[Federal Register Volume 87, Number 219 (Tuesday, November 15, 2022)]
[Rules and Regulations]
[Pages 68367-68381]
[FR Doc No: 2022-24089]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 365, 387 and 390

[Docket No. FMCSA-2020-0188]

Applicability of the Registration, Financial Responsibility, and
Safety Regulations to Motor Carriers of Passengers

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

ACTION: Interpretive rule.

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SUMMARY: This interpretive rule adds appendices to the Federal Motor
Carrier Safety Regulations (FMCSRs) to explain existing statutes and
regulations FMCSA administers related to: the applicability of the
FMCSRs, including the financial

responsibility regulations, to motor carriers of passengers operating
in interstate commerce, including limitations on such applicability
based on characteristics of the vehicle operated or the scope of
operations conducted; and the applicability of commercial operating
authority registration based on the Agency's jurisdiction over motor
carriers of passengers, regardless of vehicle characteristics, when
operating for-hire in interstate commerce. Under certain conditions,
motor carriers performing intrastate movements of passengers may still
be operating in interstate commerce and, unless otherwise exempt, are
subject to applicable FMCSA statutory and regulatory requirements.
FMCSA wants motor carriers of passengers and the public to be aware of
the applicable regulations and requirements.

DATES: This interpretive rule is effective November 15, 2022. Comments
on this interpretive rule must be received on or before January 17,
2023.

ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2016-0352 using any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov/docket/FMCSA-2016-0352/document. Follow the online
instructions for submitting comments.
     Mail: Dockets Operations, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: Dockets Operations, U.S.
Department of Transportation, 1200 New Jersey Avenue SE, West Building,
Ground Floor, Room W12-140, 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<PHONE_NUMBER> or (202) 366-
9826 before visiting Dockets Operations.
     Fax:<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Mr. Peter Chandler, Team Leader,
Passenger Carrier Safety Division,<PHONE_NUMBER>,
[email protected]. FMCSA office hours are from 9 a.m. to 5 p.m.,
Monday through Friday, except Federal holidays. If you have questions
on viewing or submitting material to the docket, call Dockets
Operations at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Contents

    FMCSA organizes this interpretive rule as follows:
I. Public Participation and Request for Comments
    A. Submitting Comments
    B. Viewing Comments and Documents
    C. Privacy
II. Abbreviations
III. Background
IV. Legal Basis
V. Discussion
VI. Section-by-Section Analysis
VII. Regulatory Analyses
    A. Regulatory Flexibility Act (Small Entities)
    B. Assistance for Small Entities
    C. Unfunded Mandates Reform Act of 1995
    D. Paperwork Reduction Act (Collection of Information)
    E. E.O. 13132 (Federalism)
    F. Privacy
    G. E.O. 13175 (Indian Tribal Governments)
    H. National Environmental Policy Act of 1969

I. Public Participation and Request for Comments

A. Submitting Comments

    If you submit a comment, please include the docket number for this
interpretive rule (FMCSA-2020-0188), indicate the specific section of
this document to which your comment applies, and provide a reason for
each suggestion or recommendation. You may submit your comments and
material online or by fax, mail, or hand delivery, but please use only
one of these means. FMCSA recommends that you include your name and a
mailing address, an email address, or a phone number in the body of
your document so FMCSA can contact you if there are questions regarding
your submission.
    To submit your comment online, go to https://www.regulations.gov/docket/FMCSA-2020-0188/document, click on this interpretive rule, click
``Comment,'' and type your comment into the text box on the following
screen.
    If you submit your comments by mail or hand delivery, submit them
in an unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. If you submit comments by mail and would
like to know that they reached the facility, please enclose a stamped,
self-addressed postcard or envelope.
    FMCSA will consider all comments and material received during the
comment period.
Confidential Business Information (CBI)
    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (5 United States Code (U.S.C.) 552), CBI is exempt from
public disclosure. If your comments responsive to the interpretive rule
contain commercial or financial information that is customarily treated
as private, that you actually treat as private, and that is relevant or
responsive to the interpretive rule, it is important that you clearly
designate the submitted comments as CBI. Please mark each page of your
submission that constitutes CBI as ``PROPIN'' to indicate it contains
proprietary information. FMCSA will treat such marked submissions as
confidential under the Freedom of Information Act, and they will not be
placed in the public docket of the interpretive rule. Submissions
containing CBI should be sent to Mr. Brian Dahlin, Chief, Regulatory
Evaluation Division, Office of Policy, FMCSA, 1200 New Jersey Avenue
SE, Washington, DC 20590-0001. Any comments FMCSA receives not
specifically designated as CBI will be placed in the public docket for
this rulemaking.

