments concerning the NPRM for 60 days ending
August 21, 2023, and by that date four comments were received. AWM
Associates, LLC (AWM), the National Association of Mutual Insurance
Companies (NAMIC), and a private citizen each submitted a comment, and
a joint comment was submitted by the Motorcycle Industry Council,
Specialty Vehicle Institute of America, and Recreational Off-Highway
Vehicle Association (the ``Vehicle Associations'').
FMCSA did not receive any comments regarding the portion of the
recreational activities definition that excludes certain types of
activities. The exclusions are provided to clarify that certain
activities are exempt activities where the service provided by the
motor carriers mainly focuses on transportation from one location to
another. In such cases, the motor carrier's business is in fact selling
transportation--not providing recreational activities. FMCSA has
received inquiries illustrative of these types of activities. For
example, a bus company offering scheduled route service with multiple
stops would not fall within the exemption merely because one of the
scheduled stops was at or near a water park or a horseback riding
stable. Likewise, motor carriers that advertise and provide alcohol,
music, or other ``party'' activities on board the vehicle as the
principal activity or purpose of the transportation would not be
eligible for the exemption. In these situations, the activity cannot be
completed and has no purpose without the transportation. The
transportation in such circumstances is integral to the activities,
rather than incidental. Accordingly, the definition in Sec. 372.107
explicitly excludes any activity: (1) for which the activity offered or
sold is occurring simultaneously with the transportation; or (2) for
which the transportation is the primary service offered for sale.
AWM
Comment: AWM objected to the creation of an exemption from the
operating authority registration rules for providers of recreational
activities and questioned whether the cost of compliance for providers
of recreational activities under the current regulations is burdensome.
Going beyond the exemption at issue, AWM stated that the FMCSRs are
unclear regarding which motor carriers are required to apply for
operating authority under part 365. AWM also questioned whether the
providers of recreational activities would be required to obtain
operating authority under part 365.
Response: The exemption being added to Sec. 372.113 simply
reflects the statutory language in 49 U.S.C. 13506(b)(4) that is
currently in effect and incorporates the statutory exemption from
operating authority registration into the FMCSRs for convenient
reference. FMCSA is not determining through this rulemaking whether
there should be an exemption from the operating authority registration
rules for providers of recreational activities; that decision was made
by Congress when it passed the IIJA which created a statutory
exemption. FMCSA's role in this rulemaking is to define the term
recreational activities and consider the regulatory and economic
impacts of clarifying the definition. The Agency considers the
objection to the creation of the exemption outside the scope of the
rule and declines to make any changes to the rule based on it.
AWM's comment questions whether the cost of obtaining and
maintaining operating authority is burdensome, and it critiques
portions of the comment from the America Outdoors Association (AOA)
relating to this issue. The AOA comment, which relates to operating
authority for recreational activity providers, predates both the IIJA
and this rule, and AOA submitted it in response to a DOT notice
requesting that the public identify and provide input on the
Department's existing guidance documents that are good candidates for
repeal, replacement, or modification.\3\ The Agency added AOA's comment
to the docket for this rulemaking and cited it in the NPRM in support
of its proposed definition of the term recreational activities.
However, the Agency did not rely on AOA's comment in the regulatory
impact analysis (RIA). The Agency's analysis accounts for the impact of
the statutory exemption, which was enacted after AOA's
[[Page 13987]]
comment was submitted to FMCSA. The Agency's RIA considers the impact
of codifying and clarifying the statutory exemption currently in
effect, whereas AWM's comment is directed towards AOA's comments on
cost and the impact of establishing the exemption as an initial matter.
Therefore, the Agency considers this portion of AWM's comment outside
the scope of the rule and declines to make any changes to the rule
based on it.
---------------------------------------------------------------------------
\3\ AOA's comment was submitted in response to DOT's Notice of
Review of Guidance, 84 FR 1820, Feb. 5, 2019.
---------------------------------------------------------------------------
Regarding the applicability of operating authority requirements in
part 365, 49 U.S.C. 13901 and 13902 generally require that any person
that wishes to provide transportation subject to jurisdiction under
subchapter I of chapter 135 be registered as a motor carrier, defined
in 49 U.S.C. 13102(14) as ``a person providing motor vehicle
transportation for compensation.'' The requirements of these sections,
which are enforced under Sec. 392.9a (``Operating authority''), are
the basis for the rules governing applications for operating authority
registration in 49 CFR part 365. Part 365 states that the rules
governing applications for operating authority apply to motor carriers
of property or passengers.\4\ Congress established the operating
authority registration exemption for providers of recreational
activities carrying 9 to 15 passengers when it passed the IIJA. This
rulemaking seeks only to clarify the statutory exemption by defining
the term recreational activities. This rulemaking does not make any
changes to the operating authority provisions in 49 CFR part 365. The
Agency considers this portion of AWM's comment outside the scope of the
rule and declines to change the rule based on it.
---------------------------------------------------------------------------
\4\ Further explanation of the regulations applicable to
passenger motor carriers is provided in Appendix A to Part 390--
Applicability of the Registration, Financial Responsibility, and
Safety Regulations to Motor Carriers of Passengers.
---------------------------------------------------------------------------
The Vehicle Associations
Comment: The Vehicle Associations generally supported the proposed
exemption but proposed a modification to the definition of recreational
activities. They proposed modifying the definition to state that
recreational activities means motorized and non-motorized activities,
and to add off-highway vehicle driving and riding to the list of
activities expressly included. The Vehicle Associations stated that
this modification is supported by the inclusion of off-highway
motorcycling, all-terrain vehicles, and other off-road motorized
vehicle activities in section 11512 of the IIJA, which is the IIJA
section the Agency cited in the NPRM in support of the proposed
definition. The Vehicle Associations also stated that the modified
definition would be consistent with recreation-related terms defined
elsewhere in Federal statute, as well as lists of recreational
activities provided as examples by Federal land management agencies.
Response: The Agency adopts the Vehicle Associations' proposed
modification in part. The Agency agrees that adding ``off-highway
vehicle driving and riding'' to the non-exhaustive list of covered
activities will help clarify the exemption. As the Vehicle Associations
note, inclusion of these activities is supported by the list of
recreational activities in section 11512 of the IIJA. Although that
section appears in a separate division and title of the IIJA from the
motor carrier safety provisions in Division B, Title III, and does not
conclusively define the scope of the exemption in section 23012, it
does provide some insight into the legislative intent, as explained in
the NPRM. The Agency adopts the addition of ``off-highway vehicle
driving and riding'' to align with that intent. The Agency considers
the other part of the proposed modification, the addition of the phrase
``motorized and non-motorized,'' unnecessary and declines to adopt it.
NAMIC
Comment: NAMIC raised a concern that ``expanding eligibility for an
exemption from federal requirements for insurance coverage . . . could
create confusion for policyholders and may not be administratively
possible for insurers.'' NAMIC raised a further concern that differing
State and Federal requirements for insurance coverage risk confusion
and underinsurance among motor carriers. NAMIC suggested further
investigation into the availability of ``coverage on a monthly basis
and for which coverage can be stopped and started at reasonable notice
periods,'' and whether ``states will permit similar staggering of
insurance coverage for such vehicles.''
Response: As explained in response to AWM's comment, this rule
codifies and clarifies in the CFR an existing statutory exemption from
operating authority requirements. Although operating authority is
linked to insurance through financial responsibility requirements, this
rule does not create or expand any exemption to Federal insurance
requirements more broadly because motor carriers eligible for the
operating authority exemption may still be required to maintain
financial responsibility under other regulations in the FMCSRs (see,
e.g., 49 CFR 387.31(a)). The Agency declines to make any changes to the
final rule based on NAMIC's concern regarding expansion of an exemption
from Federal insurance requirements.
Regarding potential confusion with State insurance requirements,
the Agency believes this rule will alleviate confusion. The rule
provides a definition for recreational activities, consistent with the
Agency's understanding of congressional intent when establishing the
exemption, to create a common understanding among motor carriers and
enforcement officials about the exemption. The rule should clarify the
Federal requirements and has no impact on the applicable State
requirements. The Agency disagrees that the rule increases the risk of
confusion as compared to the statutory exemption in 49 U.S.C.