B. Viewing Comments and Documents

    To view any documents mentioned as being available in the docket,
go to https://www.regulations.gov/docket/FMCSA-2020-0188/document and
choose the document to review. To view comments, click this
interpretive rule, then click ``Browse Comments.'' If you do not have
access to the internet, you may view the docket online by visiting
Dockets Operations in Room W12-140 on the ground floor of the DOT West
Building, 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<PHONE_NUMBER> or
(202) 366-9826 before visiting Dockets Operations.

C. Privacy

    In accordance with 49 U.S.C. 31315(b), DOT solicits comments from
the public to better inform its regulatory process. DOT posts these
comments, without edit, including any personal information the
commenter provides, to www.regulations.gov. As described in the system
of records notice DOT/ALL 14 -FDMS, which can be reviewed at https://www.transportation.gov/privacy, the comments are searchable by the name
of the submitter.

II. Abbreviations

APA Administrative Procedure Act
CDL Commercial Driver's License
CMV Commercial Motor Vehicle
CMVSA Commercial Motor Vehicle Safety Act of 1986
DOT Department of Transportation
E.O. Executive Order
FHWA Federal Highway Administration
FMCSA Federal Motor Carrier Safety Administration
FR Federal Register
FMCSRs Federal Motor Carrier Safety Regulations

GVW Gross Vehicle Weight
GVWR Gross Vehicle Weight Rating
ICC Interstate Commerce Commission
ICCTA ICC Termination Act of 1995
IRS Internal Revenue Service
MCSA Motor Carrier Safety Act of 1984
MCSIA Motor Carrier Safety Improvement Act of 1999
OMB Office of Management and Budget
UMRA Unfunded Mandates Reform Act
U.S.C. United States Code

III. Background

    FMCSA employs this interpretive rule to explain the statutes and
regulations the Agency administers and provide guidance on how they
apply to specific sets of facts. An interpretive rule does not alter
the meaning of a regulation.
    Under section 5203(a)(2)(A) and (d) of the Fixing America's Surface
Transportation Act (Pub. L. 114-94, 129 Stat. 1312, 1535, Dec. 4,
2015), documents that provide an interpretation of a regulation must be
published on a publicly accessible internet website of the Department
on the date of issuance. Accordingly, FMCSA will post this interpretive
rule to the FMCSA Guidance Portal at https://www.fmcsa.dot.gov/guidance
and to the Agency's website. It will be reviewed by the Agency no later
than 5 years after it is posted. (See sections 5203(a)(3) and (c)). The
Agency will consider at that time whether the guidance should be
withdrawn, reissued for another period up to 5 years, or incorporated
into the FMCSRs.

IV. Legal Basis

    This interpretive rule explains certain provisions of 49 CFR parts
365, 387, and 390. The statutory basis for those parts is listed in the
authority citation at the end of the table of contents of each part.
The Agency's statutory authority was also discussed in each separate
rule codified in those parts and will not be repeated in detail here.
Under the Administrative Procedure Act (APA), proposed rules generally
must be published in the Federal Register for notice and comment, and
final rules may be made effective not less than 30 days after
publication (5 U.S.C. 553(b) and (d)). Neither of those requirements,
however, applies to interpretive rules (5 U.S.C. 553(b)(A) and (d)(2)).
Although this interpretive rule is effective upon publication, FMCSA
will accept public comments on the issues addressed herein and, where
appropriate, adjust the guidance in response to comments.
    In general, FMCSA's authority is based on the Motor Carrier Act of
1935 (Pub. L. 74-255, 49 Stat. 543, Aug. 9, 1935), as amended (the 1935
Act) (codified in 49 U.S.C. 31502); the Motor Carrier Safety Act of
1984 (Pub. L. 98-554, Title II, 98 Stat. 2832, Oct. 30, 1984), as
amended (MCSA) (codified in 49 U.S.C. chapter 311); the Commercial
Motor Vehicle Safety Act of 1986 (Pub. L. 99-570, Title XII, 100 Stat.
3207-170, Oct. 27, 1986), as amended (CMVSA) (codified in 49 U.S.C.
chapter 313); and the ICC Termination Act of 1995, (Pub. L. 104-88, 109
Stat. 803, Dec. 29, 1995) (ICCTA) (codified in 49 U.S.C. chapters 131-
149).
    With the 1935 Act, the Federal government began to regulate the
operational safety of for-hire carriers of property and passengers and
private carriers of property but not of passengers. The 1935 Act, as
amended, provides that, the Secretary of Transportation may prescribe
requirements for the qualifications and maximum hours of service of
motor carriers and motor private carriers and for the safety of
operation and standards of equipment of such carriers (49 U.S.C.
31502(b)). Under the 1935 Act, as amended, a motor carrier is someone
``providing motor vehicle transportation for compensation'' (49 U.S.C.
13102(14)) and a motor private carrier is someone other than a motor
carrier transporting property by motor vehicle under the conditions
spelled out in 49 U.S.C. 13102(15). Under those conditions, the
transportation must be in interstate commerce; the transporter must be
the owner, lessee, or bailee of the property being transported; and the
property must be transported for sale, lease, rent, or bailment or to
further a commercial enterprise.
    The MCSA restated Federal safety jurisdiction in terms of
commercial motor vehicles (CMVs) operating in interstate commerce but
did not repeal the 1935 Act. The MCSA, as amended, defines a commercial
motor vehicle in 49 U.S.C. 31132(1) as a self-propelled or towed
vehicle used on highways in interstate commerce to transport passengers
or property, if the vehicle meets one or more of the following 4
criteria, i.e., (1) has a gross vehicle weight rating (GVWR) or gross
vehicle weight (GVW) of at least 10,001 pounds, whichever is greater;
(2) is designed or used to transport more than 8 passengers (including
the driver) for compensation; (3) is designed or used to transport more
than 15 passengers (including the driver) but is not used to transport
passengers for compensation; or (4) is used in transporting material
found by the Secretary of Transportation to be hazardous under 49
U.S.C. 5103 and transported in a quantity requiring placarding under
the placarding regulations prescribed under section 5103. This
definition expanded Federal jurisdiction for the first time to include
private motor carriers of passengers.
    The MCSA defines interstate commerce in 49 U.S.C. 31132(4) as
``trade, traffic, or transportation'' in the United States between one
State (1) and a place outside that State (or outside the United
States); or (2) and a different place in the same State when the
transportation passed through another State (or a place outside the
United States). Therefore, an entity operating a CMV in interstate
commerce, unless otherwise exempt, is subject to FMCSA's safety
regulations and oversight.
    The CMVSA created the commercial driver's license (CDL) program.
However, the definition of the term commercial motor vehicle in the
CMVSA is significantly different from the definition of commercial
motor vehicle in the MCSA. The CMVSA's extensive definition of
commercial motor vehicle in 49 U.S.C. 31301(4) is a motor vehicle used
in commerce to transport passengers or property if the vehicle meets
one or more of the following 3 criteria, i.e., (1) has a GVWR or GVW of
at least 26,001 pounds, whichever is greater; \1\ (2) is designed to
transport at least 16 passengers (including the driver); or (3) is used
to transport material found by the Secretary of Transportation to be
hazardous under 49 U.S.C. 5103. However, a vehicle transporting
material found to be hazardous may not be classified as a commercial
motor vehicle if it meets all of the following criteria: (A) the
vehicle's weight is less than the 26,001-pound GVW/GVWR jurisdictional
threshold; (B) the vehicle is transporting material listed as hazardous
under 42 U.S.C. 9656(a) and is not otherwise regulated by the Secretary
or is transporting a consumer commodity or limited quantity of
hazardous material, as defined in 49 CFR 171.8; and (C) the Secretary
does not deny the application of this exception to the vehicle or class
of motor vehicles in the interest of safety.
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    \1\ The Secretary of Transportation is authorized to lower the
jurisdictional threshold of a commercial motor vehicle to 10,001
pounds by regulation, but has not done so.
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    In addition to the higher weight threshold (26,001 pounds compared
to the MCSA's 10,001 pounds), the CMVSA applies to such vehicles
operated in commerce, not just in interstate commerce. It defines
commerce more expansively in 49 U.S.C. 31301(2) as ``trade, traffic,
and transportation'' (1) in the jurisdiction of the United States
between a place in a State and a place outside that State (or