13506(b)(4) standing alone, and it declines to make any changes to the
exemption based on NAMIC's comment. State insurance requirements are
relevant to two scenarios in the RIA, because a seasonal motor carrier
eligible for the exemption may still have to carry insurance in the
off-season to satisfy State requirements, depending on its particular
circumstances. The Agency has added a statement in the RIA to clarify
that cost impacts will vary depending on State insurance coverage
requirements.
Whether certain insurance policies are available to motor carriers
providing recreational activities eligible for the operating authority
exemption, where such policies offer cost savings to the motor carriers
due to the exemption, is a separate concern from the applicability of
the exemption. Changing the extent of the exemption is outside the
Agency's authority, and the Agency declines to make any changes to the
exemption based on this portion of NAMIC's comment but does consider it
in relation to the RIA for the rule.
In the NPRM, the Agency's RIA included an estimate of potential
insurance cost savings, among other potential cost savings, for
eligible motor carriers.\5\ The Agency requested comments on its
estimates of liability insurance costs and the administrative costs of
researching liability insurance or other financial responsibility
options,
[[Page 13988]]
but the Agency did not receive any comments on this issue. NAMIC
suggested further research into the availability of monthly insurance
coverage options for exemption-eligible motor carriers, but otherwise
the Agency did not receive any data or other information regarding its
insurance cost estimates.
---------------------------------------------------------------------------
\5\ Whether a motor carrier eligible for the operating authority
exemption in this rule sees an impact to their insurance costs as a
result of this rule depends on a number of factors: (1) whether the
motor carrier operates year-round, (2) whether they operate only
seasonally, but maintain year-round insurance coverage to satisfy
other Federal or State requirements, or (3) whether they are already
using the statutory operating authority exemption. Although the
exemption in this rule will not impact the insurance costs for all
carriers, they may realize other benefits such as administrative
cost savings, as described elsewhere in the rule.
---------------------------------------------------------------------------
Based on the information gathered and the Agency's experience
administering the relevant regulations, FMCSA believes it is possible
for a motor carrier providing recreational activities on a seasonal
basis to carry an insurance policy during its operating season,
terminate the policy at the end of the season, and obtain a new policy
at the beginning of its next operating season.\6\ The NPRM RIA used the
forgone insurance premiums in the offseason as an estimate of insurance
cost savings for motor carriers in this scenario. The Agency maintains
that this method provides a reasonable estimate of the potential
insurance cost savings, even though the actual insurance cost savings
realized by motor carriers in this scenario may differ depending on
their specific insurer, policy, location, and other particular
circumstances. The Agency has added a statement in the RIA to clarify
that cost impacts will vary depending on State insurance coverage
requirements and has removed quantified estimates of insurance cost
savings. For further assumptions made on insurance coverage, refer to
the section labeled ``Insurance'' in the RIA.
---------------------------------------------------------------------------
\6\ For example, Progressive offers policyholders the option to
adjust coverage based on seasonal changes (Progressive Commercial
Auto Insurance, available at https://www.progressivecommercial.com/commercial-auto-insurance/ (accessed Sept. 20, 2023)).
---------------------------------------------------------------------------
Comments Outside the Scope of the Rulemaking
Comment: A private citizen objected to the creation of an exemption
from the operating authority registration rules for providers of
recreational activities.
Response: As explained in response to AWM's comment, the exemption
that is being added to Sec. 372.113 reflects the statutory language in
49 U.S.C. 13506(b)(4) and incorporates the statutory exemption into the
FMCSRs. FMCSA is not determining through this rulemaking whether there
should be an exemption from the operating authority registration rules
for providers of recreational activities. The Agency considers this
comment outside the scope of the rule and declines to make any changes
to the rule based on it.
VI. Changes From the NPRM
In response to a comment, FMCSA is changing the definition of
recreational activities in this final rule from that proposed in the
NPRM. The Agency is modifying the definition of recreational activities
in Sec. 372.107 to include off-highway vehicle driving and riding in
the non-exhaustive list of activities provided as examples within the
definition. The Agency is also making a grammatical change to the last
sentence of the definition to give the numbered clauses parallel
structure.
VII. Severability
Congress created an exemption from FMCSA's operating authority
registration rules for ``providers of recreational activities.'' (49
U.S.C. 13506(b)(4)). This final rule adds new regulatory text
implementing this statutory exemption and defines the term recreational
activities. This final rule is meant to operate holistically in
addressing a range of issues necessary to ensure the implementation of
the exemption. However, FMCSA recognizes that certain provisions focus
on unique topics. Therefore, FMCSA finds that the various provisions
within this rule are severable and able to operate functionally if one
or more provisions were rendered null or otherwise eliminated. The
remaining provision or provisions within the rule will continue to
operate functionally if any one or more provisions were invalidated and
any other provision(s) remained. In the event a court were to
invalidate one or more of this final rule's unique provisions, the
remaining provisions should stand, thus allowing this congressionally
mandated exemption to continue to operate.
VIII. Section-by-Section Analysis
This section-by-section analysis describes the proposed changes in
numerical order.
Section 372.107 Definitions
As proposed in the NPRM, FMCSA adds a new paragraph (i), which
defines recreational activities.
Section 372.113 Providers of Recreational Activities
As proposed in the NPRM, FMCSA adds a new Sec. 372.113 to subpart
A of 49 CFR 372. This new section outlines the exemption from operating
authority registration in 49 U.S.C. 13506(b)(4).
IX. Regulatory Analyses
A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O.
13563 (Improving Regulation and Regulatory Review), E.O. 14094
(Modernizing Regulatory Review), and DOT Regulatory Policies and
Procedures
FMCSA has considered the impact of this final rule under E.O. 12866
(58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, E.O. 13563
(76 FR 3821, Jan. 21, 2011), Improving Regulation and Regulatory
Review, and E.O. 14094 (88 FR 21879, Apr. 11, 2023), Modernizing
Regulatory Review. The Office of Information and Regulatory Affairs
within the Office of Management and Budget (OMB) determined that this
final rule is not a significant regulatory action under section 3(f) of
E.O. 12866, as supplemented by E.O. 13563, and does not require an
assessment of potential costs and benefits under section 6(a)(3) of
that order. Accordingly, OMB has not reviewed it under that E.O.
Purpose
This final rule codifies the exemption for providers of
recreational activities in regulation and defines recreational
activities to clarify this exemption by providing a clear description
of what types of recreational activities do and do not qualify for the
exemption in 49 U.S.C. 13506(b)(4). This ensures that providers of
recreational activities are aware of their eligibility for the
exemption from filing for operating authority that FMCSA is adding in
new Sec. 372.113. Specifically, this rule affects motor carriers
operating a motor vehicle designed or used to transport between 9 and
15 passengers (including the driver), whether operated alone or with a
trailer attached to the transport vehicle, if the motor vehicle is
operated by a person that provides recreational activities and the
transportation is provided within a 150 air-mile radius of the location
at which passengers initially boarded the motor vehicle at the outset
of the trip.
This rule provides clarity to both motor carriers and enforcement
officials regarding which carriers qualify for the new exemption in
section 23012 of the IIJA as of November 15, 2021. Because Congress did
not define recreational activities and there is no pre-existing
definition of recreational activities in statute or regulation, FMCSA
is bringing the FMCSRs into alignment with the IIJA's exemption by
adding a new definition of that term. This clarity resolves possible
information asymmetry currently affecting the regulated industry and
enforcement
[[Page 13989]]
officials as to which carriers qualify for the operating authority
exemption.
Baseline
For the purposes of this analysis, the changes in this rule are
compared to the baseline established by section 23012 of the IIJA and
the current requirements for providers of recreational activities under
49 U.S.C. 13901 and 13902 and 49 CFR part 365. As discussed above, the
IIJA created a new exemption from the requirement to obtain FMCSA
operating authority registration for providers of recreational
activities. Accordingly, this exemption has been available to these
motor carriers since the IIJA was enacted on November 15, 2021.
Therefore, the incremental impacts of this rule relative to the
baseline lie in how the affected industry and enforcement officials
have been interpreting the term in the absence of a definition in the
FMCSRs.
Uncertainties
The Agency relies on the Motor Carrier Management Information
System (MCMIS) database to obtain information on commercial motor
carriers subject to the FMCSRs. While MCMIS does contain data on
passenger vehicle size (e.g., weight and capacity) and type, it does
not track industry type, nor whether an operating authority exemption
is applicable. Consequently, the Agency knows neither the magnitude of
the population affected by this rule, nor the degree to which passenger
carriers are currently taking advantage of the exemption. Therefore,
FMCSA estimates how different carriers will be impacted by costs and
benefits on a per-unit basis, depending on their current behavior.
In the NPRM, the Agency invited the public to provide information
to address uncertainty surrounding the size of the affected population
and the frequency of exemption use. While FMCSA did not receive such
information, a comment from AWM provided questions about whether an
exemption from the current requirements for obtaining and maintaining
operating authority was necessary. However, FMCSA is not determining
through this rulemaking whether there should be an exemption from the
operating authority registration rules for providers of recreational
activities. This decision was made by Congress when it passed the IIJA
in 2021, which created a statutory exemption. FMCSA's role in this
rulemaking is only to define the term recreational activities and
consider the impacts of clarifying the exemption. The Agency will
therefore not revise the rule in response to comments outside of that
scope.
Carrier Cost Components
The resulting cost impacts of the definitional clarification in
this rule include changes in paperwork, fees, and insurance costs
associated with maintaining operating authority. Because there is no
pre-existing definition of recreational activities, motor carriers may
be interpreting their eligibility for the operating authority exemption
in varying ways. Depending on current interpretations, this rule will
either increase, decrease, or have no incremental impact on the degree
to which the operating authority exemptions are used relative to the
baseline. Because FMCSA is unable to ascertain how various carriers
interpreted this exemption set forth by section 23012 of the IIJA in
2021, the Agency estimates the impacts of this rule based on four
hypothetical scenarios of exemption use. These four scenarios make use
of the forms and insurance cost analyses set forth below, in advance of
the scenarios.
Forms
Currently, there are several forms that providers of recreational
activities are responsible for submitting to FMCSA in order to maintain
operating authority registration. As detailed later in this analysis,
the use of these forms, as explained in Table 1, may change as a result
of this rule, depending on how the affected carriers are interpreting
this exemption.
Table 1--Forms Currently Used in Maintaining Operating Authority
------------------------------------------------------------------------
Form Affected groups
------------------------------------------------------------------------
Motor Carrier Automobile Bodily Injury Carriers that must provide
and Property Damage Liability proof of liability insurance
Certificate of Insurance (BMC-91 or meeting the minimum levels of
BMC-91X). financial responsibility.
Motor Carrier Records Change (MCSA- Carriers reinstating operating
5889). authority.
Request for Revocation of Authority Carriers voluntarily revoking
Granted (OCE-46). operating authority.
Application for Motor Passenger Carrier Carriers with an existing USDOT
Authority (OP-1(P)). number wishing to expand to an
operation requiring operating
authority.
------------------------------------------------------------------------
Tables 2 and 3 display the paperwork burden of these forms to
private entities and to the Government, respectively. These estimates
are based on the Information Collection Request (ICR) supporting
statements associated with each form. For example, Table 2 shows that
Forms BMC-91 and BMC-91X are estimated to take 10 minutes to complete
by an insurance claims and policy processing clerk at a wage rate \7\
of $39.36, leading to a paperwork burden of $7 (10 minutes x $39.36 =
$7).8 9
---------------------------------------------------------------------------
\7\ DOL, BLS. Occupational Employment and Wage Statistics
(OEWS). National. May 2022. 43-9041 Insurance Claims and Policy
Processing Clerks. Available at https://www.bls.gov/oes/current/oes439041.htm (accessed Sept. 1, 2023).
\8\ This estimate is based on the calculations used in the ICR
titled, ``Financial Responsibility Motor Carriers, Freight
Forwarders and Brokers,'' covered by OMB Control Number 2126-0017.
\9\ The supporting statement for the ``Financial Responsibility
Motor Carriers, Freight Forwarders and Brokers'' ICR estimates
Government costs for Forms BMC-91 and BMC-91X at $0, as they are
filed electronically.
Table 2--Paperwork Costs to Private Sector
[2022$]
----------------------------------------------------------------------------------------------------------------
Hours to
Paperwork Wage submit form Cost per form Filing fee Total cost
----------------------------------------------------------------------------------------------------------------
Forms BMC-91 or BMC-91X by $39.36 0.17 $7 .............. $7
insurance claims processer.....
Form MCSA-5889 by office clerk.. 31.99 0.25 8 $80 88
[[Page 13990]]
Form OCE-46 by office clerk..... 31.99 0.25 8 .............. 8
Form OP-1(P) by office clerk.... 31.99 2 64 300 364
----------------------------------------------------------------------------------------------------------------
Estimates may not total due to rounding.
Table 3--Paperwork Costs to Government
[2023$]
----------------------------------------------------------------------------------------------------------------
GS-9, Step 5 Hours to
Paperwork wage process form Cost per form
----------------------------------------------------------------------------------------------------------------
Form MCSA-5889.................................................. $73.71 0.25 $18
Form OCE-46..................................................... 73.71 0.25 18
Form OP-1(P).................................................... 73.71 6.5 479
----------------------------------------------------------------------------------------------------------------
Estimates may not total due to rounding.
FMCSA computes its estimates of labor costs using data gathered
from several sources. Labor costs comprise wages, fringe benefits, and
overhead. Fringe benefits include paid leave, bonuses and overtime pay,
health and other types of insurance, retirement plans, and legally
required benefits (Social Security, Medicare, unemployment insurance,
and workers compensation insurance). Overhead includes any expenses to
a firm associated with labor that are not part of employees'
compensation; this typically includes many types of fixed costs of
managing a body of employees, such as management and human resource
staff salaries or payroll services. The economic costs of labor to a
firm should include the costs of all forms of compensation and labor-
related expenses. For this analysis, costs of labor to a firm have been
calculated relative to total compensation (base wages, plus fringe
benefits, plus overhead).
The primary source for industry wages is the median hourly wage
data (May 2022) from the U.S. Department of Labor (DOL), Bureau of
Labor Statistics (BLS), Occupational Employment and Wage Statistics
(OEWS).\10\
---------------------------------------------------------------------------
\10\ DOL, BLS. Occupational Employment and Wage Statistics
(OEWS). National. May 2022. Available at: https://www.bls.gov/oes/current/oes_nat.htm (accessed Sept. 1, 2023).
---------------------------------------------------------------------------
BLS does not publish data on fringe benefits for specific
occupations, but it does for the broad industry groups in its Employer
Costs for Employee Compensation release. For office clerk employees,
this analysis uses an average hourly wage of $28.89 and average hourly
benefits of $14.85 for private industry workers in ``transportation and
warehousing'' \11\ to estimate that fringe benefits are equal to 51.4
percent ($14.85 / $28.89) of wages. For insurance claims processors,
this RIA uses an average hourly wage of $37.31 and average hourly
benefits of $18.92 for private industry workers in ``financial
activities'' \12\ to estimate that fringe benefits are equal to 50.7
percent ($18.92 / $37.31) of wages.
---------------------------------------------------------------------------
\11\ DOL, BLS. Table 4: Employer costs for Employee Compensation
for private industry workers by occupation and industry group, Dec
2022. Available at: https://www.bls.gov/news.release/archives/ecec_03172023.htm (accessed Sept. 1, 2023).
\12\ Ibid.
---------------------------------------------------------------------------
For estimating the overhead rates on wages, the Agency used
industry data gathered for the Truck Costing Model developed by the
Upper Great Plains Transportation Institute, North Dakota State
University as a proxy for the overhead cost of employees in the
transportation intermediary and surety and trustee industries.\13\
Research conducted for this model found an average cost of $0.107 per
mile of commercial motor vehicle operation for management and overhead,
and $0.39 per mile for labor, indicating an overhead rate of 27 percent
(27 percent = $0.107 / $0.39, rounded to the nearest whole percent).
---------------------------------------------------------------------------
\13\ Berwick, Farooq. Truck Costing Model for Transportation
Managers. North Dakota State University. Upper Great Plains
Transportation Institute. August 2003. Appendix A, pp. 42-47.
Available at: https://www.ugpti.org/resources/reports/downloads/mpc03-152.pdf (accessed Jan. 5, 2024).