outside the United States), i.e., interstate commerce, or (2) in the
United States that affects trade, traffic, and transportation in
interstate commerce, i.e., intrastate commerce. FMCSA's CDL
regulations, which were issued under the authority in the CMVSA, and
the associated drug and alcohol testing regulations, therefore, apply
to drivers operating CMVs in intrastate as well as interstate commerce.
    The ICCTA transferred much of the authority over the commercial
aspects of motor carrier operations from the former Interstate Commerce
Commission (ICC) to FMCSA. The ICCTA includes a provision, codified at
49 U.S.C. 13902(a)(1), that allows the Secretary of Transportation to
register a person to provide transportation in interstate commerce as a
motor carrier, using self-propelled vehicles that it owns, rents, or
leases, only if the Secretary determines that the person is willing and
able to comply with the requirements of 49 U.S.C. 13902(a)(1)(A The
term motor carrier means a person providing ``motor vehicle
transportation for compensation'' (49 U.S.C. 13102(14). The ICCTA also
included various exemptions from the Secretary's jurisdiction, which
have been minimally modified by subsequent legislation, now codified in
49 U.S.C. 13506. FMCSA uses the term operating authority registration
to refer to the commercial registration in section 13902, replacing the
ICC's term operating authority.
    FMCSA has been delegated the authority to carry out the functions
and exercise the authority vested in the Secretary of Transportation by
the 1935 Act (49 CFR 1.87(i)), the MCSA (49 CFR1.87(f)), the CMVSA (49
CFR 1.87(e)(1)), and the ICCTA (49 CFR 1.87(a)).

V. Discussion

    The FMCSRs comprise parts 350 through 399 of title 49, Code of
Federal Regulations (CFR). These regulations set minimum safety
standards for motor carriers, vehicles, and drivers operating in
interstate commerce (and, in certain cases, in intrastate commerce).
The areas covered include motor carrier registration, financial
responsibility requirements, driver qualifications, licensing, hours of
driving and on duty time, vehicle safety equipment, operating
condition, inspection, and maintenance. The Agency's authority to set
minimum safety standards is based on several different sections of 49
U.S.C. Congress has enacted statutory exemptions for certain categories
of vehicles or operations, and FMCSA has promulgated a number of
regulatory exceptions.
    The Agency's primary safety jurisdiction is dependent on operation
of a CMV in interstate commerce. The operative definition of CMV in the
MCSA, is codified at 49 U.S.C. 31132(1) and adopted into regulation at
Sec. Sec.  390.5T and 390.5. A second CMV definition, based on the
CMVSA and codified at 49 U.S.C. 31301(4) and 49 CFR 383.5, governs the
CDL program and the corresponding drug and alcohol testing requirements
(49 CFR parts 383 and 382, respectively), which apply to CMV operations
both in interstate and intrastate commerce. Finally, those portions of
the FMCSRs based on Part B of Subtitle IV of Title 49, U.S.C., i.e., 49
U.S.C. chapters 131-149, and frequently referred to as the ``commercial
regulations,'' are applicable to (among others) for-hire interstate
transportation of passengers in any vehicle, no matter the weight,
weight rating, or passenger capacity (49 U.S.C. 13102(14), 13902, and
49 CFR part 365). The level of insurance required to operate as a for-
hire passenger carrier is governed by the number of passengers the
vehicle is designed to transport, but certain financial responsibility
filing requirements are dependent on whether the carrier is subject to
the Agency's jurisdiction conferred in 49 U.S.C. 13501 (49 CFR part
387, subpart B).
    Most exemptions from FMCSA's commercial authority are codified in
49 U.S.C. 13506. The exemptions and exceptions involving FMCSA's safety
regulations are codified primarily in 49 CFR 390.3 and 390.3T. FMCSA
adds a new appendix A to part 365, a new appendix A to part 387, and a
new appendix A to part 390 to assist motor carriers and employers in
better understanding which regulations apply to their specific
operations.\2\ FMCSA will conduct outreach to motor carriers and their
associations that are affected by this interpretive rule to confirm
clear communication about applicable FMCSA requirements. FMCSA will
also provide an information resource about applicable FMCSA
requirements. FMCSA will publish this interpretive rule in FMCSA's
regulatory guidance portal at www.fmcsa.dot.gov/guidance.
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    \2\ Appendix A to part 365 and appendix A to part 390 refer to
an August 21, 2001 letter from FMCSA's Acting Deputy Administrator
to the Department of Labor. That letter is included in the docket
for this rulemaking.
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VI. Section-by-Section Analysis

A. Appendix A to Part 365--Applicability of the Registration, Financial
Responsibility, and Safety Regulations to Motor Carriers of Passengers

    FMCSA adds new appendix A to part 365 titled ``Applicability of the
Registration, Financial Responsibility, and Safety Regulations to Motor
Carriers of Passengers.'' This appendix provides a reference to
appendix A to part 390.