---------------------------------------------------------------------------
It is assumed that FMCSA reviewers will be Federal government
employees located in the Washington, DC region at the GS-9 Step 5 wage
rate.\14\ OPM does not publish annual rates that include fringe
benefits or overhead. OMB does publish an object class analysis of the
budget of the U.S. Government. The Object Class Analysis estimates
that, in 2021, DOT spent $6,351 million in employee compensation and
$2,840 million in employee benefits. FMCSA estimates a fringe benefit
rate of 45 percent ($2,840 / $6,351) for FMCSA personnel. FMCSA uses
the DOT Volpe Center overhead rate of 64 percent for Federal
personnel.\15\ The Volpe Center is a Federal fee-for-service research
and innovation center in the DOT. Unlike most Federal agencies, Volpe
receives no direct appropriation from Congress and must cover direct
and indirect expenses through agreements with project
sponsors.16 17 These indirect costs are recovered through
the overhead rate charged on direct labor costs. Volpe employees are
compensated according to the Federal locality pay tables used for all
Federal employees and their labor costs include the same employee
benefits. Therefore, FMCSA believes that the overhead rate for Volpe
personnel is similar to the rate for all DOT personnel.
---------------------------------------------------------------------------
\14\ OPM Pay & Leave Salaries & Wages. Salary Table 2023-DCB,
Hourly Basic (B) Rates by Grade and Step. Available at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/23Tables/html/DCB_h.aspx (accessed Sept. 5, 2023).
\15\ DOT, Volpe Center. Volpe Project Costs. Available at:
https://www.volpe.dot.gov/work-with-us/volpe-project-costs (accessed
Jan. 4, 2024).
\16\ DOT, Volpe Center. How to Initiate Work. Available at:
https://www.volpe.dot.gov/work-with-us/how-initiate-work (accessed
Jan. 4, 2024).
\17\ DOT, Volpe Center. Volpe Project Costs. Available at:
https://www.volpe.dot.gov/work-with-us/volpe-project-costs (accessed
Jan. 4, 2024).
---------------------------------------------------------------------------
[[Page 13991]]
Insurance
In addition to submitting forms to FMCSA, providers of recreational
activities wishing to maintain a valid operating authority registration
must also have proof of liability insurance filed with FMCSA. The
Agency estimates that such liability insurance currently costs entities
an average of $190 per month for one vehicle, or $2,280 per year ($190
x 12 = $2,280).\18\ Using a range of fleet sizes for illustrative
purposes, Table 4 presents the estimated costs currently associated
with maintaining liability insurance by fleet size.
---------------------------------------------------------------------------
\18\ Insuranks Online Insurance Comparison Marketplace. https://www.insuranks.com/commercial-van-insurance (accessed Sept. 12,
2023). These estimates are quoted from 12 different insurance
companies, including Geico, Progressive, State Farm, and others. The
monthly quotes were summed and then divided by 12 to obtain an
estimated monthly average for the industry: ($115 + $120 + $130 +
$183 + $165 + $180 + $195 + $210 + $221 + $232 + $254 + $270) / 12 =
$190.
Table 4--Current Insurance Estimates by Fleet Size
[2022$]
----------------------------------------------------------------------------------------------------------------
Number of vehicles in fleet Monthly premium Yearly premium
----------------------------------------------------------------------------------------------------------------
1............................................................. $190 $2,280
5............................................................. 950 11,400
10............................................................ 1,900 22,800
----------------------------------------------------------------------------------------------------------------
Exemption Use Scenarios for Analyzing Carrier Costs
The following four scenarios build on the forms and insurance cost
analyses detailed above and examine how the impact of this rule on
carrier costs may vary under different exemption use conditions. The
scenarios are an increase in exemption use by carriers, a decrease in
exemption use by carriers, no change in exemption use, and exemption
use by new carriers entering the industry.
Scenario One: Increase in Exemption Use
Scenario One includes providers of recreational activities that
have been eligible for the operating authority exemption established by
section 23012 of the IIJA in 2021 but are not utilizing it due to the
definitional ambiguity of recreational activities. If there are such
carriers, after publication of this final rule they will understand
they are classified as providers of recreational activities and are,
therefore, eligible for this exemption. This would lead to an
incremental increase in the number of operational authority exemptions
being used relative to the baseline. As explained in detail below,
these carriers will be impacted in different ways by the following
costs and cost savings: financial responsibility compliance costs,
operating authority registration fees, and paperwork costs.
Carriers under Scenario One that are currently maintaining their
operating authority registration year-round would experience cost
savings associated with maintaining financial responsibility. In the
NPRM, the Agency invited the public to provide additional information
on the scenarios presented in the RIA, and the estimated insurance
premiums. While no data were provided on these estimates, NAMIC
suggested that the Agency further research the availability of
insurance policies that provide coverage on a monthly basis, and
whether States would permit similar staggering of required insurance
coverage.
As detailed above in section V.B. Comments and Responses, based on
the information gathered and the Agency's experience administering the
relevant regulations, FMCSA believes it is possible for a motor carrier
providing recreational activities on a seasonal basis to carry an
insurance policy during its operating season, terminate the policy at
the end of the season, and obtain a new policy at the beginning of its
next operating season.\19\ The Agency declines to make any
modifications to this analysis based on this comment.
---------------------------------------------------------------------------
\19\ For example, Progressive offers policyholders the option to
adjust coverage based on seasonal changes (Progressive Commercial
Auto Insurance, available at https://www.progressivecommercial.com/commercial-auto-insurance/ (accessed Sept. 20, 2023)).
---------------------------------------------------------------------------
Regarding the second part of NAMIC's comment, the Agency concurs
that the degree of insurance cost savings is dependent on several
factors, including other Federal or State insurance requirements. FMCSA
amends this RIA by removing quantified estimates of insurance cost
savings and acknowledging the varying impacts State insurance
requirements will have on the degree of cost savings.
As described above, FMCSA estimates average monthly insurance
premiums of $190 per vehicle. The Agency maintains that certain motor
carriers will experience insurance cost savings; however, the
quantified amount of those savings may be offset by the need to satisfy
other Federal or State insurance requirements. Motor carriers that do
not have to meet other Federal or State insurance requirements would
save on insurance costs during months they are not in operation.
There may also be cost savings as a result of avoided insurance-
related administrative requirements. Currently, carriers must choose an
insurance plan or other acceptable form of financial responsibility,
and have proof filed with FMCSA whenever they apply for or reinstate
operating authority. The Agency estimates that it takes carriers 8
hours to research and identify which insurance company, financial
surety, or bond provider they will use. Assuming this task is performed
by an office clerk, this activity is estimated to cost each carrier
$256 ($31.99 x 8 hours = $256).\20\
---------------------------------------------------------------------------
\20\ DOL, BLS. Occupational Employment and Wage Statistics
(OEWS). National. May 2022. 43-4071 Office Clerks, General.
Available at: https://www.bls.gov/oes/current/oes434071.htm
(accessed Sept. 9, 2023).
---------------------------------------------------------------------------
As displayed in Table 2, carriers under Scenario One were also
required to ensure that their financial responsibility provider submit
Forms BMC-91 or BMC-91X to FMCSA at a cost of $7 per form. These
administrative requirements for insurance were no longer required after
the enactment of the IIJA in 2021; therefore, the definitional
clarification in this rule may lead to cost savings of $256 to the
carrier and $7 to the insurance company.
Some carriers under Scenario One were filing Form OCE-46 to
voluntarily revoke their operating authority registrations during the
off-season months so that they did not need to maintain insurance at
FMCSA's minimum prescribed levels during those months. To resume
operations, the providers were then required to submit Form MCSA-5889
to reinstate their operating authority registrations during the months
when they were operating. As displayed in Tables 2 and 3, it is
estimated to cost $8 to submit Form
[[Page 13992]]
MCSA-5889, plus a fee of $80 to carriers, and $18 in costs to
FMCSA.\21\ Form OCE-46 is also estimated to cost $8 per carrier and $18
for FMCSA processing time.\22\ As a result of this rule, if there are
carriers under this scenario, they would no longer be subject to the
costs associated with submitting Form MCSA-5889 or Form OCE-46.
---------------------------------------------------------------------------
\21\ This estimate is based on the calculations used in the ICR
titled, ``Motor Carrier Records Change Form'' (Form MCSA-5889),
covered by OMB Control Number 2126-0060. The cost of a paper
submission is $7 and the cost of an electronic submission is $0.
\22\ This estimate is based on the calculations used in the ICR
titled ``Request for Revocation of Authority Granted,'' covered by
OMB Control Number 2126-0018.