B. Appendix A to Part 387--Applicability of the Registration, Financial
Responsibility, and Safety Regulations to Motor Carriers of Passengers

    FMCSA adds new appendix A to part 387 titled ``Applicability of the
Registration, Financial Responsibility, and Safety Regulations to Motor
Carriers of Passengers.'' This appendix provides a reference to
appendix A to part 390.

C. Appendix A to Part 390--Applicability of the Registration, Financial
Responsibility, and Safety Regulations to Motor Carriers of Passengers

    FMCSA adds new appendix A to part 390 titled ``Applicability of the
Registration, Financial Responsibility, and Safety Regulations to Motor
Carriers of Passengers.'' This appendix explains existing statutes and
regulations FMCSA administers related to: the applicability of the
FMCSRs, including the financial responsibility regulations, to motor
carriers of passengers operating in interstate commerce, including
limitations on such applicability based on characteristics of the
vehicle operated or the scope of operations conducted; and the
applicability of commercial operating authority registration based on
the Agency's jurisdiction over motor carriers of passengers, regardless
of vehicle characteristics, when operating for-hire in interstate
commerce.

VII. Regulatory Analyses

A. Regulatory Flexibility Act (Small Entities)

    Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612),
FMCSA is not required to complete a regulatory flexibility analysis
because, as discussed earlier in the Legal Basis section, this action
is not subject to notice and public comment under section 553(b) of the
APA.

B. 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 interpretive rule so they can better evaluate its
effects on themselves and participate in the rulemaking initiative. If
the interpretive 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 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.

C. 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 $178 million (which is the
value equivalent of $100 million in 1995, adjusted for inflation to
2021 levels) or more in any 1 year. Though this interpretive 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
interpretive rule elsewhere in this preamble.

D. Paperwork Reduction Act

    This interpretive rule contains no new information collection
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520).

E. 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 interpretive 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 interpretive rule does not
have sufficient federalism implications to warrant the preparation of a
Federalism Impact Statement.

F. Privacy

    The Consolidated Appropriations Act, 2005 (Pub. L. 108-447, 118
Stat. 2809, 3268, Dec. 8, 2004 (5 U.S.C. 552a note)), requires the
Agency to conduct a privacy impact assessment of a regulation that will
affect the privacy of individuals. Because this interpretive rule does
not require the collection of personally identifiable information, the
Agency is not required to conduct a privacy impact assessment.
    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 (Pub. L. 107-347, sec. 208, 116 Stat.
2899, 2921, Dec. 17, 2002), requires Federal agencies to conduct a
privacy impact assessment 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
interpretive rule. Accordingly, FMCSA has not conducted a privacy
impact assessment.

G. E.O. 13175 (Indian Tribal Governments)

    This interpretive 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.

H. National Environmental Policy Act of 1969

    FMCSA analyzed this interpretive rule pursuant to the National
Environmental Policy Act of 1969 (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,
paragraph 6u. The content in this rule is covered by the categorical
exclusions in paragraph 6.u.(1) (A motor carrier, property broker,
freight forwarder, or its agents, employees, or any other person
subject to the jurisdiction of the FMCSA, has failed to comply with the
provisions or requirements of applicable statutes and the corresponding
regulations) and in paragraph 6.u.(2) (To issue an appropriate order to
compel compliance with the statute or regulation, assess a civil
penalty, or both if such violations are found). In addition, this rule
does not have any effect on the quality of the environment.

List of Subjects

49 CFR Part 365

    Administrative practice and procedure, Brokers, Buses, Freight
forwarders, Maritime carriers, Mexico, Motor carriers, Moving of
household goods.

49 CFR Part 387

    Buses, Freight, Freight forwarders, Hazardous materials
transportation, Highway safety, Insurance, Intergovernmental relations,
Motor carriers, Motor vehicle safety, Moving of household goods,
Penalties, Reporting and recordkeeping requirements, Surety bonds.

49 CFR Part 390

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

    Accordingly, FMCSA amends 49 CFR chapter 3, parts 365, 387, and 390
as follows:

PART 365--RULES GOVERNING APPLICATIONS FOR OPERATING AUTHORITY

0
1. The authority citation for part 365 continues to read as follows:

    Authority: 5 U.S.C. 553 and 559; 49 U.S.C. 13101, 13301, 13901-
13906, 13908, 14708, 31133, 31138, and 31144; 49 CFR 1.87.

0
2. Add appendix A to part 365 to read as follows:

Appendix A to Part 365--Applicability of the Registration, Financial
Responsibility, and Safety Regulations to Motor Carriers of Passengers

    For additional guidance on the application of financial
responsibility regulations to motor carriers of passengers, refer to
appendix A to part 390 of this subchapter.

PART 387--MINIMUM LEVELS OF FINANCIAL RESPONSIBILITY FOR MOTOR
CARRIERS

0
3. The authority citation for part 387 continues to read as follows:

    Authority: 49 U.S.C. 13101, 13301, 13906, 13908, 14701, 31138,
31139; sec. 204(a), Pub. L. 104-88, 109 Stat. 803, 941; and 49 CFR
1.87.

0
4. Add appendix A to part 387 to read as follows:

Appendix A to Part 387--Applicability of the Registration, Financial
Responsibility, and Safety Regulations to Motor Carriers of Passengers

    For additional guidance on the application of financial
responsibility regulations to motor carriers of passengers, refer to
appendix A to part 390 of this subchapter.

PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL

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

    Authority: 49 U.S.C. 113, 504, 508, 31132, 31133, 31134, 31136,
31137, 31144, 31149, 31151, 31502; sec. 114, Pub. L. 103-311, 108
Stat. 1673, 1677; secs. 212 and 217, Pub. L. 106-159, 113 Stat.
1748, 1766, 1767; sec. 229, Pub. L. 106-159 (as added and
transferred by sec. 4115 and amended by secs. 4130-4132, Pub. L.
109-59, 119 Stat. 1144, 1726, 1743, 1744), 113 Stat. 1748, 1773;
sec. 4136, Pub. L. 109-59, 119 Stat. 1144, 1745; secs. 32101(d) and
32934, Pub. L. 112-141, 126 Stat. 405, 778, 830; sec. 2, Pub. L.
113-125, 128 Stat. 1388; secs. 5403, 5518, and 5524, Pub. L. 114-94,
129 Stat. 1312, 1548, 1558, 1560; sec. 2, Pub. L. 115-105, 131 Stat.
2263; and 49 CFR 1.81, 1.81a, 1.87.

0
6. Add appendix A to part 390 to read as follows:

Appendix A to Part 390--Applicability of the Registration, Financial
Responsibility, and Safety Regulations to Motor Carriers of Passengers