---------------------------------------------------------------------------
Scenario Two: Decrease in Exemption Use
It is also possible that this rule will limit the use of this
exemption for certain carriers. Because neither FMCSA nor Congress
provided a definition of recreational activities, there may be carriers
that incorrectly believed they are providers of recreational
activities, but upon issuance of this rule, would realize they are not.
These carriers may currently be incorrectly utilizing this exemption
and revoking their operating authority when they were not eligible to
do so. Therefore, if such carriers exist, they may incur a cost of $88
to submit Form MCSA-5889 as a result of this rulemaking for
reinstatement of their operating authority (Table 2). They would also
need to resume paying for financial responsibility in order to maintain
valid operating authority. Illustrative examples of possible insurance-
related costs are displayed in Tables 4 and 5.
Scenario Three: No Incremental Change in Exemption Use
There may also be eligible carriers that correctly interpreted
Congress' intent and have been utilizing the exemption correctly since
the IIJA's enactment. These carriers are not expected to be impacted by
this rule relative to the baseline. They have already gone through the
steps of voluntarily revoking their operating authority with FMCSA, are
maintaining financial responsibility only while in operation, and are
not paying fees or completing paperwork associated with maintaining
operating authority.
Scenario Four: New Providers
This rule may also affect eligible providers considering engaging
in providing recreational activities in the future. If there are new
carriers considering entering this field that were not aware of the
IIJA exemption, they would no longer need to account for the following
costs as a result of this rule: year-round financial responsibility
premiums required by FMCSA, financial responsibility-related
administrative costs, and operating authority fees and paperwork.
Prior to the enactment of the IIJA, new providers of recreational
activities had to submit the ``Application for Motor Passenger Carrier
Authority'' (Form OP-1(P)).\23\ The Agency estimates that this form
costs $64 with a $300 fee for carriers, and $479 in Government costs
(Tables 2 and 3, respectively).\24\ Additionally, as described in the
Financial Responsibility under Scenario One section, the avoided
insurance-related administrative costs would be $7 for insurance
companies and $256 for carriers. An illustrative example of potential
avoided insurance premium costs is presented in Table 5.
---------------------------------------------------------------------------
\23\ Applicants that have never held a USDOT number or any other
registration issued by FMCSA must file the URS online application
(Form MCSA-1) to obtain a USDOT number and register for operating
authority.
\24\ This estimate is based on calculations used in the ICR
titled ``Licensing Applications for Motor Carrier Operating
Authority,'' covered by OMB Control Number 2126-0016.
---------------------------------------------------------------------------
Government Costs
In addition to the cost to carriers analyzed in the four scenarios
above, this rule may have government costs. The changes implemented by
this rule will not require additional training for enforcement
personnel. The Agency expects that the definitional clarification set
forth in this rule will be communicated to FMCSA personnel and the
Agency's State-based enforcement partners through existing means, such
as policy updates and ongoing training. The Agency will be impacted by
the costs and cost savings associated with this rule, as outlined in
Table 3 ($479 for Form OP-1(P), $18 for Form OCE-46 and Form MCSA-
5889).
Benefits
The affected entities are providers of recreational activities that
typically consist of physically demanding outdoor experiences or
excursions that do not have transportation as an integral part of the
activity itself. Overall, the outdoor recreation economy accounted for
1.9 percent ($454 billion) of current-dollar gross domestic product
(GDP) for the nation in 2021.\25\ Hawaii, Montana, Vermont, Alaska, and
Maine are among the States where outdoor recreation as a percent of
that States' GDP ranks the highest. For example, in 2021, outdoor
recreation accounted for $4.4 billion of Hawaii's $91.1 billion overall
GDP, or 4.8 percent--the highest proportion of any State. In terms of
actual levels, the States that produced the highest outdoor recreation
GDP in 2021 were California ($54.7 billion), Florida ($41.9 billion),
and Texas ($37.5 billion).
---------------------------------------------------------------------------
\25\ DOL, Bureau of Economic Analysis (BEA). BEA Data, Special
Topics, Outdoor Recreation Satellite Account, U.S. and States, 2021.
Current release Nov. 9, 2022. Available at https://www.bea.gov/data/special-topics/outdoor-recreation (accessed Sept 13, 2023).
---------------------------------------------------------------------------
Differences in interpretation between regulated entities and
enforcement officials may be hindering consistent enforcement
practices, thereby impacting business-related decisions in providing
transportation for recreational activities. This rule may resolve this
information asymmetry by creating a common understanding between FMCSA
and motor carriers. Because this rule may also lead to an increase in
exemption use, it will benefit carriers by improving the efficiency of
their business operations and therefore increase both consumer and
producer surplus.
B. Congressional Review Act
This rule is not a major rule as defined under the Congressional
Review Act (5 U.S.C. 801-808).\26\
---------------------------------------------------------------------------
\26\ A major rule means any rule that OMB finds has resulted in
or is likely to result in (a) an annual effect on the economy of
$100 million or more; (b) a major increase in costs or prices for
consumers, individual industries, geographic regions, Federal,
State, or local government agencies; or (c) significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export
markets (5 U.S.C. 802(4)).
---------------------------------------------------------------------------
C. Regulatory Flexibility Act (Small Entities)
The Regulatory Flexibility Act of 1980, Public Law 96-354, 94 Stat.
1164 (5 U.S.C. 601-612), as amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857, March
29, 1996) and the Small Business Jobs Act of 2010 (Pub. L. 111-240, 124
Stat. 2504, September 27, 2010), requires Federal agencies to consider
the effects of the regulatory action on small business and other small
entities and to minimize any significant economic impact. The term
small entities comprises small businesses and not-for-profit
organizations that are independently owned and operated and are not
dominant in their fields, and governmental jurisdictions with
populations of less than 50,000. Accordingly, DOT policy requires an
analysis of the impact of all regulations on small entities, and
mandates that
[[Page 13993]]
agencies strive to lessen any adverse effects on these businesses.
FMCSA has not determined whether this final rule will have a
significant economic impact on a substantial number of small entities.
Therefore, FMCSA prepared an initial regulatory flexibility analysis
(IRFA) for the NPRM and a final regulatory flexibility analysis (FRFA)
for the final rule.
A FRFA must contain the following:
1. A statement of the need for, and objectives of, the rule.
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.
3. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration (SBA) 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.
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.
5. A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of
the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record.
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.
7. Description of steps taken by a covered agency to minimize
costs of credit for small entities.
1. A statement of the need for, and objectives of, the rule.
Section 23012 of the IIJA amended 49 U.S.C. 13506 by adding a new
exemption in paragraph (b)(4) from the operating authority registration
requirements. FMCSA is adding a new regulatory section incorporating
that statutory exemption and also including a definition for the exempt
operations. The exemption from operating authority registration applies
to motor carriers operating a motor vehicle designed or used to
transport between 9 and 15 passengers (including the driver) whether
operated alone or with a trailer attached to the transport vehicle, if
the motor vehicle is operated by a person that provides recreational
activities and the transportation is provided within a 150 air-mile
radius of the location at which passengers initially boarded the motor
vehicle at the outset of the trip. The new statutory exemption did not
include a definition of recreational activities, creating some
ambiguity in the exemption's applicability. The Agency is codifying the
exemption in regulation and removing ambiguity by defining recreational
activities.
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. The Agency received four comments from AWM, NAMIC, the Vehicle
Associations, and a private citizen.
In response to the Vehicle Associations' comment, the Agency is
modifying the definition of recreational activities in Sec. 372.107 to
include off-highway vehicle driving and riding in the non-exhaustive
list of activities provided as examples within the definition. As
detailed in section V. Discussion of Proposed Rulemaking and Comments
of this final rule, the Vehicle Associations proposed modifying
recreational activities to include motorized and non-motorized
activities, such as off-highway vehicle driving and riding. The Agency
adopts the Vehicle Associations' proposed modification in part.
As detailed in paragraph 4 of this FRFA, FMCSA provided a wide
range of North American Industry Classification System (NAICS) codes of
the recreational activities industry in the IRFA, in order to capture
all of the potential sectors that providers of recreational activities
may operate under. The addition of ``off-highway vehicle driving and
riding'' to the list of examples is intended for additional
clarification and will not expand the list of affected NAICS codes that
were estimated in the IRFA, as presented in Table 6.
As described in section IX.A Regulatory Analyses, the Agency's
preliminary RIA included quantified estimates of potential insurance
cost savings, among other potential cost savings, for eligible motor
carriers and the Agency invited the public to provide additional
information on these estimates. While no data were provided as to the
estimated premiums, NAMIC suggested that the Agency further research
the availability of insurance policies that provide coverage on a
monthly basis. The Agency maintains that certain motor carriers may
save on insurance costs as a result of this rule, depending on their
particular circumstances as detailed in section IX.A, but the Agency
removes the quantified estimates of that savings from the RIA.
The Agency concurs that the degree of insurance cost savings is
dependent on several factors, including other Federal or State
insurance requirements. Therefore, FMCSA amends this RIA by removing
quantified estimates of insurance cost savings and acknowledging the
varying impacts State insurance requirements will have on the degree of
cost savings. The quantified amount of those savings may be offset by
the need to satisfy other Federal or State insurance requirements.
Motor carriers that do not have to meet other Federal or State
insurance requirements would save on insurance costs during months they
are not in operation.
The remaining comments from AWM and the private citizen did not
relate to the clarification of the recreational activities exemption.
AWM questioned the magnitude of the burden associated with obtaining
and maintaining operating authority, and the private citizen raised
concerns about effects on public land usage. As detailed in section V.
Discussion of Proposed Rulemaking and Comments, FMCSA is not
determining through this rulemaking whether there should be an
exemption from the operating authority registration rules for providers
of recreational activities. This decision was made by Congress when it
passed the IIJA in 2021, which created a statutory exemption. FMCSA's
scope in this rulemaking is only to define the term recreational
activities and consider the impacts of providing that definition to
clarify the exemption. The Agency considers the objections to the
creation of the exemption outside the scope of the rule and declines to
make any changes to the rule based on them.
3. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the SBA 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 SBA filed no comments to the
proposed rule. Thus, FMCSA has nothing to respond to from the Chief
Counsel for Advocacy of the SBA.
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.
Small entity is defined in 5 U.S.C. 601. Section 601(3) defines a
small entity as having the same meaning as
[[Page 13994]]
small business concern under section 3 of the Small Business Act. This
includes any small business concern that is independently owned and
operated and is not dominant in its field of operation. Section 601(4),
likewise includes within the definition of small entities not-for-
profit enterprises that are independently owned and operated and are
not dominant in their fields of operation. Additionally, section 601(5)
defines small entities as governments of cities, counties, towns,
townships, villages, school districts, or special districts with
populations less than 50,000.
This final rule affects motor carriers operating a motor vehicle
designed or used to transport between 9 and 15 passengers (including
the driver) whether operated alone or with a trailer attached to the
transport vehicle, if the motor vehicle is operated by a person that
provides recreational activities and the transportation is provided
within a 150 air-mile radius of the location at which passengers
initially boarded the motor vehicle at the outset of the trip.
Providers of recreational activities affected by this rule operate
under many different NAICS \27\ codes with differing size standards.
The SBA has released updated small entity size standards since the
publication of the IRFA. The new size standards became effective March
17, 2023.\28\ FMCSA has updated the estimates and size standards in
this FRFA where needed.
---------------------------------------------------------------------------
\27\ More information about NAICS is available at https://www.census.gov/naics (accessed Sept. 13, 2023).
\28\ SBA Table of Small Business Size Standards Matched to NAICS
effective Mar. 17, 2023, located at https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf (accessed Sept. 13, 2023).
---------------------------------------------------------------------------
In the IRFA for the proposed rule, FMCSA provided a wide range of
NAICS codes in the recreational activities industry, in order to
capture all of the potential NAICS codes that providers of recreational
activities may operate under. In doing so, FMCSA highlighted many
entities that perform various other functions beyond transporting
passengers to and from recreational activities. The Agency also
requested public comment on the NAICS codes analyzed in the IRFA but
did not receive any such comments. Therefore, the Agency assumes the
NAICS codes analyzed in the IRFA are representative of the composition
of the affected industries and is retaining those codes for the
purposes of this FRFA.
As shown in Table 6 below, the SBA size standards for providers of
recreational activities range from $9 million in revenue per year for
the All Other Amusement Recreation Industries NAICS national industry,
to $47 million in revenue per year for Racetracks.
Table 6--SBA Size Standards for Selected Industries
[in millions of 2023$]
------------------------------------------------------------------------
SBA size standard
NAICS code NAICS industry description in millions
------------------------------------------------------------------------
Subsector 487--Scenic and Sightseeing Transportation
------------------------------------------------------------------------
487110................... Scenic and Sightseeing $20.5
Transportation, Land.
487210................... Scenic and Sightseeing 14.0
Transportation, Water.
487990................... Scenic and Sightseeing 25.0
Transportation, Other.
------------------------------------------------------------------------
Subsector 561--Administrative and Support Services
------------------------------------------------------------------------
561520................... Tour Operators............ 25.0
------------------------------------------------------------------------
Subsector 711--Performing Arts, Spectator Sports, and Related Industries
------------------------------------------------------------------------
711212................... Racetracks................ 47.0
711219................... Other Spectator Sports.... 16.5
------------------------------------------------------------------------
Subsector 713--Amusement, Gambling, and Recreation Industries
------------------------------------------------------------------------
713910................... Golf Courses and Country 19.0
Clubs.
713920................... Skiing Facilities......... 35.0
713940................... Fitness and Recreational 17.5
Sports Centers.
713990................... All Other Amusement 9.0
Recreation Industries.
------------------------------------------------------------------------
FMCSA examined data from the 2017 Economic Census, the most recent
Census for which data were available, to determine the percentage of
firms that have revenue at or below SBA's thresholds within each of the
NAICS industries.\29\ Boundaries for the revenue categories used in the
Economic Census do not precisely coincide with the SBA thresholds.
Instead, the SBA threshold generally falls between two different
revenue categories. However, FMCSA was able to make reasonable
estimates as to the percent of small entities within each NAICS code.
---------------------------------------------------------------------------
\29\ U.S. Census Bureau. 2017 Economic Census. Available at
https://data.census.gov/cedsci/table?q=EC1700&n=48-49&tid=ECNSIZE2017.EC1700SIZEREVEST&hidePreview=true (accessed Sept.
13, 2023).
---------------------------------------------------------------------------
The Agency estimates that many entities affected by this rule fall
under the Scenic and Sightseeing Transportation NAICS subsector (487).
Firms in this subsector utilize transportation equipment to provide
recreation and entertainment. These operations are distinct from
passenger transportation carried out for other types of for-hire
transportation. The recreational activities involved are local in
nature, usually involving a same-day return to the point of
departure.\30\ Industry groups under this subsector include Scenic and
Sightseeing Transportation, Land (4871), Scenic and Sightseeing
Transportation, Water (4872), and Scenic and Sightseeing
Transportation, Other (4879).
---------------------------------------------------------------------------
\30\ U.S. Census Bureau 2022 NAICS Definition. Available at
https://www.census.gov/naics/?input=48&year=2022&details=487
(accessed Sept. 13, 2023).
---------------------------------------------------------------------------
The Scenic and Sightseeing Transportation, Land NAICS national
industry (487110) has a revenue size standard of $20.5 million, which
falls between two Economic Census revenue
[[Page 13995]]
categories, $10 million and $25 million. This industry comprises firms
engaged in various outdoor excursions, including horse-drawn
sightseeing rides. The percentages of Scenic and Sightseeing
Transportation, Land with revenue less than these amounts ranged from
97 percent to 98 percent. Because the SBA threshold is closer to the
higher of these two boundaries, FMCSA has assumed that the percent of
Scenic and Sightseeing Transportation, Land entities that are small
will be closer to 98 percent and is using that figure.
For Scenic and Sightseeing Transportation, Water (487210), the $14
million SBA threshold falls between two Economic Census revenue
categories, $10 million and $25 million. Entities in this national
industry are primarily engaged in providing scenic and sightseeing
transportation on water, such as fishing boat charter operation. The
percentages of Scenic and Sightseeing Transportation, Water with
revenue less than these amounts ranged from 97 percent to 99 percent.
Because the SBA threshold is closer to the lower of these two
boundaries, FMCSA has assumed that the percent of these entities that
are small will be closer to 97 percent and is using that figure.