I. FMCSA's Jurisdiction

    The Federal Motor Carrier Safety Regulations (FMCSRs) comprise
parts 350 through 399 of title 49, Code of Federal Regulations
(CFR). These regulations set minimum safety standards for motor
carriers, vehicles, and drivers operating in interstate commerce.
The areas covered include motor carrier registration, financial
responsibility requirements, driver qualifications, licensing, hours
of driving and on duty time, vehicle safety equipment, operating
condition, inspection, and maintenance. In some areas, Congress has
enacted exemptions for certain categories of vehicles or operations.
Accordingly, the Agency does not exercise regulatory authority over
some operators who meet the definition of a motor carrier, vehicle,
or driver operating in interstate commerce.
    The jurisdictional thresholds of the statutes FMCSA administers
and the corresponding regulations are not uniform. First, for most
of the FMCSRs, the Agency's jurisdiction is based upon the
definition of commercial motor vehicle (CMV) in the Motor Carrier
Safety Act of 1984 (MCSA), codified at 49 U.S.C. 31132(1) and
Sec. Sec.  390.5T and 390.5. Under that definition, a passenger
vehicle is a commercial motor vehicle if it is designed or used to
transport 9 or more passengers for compensation or 16 or more
passengers regardless of compensation status. Larger passenger
vehicles also qualify as CMVs irrespective of their passenger
capacity if they have a gross vehicle weight (GVW) or gross vehicle
weight rating (GVWR) (whichever is greater) of 10,001 pounds or
more. The Agency's safety jurisdiction, however, does not include
passenger-carrying vehicles that meet all of the following criteria:
(1) designed and used to transport 8 or fewer passengers, (2) have a
GVWR and GVW of 10,000 pounds or less, and (3) are not transporting
hazardous materials in a quantity that requires placarding. If a
passenger-carrying vehicle exceeds even one of these three
thresholds, however, FMCSA has safety jurisdiction over the vehicle.
    A second CMV definition, based on the statutory definition in
the Commercial Motor Vehicle Safety Act of 1986 (CMVSA) codified at
49 U.S.C. 31301(4), governs the commercial driver's license (CDL)
program and the corresponding drug and alcohol testing requirements
(49 CFR parts 383 and 382, respectively), which apply to CMV
operations both in interstate and intrastate commerce. For the
purposes of determining which passenger carrier operations require a
CDL, the jurisdiction conferring commercial motor vehicle definition
in parts 383 and 382 includes any motor vehicle that has a GVWR or
GVW of 26,001 pounds or more and is used to transport passengers,
regardless of the number of passengers that the vehicle is designed
to or actually does transport. This commercial motor vehicle
definition also includes any vehicle designed or used to transport
16 or more passengers, including the driver, and any vehicle used to
transport certain hazardous materials.
    Third, with some exceptions, those portions of the FMCSRs based
on Title 49, Subtitle IV, Part B, and frequently referred to as the
``commercial regulations,'' are applicable (among others) to for-
hire interstate transportation of passengers in any vehicle, no
matter the GVW, GVWR, or passenger capacity (49 U.S.C. 13102(14),
13902 and 49 CFR part 365). The level of insurance required to
operate as a for-hire passenger carrier is governed by the number of
passengers the vehicle is designed to transport (49 CFR part 387,
subpart B). The required level of insurance is $1.5 million if the
carrier's largest vehicle has a seating capacity of 15 or fewer
passengers or $5 million if the largest vehicle has a seating
capacity of 16 passengers or more. (49 CFR 387.33T). These are also
the levels of insurance for which evidence is required to be
maintained on file with FMCSA for a passenger carrier to obtain and
retain for-hire operating authority registration under 49 U.S.C.
13902. There is an exception to some Federal insurance/financial
responsibility requirements for passenger carriers that receive
certain grants from the Federal Transit Administration. (49 U.S.C.
31138(e)(4)).
    To determine the extent to which specific FMCSRs apply to an
operation, it is first necessary to evaluate whether the operations
are within the scope of any of the definitions outlined above. If
the operations are within FMCSA's jurisdiction, then it is necessary
to determine whether any specific regulatory or statutory exemptions
apply to the operation.

II. Jurisdictional Limitations and Exemptions

    There are specific statutory exemptions and regulatory
exceptions applicable to part or all of FMCSA's jurisdiction. Most
exemptions from FMCSA's commercial authority are codified in 49
U.S.C. 13506. Some of these exemptions applicable to passenger
carrier operations are discussed in detail in below. The exemptions
or exceptions from FMCSA's safety regulations are codified primarily
in 49 CFR 390.3 and 390.3T. Specific examples of applicability
questions FMCSA frequently receives are presented in question and
answer format. The Agency's analytical framework is straightforward:
(1) does the operation generally fall within FMCSA's jurisdiction,
and, (2) if so, does any statutory or regulatory exemption or
exception limit the applicability of the FMCSRs?

Transportation of Passengers to and From Airports and Other Points
of Interstate Departure/Arrival

    In 1938, Congress amended section 203(b) of the Motor Carrier
Act of 1935 (1935 Act) to exempt from the requirement to obtain
operating authority registration ``the transportation of persons or
property by motor vehicle when incidental to transportation by
aircraft'' (Civil Aeronautics Act of 1938, Sec. 1107(j), Chap. 601,
52 Stat. 973, 1029, June 23, 1938). Section 203(b)(7a) of the 1935
Act is now codified at 49 U.S.C. 13506(a)(8)(A) and implemented by
49 CFR 372.117(a).
    In 1964, the Interstate Commerce Commission (ICC) reaffirmed its
longstanding position that the exemption for incidental-to-air
transportation did not require passengers to hold a through ticket
when it addressed the following question:

. . . whether the transportation of airline passengers by motor
vehicle which is incidental to transportation by air must be
confined to situations in which the air and motor movements are
provided pursuant to some common arrangement for through passage,
that is, on a through ticket or at the request and at the expense of
the air carrier. In dealing with the transportation of property . .
. we have found that a bona fide terminal area pickup and delivery
service must entail through air-motor billing. A similar condition
has never been considered essential where the transportation of
passengers is concerned, and our reexamination of this aspect of the
overall problem convinces us that no change is warranted in this
regard. . . . Nor do we think that a requirement applicable to the

transportation of freight must necessarily be appropriate to the
transportation of passengers (95 M.C.C. at 535).