Scenic and Sightseeing Transportation, Other (487990) focuses on
all other scenic and sightseeing transportation, such as hot air
balloon rides and glider excursions. The SBA size standard for this
national industry is $25 million. The $25 million SBA threshold falls
between two Economic Census revenue categories, $10 million and $25
million. The percentages of these entities with revenue less than these
amounts were 93 percent and 98 percent. Because the SBA threshold
coincides with the higher of these two boundaries, FMCSA has assumed
that the percent of these providers that are small will be closer to 98
percent and is using that figure.
Firms falling under the Travel Arrangement and Reservation Services
industry group (5615) may also be impacted by this NPRM. This industry
group comprises the Travel Agencies (561510), Tour Operators (561520),
and Convention and Visitors Bureaus (561591) national industries.\31\
The Agency assumes that providers of recreational activities fall under
the Tour Operators national industry.
---------------------------------------------------------------------------
\31\ US Census Bureau 2022 NAICS Definition. Available at
https://www.census.gov/naics/?input=56&year=2022&details=5615
(accessed Sept. 14, 2023).
---------------------------------------------------------------------------
Tour Operators (561520) focuses on arranging and assembling tours,
including travel or wholesale tour operators. The SBA size standard for
this national industry is $25 million, which falls between two Economic
Census revenue categories, $25 million and $100 million. The
percentages of Tour Operators with revenue less than these amounts were
92 percent and 100 percent. The Agency presents a high-end estimate of
100 percent due to limitations in Economic Census data availability.
Revenue data for firms with revenue less than $100,000, which would be
considered small, are suppressed by the Economic Census to avoid
disclosing for individual companies. Because the Agency is unable to
ascertain the revenue for the suppressed firms, the high-end estimate
assumes that all such firms fall under the $25 million SBA threshold
and would be considered small. The low-end estimate assumes the
suppressed firms are not small. Because the SBA threshold is closer to
the lower of these two boundaries, FMCSA has assumed that the percent
of Tour Operators that is small will be closer to 92 percent and is
using that figure.
The Agency estimates that many providers of recreational activities
affected by this NPRM would also fall under the Arts, Entertainment,
and Recreation sector (71). This sector includes a wide range of firms
operating facilities that meet varied cultural, entertainment, and
recreational interests of patrons.\32\ Subsectors under this group
include Performing Arts, Spectator Sports, and Related Industries
(711), Amusement, Gambling, and Recreational Industries (713), and
others.
---------------------------------------------------------------------------
\32\ US Census Bureau 2022 NAICS Definition. Available at
https://www.census.gov/naics/?input=71&year=2022&details=71
(accessed Sept. 5, 2023).
---------------------------------------------------------------------------
The industry groups under the Spectator Sports and Related
Industries (711) subsector cover Spectator Sports (7112). Spectator
Sports includes the Racetracks (711212) and Other Spectator Sports
(711219) national industries.
Racetracks (711212) focuses on firms operating racetracks without
casinos, such as auto, motorcycle, snowmobile, and horse races. The SBA
size standard for this national industry is $47 million. The $47
million SBA threshold falls between two Economic Census revenue
categories, $25 million and $100 million. The percentages of these
entities with revenue less than these amounts were 83 percent and 100
percent.\33\ Because the SBA threshold is closer to the lower of these
two boundaries, FMCSA has assumed that the percent of Racetracks
entities that are small will be closer to 83 percent and is using that
figure.
---------------------------------------------------------------------------
\33\ The Agency presents a high-end estimate of 100 percent due
to limitations in Economic Census data availability. Revenue data
for firms with revenue less than $100,000, which would be considered
small, are suppressed by the Economic Census to avoid disclosing for
individual companies. Because the Agency is unable to ascertain the
revenue for the suppressed firms, the high-end estimate assumes that
all such firms fall under the $47 million SBA threshold. The low-end
estimate assumes the suppressed firms are not small.
---------------------------------------------------------------------------
Other Spectator Sports (711219) focuses on independent athletes,
owners of racing participants (such as cars, dogs, and horses), and
firms engaged in specialized services in support of said participants.
The SBA size standard for this national industry is $16.5 million,
which falls between two Economic Census revenue categories, $10 million
and $25 million. The percentages of these entities with revenue less
than these amounts were 82 percent and 100 percent.\34\ Because the SBA
threshold is closer to the lower of these two boundaries, FMCSA has
assumed that the percent of Other Spectator Sports entities that are
small will be closer to 82 percent and is using that figure.
---------------------------------------------------------------------------
\34\ The Agency presents a high-end estimate of 100 percent due
to limitations in Economic Census data availability. Revenue data
for firms with revenue less than $100,000, which would be considered
small, are suppressed by the Economic Census. Because the Agency is
unable to ascertain the revenue for the suppressed firms, the high-
end estimate assumes that all such firms fall under the $16.5
million SBA threshold. The low-end estimate assumes the suppressed
firms are not small.
---------------------------------------------------------------------------
The industry groups under the Amusement, Gambling, and Recreation
Industries (713) subsector include Amusement Parks and Arcades (7131),
Gambling Industries (7132), and Other Amusement and Recreation
Industries (7139).\35\ The Agency estimates the entities affected by
this NPRM would fall into the third industry group, Other Amusement and
Recreation Industries (7139). This group, as detailed below, covers
firms operating golf courses and country clubs, skiing facilities, and
all other amusement and recreation activities.\36\
---------------------------------------------------------------------------
\35\ US Census Bureau 2022 NAICS Definition. Available at
https://www.census.gov/naics/?input=71&year=2022&details=713
(accessed Sept. 5, 2023).
\36\ US Census Bureau 2022 NAICS Definition. Available at
https://www.census.gov/naics/?input=71&year=2022&details=7139
(accessed Sept. 5, 2023).
---------------------------------------------------------------------------
Entities falling under Golf Courses and Country Clubs (713910)
primarily engage in operating such facilities, and providing food and
beverage services, equipment rental, or golf instruction. The SBA size
standard for this national industry is $19 million, which falls between
two Economic Census revenue categories, $10 million and $25 million.
The percentages of Golf Courses and
[[Page 13996]]
Country Clubs with revenue less than these amounts were 95 percent and
99 percent. In the IRFA, FMCSA presented the estimated percent of small
entities using a low-end estimate of 95 percent. However, the SBA size
standard for this national industry increased from $16.5 million in
2022 to $19 million in 2023, making the new threshold closer to the
higher of the revenue boundaries. Therefore, FMCSA has assumed that the
percent of these entities that are small will be closer to 99 percent
and is using that figure in the FRFA.
Skiing Facilities (713920) industries primarily operate downhill,
cross country, or related skiing areas, and provide food and beverage
services, equipment rental, and ski instruction. The SBA size standard
for this national industry is $35 million, which falls between two
Economic Census revenue categories, $25 million and $100 million. The
percentages of Skiing Facilities with revenue less than these amounts
were 93 percent and 98 percent.\37\ Because the SBA threshold is closer
to the lower of these two boundaries, FMCSA has assumed that the
percent of these facilities that are small will be closer to 93 percent
and is using that figure.
---------------------------------------------------------------------------
\37\ The Agency presents a high-end estimate of 98 percent which
includes assumptions about limitations in Economic Census data. Some
revenue data for firms that would be considered small (revenue
categories of $100,000 or more and $250,000 to $499,999) are
suppressed by the Economic Census. Because the Agency is unable to
ascertain the revenue for the suppressed firms, the high-end
estimate assumes that all such firms fall under the $35 million SBA
threshold. The low-end estimate assumes the suppressed firms are not
small.
---------------------------------------------------------------------------
The Agency estimates that the majority of entities affected by this
Final Rule would fall under the All Other Amusement Recreation
Industries (713990) national industry. This includes whitewater
rafting, hunting, horseback riding stables, boating clubs, canoeing,
archery and shooting ranges, hiking, and others. The SBA size standard
for this national industry is $9 million. The $9 million SBA threshold
falls between two Economic Census revenue categories, $5 million and
$10 million. The percentages of these providers with revenue less than
these amounts were 60 percent and 99.6 percent. The Agency estimates a
wide range in estimates due to limitations in Economic Census data for
this NAICS category. Specifically, of the 12,688 firms in this
industry, 12,631 have revenue between $100,000 and $10 million.
However, data on small entities with revenue under $250,000 are
suppressed. There are 7,490 small entities (59 percent) with revenue
between $250,000 and $5 million, and 139 firms with revenue between $5
million and $10 million (1.1 percent). Of the 12,688 firms in All Other
Amusement Recreation Industries, there are 5,002 firms without revenue
data (39.4 percent). The high-end estimate assumes all such firms are
small (99.6 percent) and FMCSA uses that figure.
Table 7 below shows the complete estimates of the number of small
entities within the national industries affected by this rule.
Table 7--Estimates of Numbers of Small Entities
----------------------------------------------------------------------------------------------------------------
Total number Number of Percent of all
NAICS code Description of firms small entities firms
----------------------------------------------------------------------------------------------------------------
487110........................... Scenic and Sightseeing 520 512 98
Transportation, Land.
487210........................... Scenic and Sightseeing 1,129 1,097 97
Transportation, Water.
487990........................... Scenic and Sightseeing 169 165 98
Transportation, Other.
561520........................... Tour Operators............... 2,175 1,991 92
711212........................... Racetracks................... 299 248 83
711219........................... Other Spectator Sports....... 1,916 1,577 82
713910........................... Golf Courses and Country 8,076 7,712 99
Clubs.
713920........................... Skiing Facilities............ 203 189 93
713990........................... All Other Amusement 12,688 7,629 60
Recreation Industries.
----------------------------------------------------------------------------------------------------------------
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.
This rule will not result in new recordkeeping requirements.
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.
Given that the recreational activities exemption was statutorily
mandated, FMCSA did not have an alternative or discretion as to whether
to adopt the exemption but did consider whether to clarify a definition
of the term recreational activities or to remain silent. FMCSA also
considered the alternative of adding a definition without including
non-exhaustive examples. However, FMCSA believes that remaining silent
or proposing a definition without such examples could result in
confusion or inconsistent enforcement and that it is better to provide
a definition with examples consistent with the legislative intent to
minimize any significant economic impact on small entities.
7. Description of steps taken by a covered agency to minimize costs
of credit for small entities.
FMCSA is not a covered agency as defined in section 609(d)(2) of
the Regulatory Flexibility Act and has taken no steps to minimize the
additional cost of credit for small entities.
D. Assistance for Small Entities
In accordance with section 213(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857),
FMCSA wants to assist small entities in understanding this final rule
so they can better evaluate its effects on themselves and participate
in the rulemaking initiative. If the final rule will affect your small
business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
consult the person listed under FOR FURTHER INFORMATION CONTACT.
Small businesses may send comments on the actions of Federal
employees who enforce or otherwise determine compliance with Federal
regulations to the Small Business Administration's Small Business and
Agriculture Regulatory Enforcement Ombudsman (Office of the National
Ombudsman, see
[[Page 13997]]
https://www.sba.gov/about-sba/oversight-advocacy/office-national-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 regarding the rights of small entities to regulatory enforcement
fairness and an explicit policy against retaliation for exercising
these rights.
E. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
(UMRA) requires Federal agencies to assess the effects of their
discretionary regulatory actions. The Act addresses actions that may
result in the expenditure by a State, local, or Tribal government, in
the aggregate, or by the private sector of $192 million (which is the
value equivalent of $100 million in 1995, adjusted for inflation to
2022 levels) or more in any 1 year. Though this final rule would not
result in such an expenditure, and the analytical requirements of UMRA
do not apply as a result, the Agency discusses the effects of this rule
elsewhere in this preamble.
F. Paperwork Reduction Act
This final rule contains no new information collection requirements
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
G. E.O. 13132 (Federalism)
A rule has implications for federalism under section 1(a) of E.O.
13132 if it has ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.''
FMCSA has determined that this rule will not have substantial
direct costs on or for States, nor would it limit the policymaking
discretion of States. Nothing in this document preempts any State law
or regulation. Therefore, this rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Impact
Statement.
H. Privacy
The Consolidated Appropriations Act, 2005,\38\ requires the Agency
to assess the privacy impact of a regulation that will affect the
privacy of individuals. This rule would not require the collection of
personally identifiable information (PII).
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\38\ Public Law 108-447, 118 Stat. 2809, 3268, note following 5
U.S.C. 552a (Dec. 4, 2014).
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The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies
and any non-Federal agency that receives records contained in a system
of records from a Federal agency for use in a matching program.
The E-Government Act of 2002,\39\ requires Federal agencies to
conduct a PIA for new or substantially changed technology that
collects, maintains, or disseminates information in an identifiable
form. No new or substantially changed technology will collect,
maintain, or disseminate information as a result of this rule.
Accordingly, FMCSA has not conducted a PIA.
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\39\ Public Law 107-347, sec. 208, 116 Stat. 2899, 2921 (Dec.
17, 2002).
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In addition, the Agency submitted a Privacy Threshold Assessment
(PTA) to evaluate the risks and effects the proposed rulemaking might
have on collecting, storing, and sharing personally identifiable
information. The PTA was adjudicated by DOT's Chief Privacy Officer on
December 15, 2023.
I. E.O. 13175 (Indian Tribal Governments)
This rule does not have Tribal implications under E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, because
it does not have a substantial direct effect on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian Tribes.
J. National Environmental Policy Act of 1969
FMCSA analyzed this rule pursuant to the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and determined this
action is categorically excluded from further analysis and
documentation in an environmental assessment or environmental impact
statement under FMCSA Order 5610.1 (69 FR 9680), Appendix 2, (6)(b).
The categorical exclusion (CE) in paragraph (6)(b) covers regulations
which are editorial or procedural, such as those updating addresses or
establishing application procedures, and procedures for acting on
petitions for waivers, exemptions and reconsiderations, including
technical or other minor amendments to existing FMCSA regulations. The
requirements in this rule are covered by this CE, there are no
extraordinary circumstances present, and the action does not have the
potential to significantly affect the quality of the environment.
List of Subjects in 49 CFR Part 372
Agricultural commodities, Buses, Cooperatives, Freight forwarders,
Motor carriers, Moving of household goods, Seafood.
Accordingly, FMCSA amends 49 CFR chapter III, part 372 as follows:
PART 372--EXEMPTIONS, COMMERCIAL ZONES, AND TERMINAL AREAS
0
1. The authority citation for part 372 continues to read as follows:
Authority: 49 U.S.C. 13504 and 13506; Pub. L. 105-178, sec.
4031, 112 Stat. 418; and 49 CFR 1.87.
0
2. Amend Sec. 372.107 by adding paragraph (i) to read as follows:
Sec. 372.107 Definitions.
* * * * *
(i) Recreational activities. The term ``recreational activities''
means activities consisting of an outdoor experience or excursion
typically of a physical or athletic nature which require transportation
for the sole purpose of moving customers to another location or
locations where the outdoor experience or excursion will take place and
collecting those customers to transport them back to the place of
initial boarding or another outpost of the motor carrier. Recreational
activities include but are not limited to hiking, biking, horseback
riding, canoeing, whitewater rafting, water trails, tubing, skiing,
snowshoeing, snowmobiling, hunting, fishing, mountain climbing,
swimming, and off-highway vehicle driving and riding. The term does not
include any activity:
(1) for which the activity offered or sold is occurring
simultaneously with the transportation; or
(2) for which the transportation is the primary service offered for
sale.
0
3. Add Sec. 372.113 to read as follows:
Sec. 372.113 Providers of recreational activities.
Transportation by a motor vehicle designed or used to transport not
fewer than 9, and not more than 15, passengers (including the driver),
whether operated alone or with a trailer attached for the transport of
recreational equipment, is exempted from regulation promulgated
pursuant to Part B of Title 49 U.S.C. subtitle IV if:
(a) the motor vehicle is operated by a person that provides
recreational activities;
[[Page 13998]]
(b) the transportation is provided within a 150 air-mile radius of
the location at which passengers initially boarded the motor vehicle at
the outset of the trip; and
(c) in the case of a motor vehicle transporting passengers over a
route between a place in a State and a place in another State, the
person operating the motor vehicle is lawfully providing transportation
of passengers over the entire route in accordance with applicable State
law.
Issued under authority delegated in 49 CFR 1.87.
Sue Lawless,
Acting Deputy Administrator.
[FR Doc. 2024-03782 Filed 2-23-24; 8:45 am]
BILLING CODE 4910-EX-P