FMCSA agrees with the Commission's position that through-ticketing
is not required for the exemption from commercial operating
authority registration for transportation incidental to air travel
in 49 U.S.C. 13506(a)(8)(A) to apply. However, prearranged motor
vehicle transportation, secured by an advance guarantee
demonstrating an obligation by the passenger to take the service,
and by the motor carrier to provide the service immediately prior or
subsequent to aircraft transportation across State lines, is part of
a continuous movement in interstate commerce. This understanding is
the most consistent means for determining the passenger's fixed and
persisting intent to continue in interstate transportation to a
final destination absent a through ticket, or bill of lading one
would have when shipping property. Motor carriers performing
intrastate movements of interstate air passengers thus do not need
operating authority registration if they operate only within the
radius specified as ``incidental to transportation by aircraft'' in
Sec.  372.117(a), but they are nevertheless operating in interstate
commerce and are subject to the FMCSRs unless they are otherwise
exempt.
    The parties who commented on the ICC's passenger rulemaking in
the 1960s reported that ``in virtually no case is it the practice of
the airlines to issue . . . through tickets'' (95 M.C.C. 532). That
has not changed. Package deals combining ground and air
transportation may be offered by travel agents or online ticketing
services, but airlines themselves only rarely offer such
arrangements. FMCSA sees no reason to change the ICC's common-sense
conclusion that motor carriers offering transportation of passengers
to or from an airport are eligible for the exemption in current 49
U.S.C. 13506(a)(8)(A) even though the passengers are not traveling
on a single ticket that includes both ground and aircraft
transportation.
    As discussed below, however, 49 U.S.C. 13506(a)(8)(A) does not
confer an exemption from applicable safety regulations. Prearranged
motor vehicle transportation, secured by an advance guarantee
demonstrating an obligation by the passenger to take the service and
the motor carrier to provide the service, immediately prior or
subsequent to aircraft transportation across State lines is part of
a continuous movement in interstate commerce, as demonstrated by the
passenger's fixed and persisting intent. Motor carriers performing
intrastate movements of interstate air passengers by CMV thus do not
need operating authority registration if they operate only within
the radius specified as ``incidental to transportation by aircraft''
in Sec.  372.117(a), but if the transportation is prearranged, they
are nevertheless operating in interstate commerce and are subject to
the Federal safety regulations unless they are otherwise exempt.

Prearrangement of Passenger Transportation

    The Federal courts have long held that ``[t]he characterization
of transportation between two points within a single state as
interstate or intrastate depends on the essential character of the
shipment involved . . .'' The crucial factor in determining the
essential character of a shipment is `the shipper's fixed and
persisting intent at the time of shipment.' '' Central Freight Lines
v. Interstate Commerce Commission, 899 F.2d 413, 419 (5th Cir. 1990)
(citing, among other cases, Baltimore & O.S.W.R. Co. v. Settle, 260
U.S. 166, 170-71 (1922)); see also Southerland v. St. Croix Taxicab
Ass'n, 315 F.2d 364 (3rd Cir. 1963) (holding that intrastate
transportation of passengers in the Virgin Islands pursuant to
prearranged packages covering both lodging and travel was interstate
commerce). The key inquiry is whether, before or at the time the
trip begins, the shipper has manifested his/her intent to ship
something in interstate commerce. In the case of passenger
transportation, the ``shipper'' is the passenger, and the fixed
intent to travel in interstate commerce is best demonstrated by pre-
arranging the interstate air (or water or rail) transportation and
the intrastate ground transportation by CMV at more or less the same
time, and substantially before the interstate trip begins.
    For example, reserving a seat via the internet, with an advanced
guarantee obligating the passenger to take the service and the motor
carrier to provide the service, in a limousine for transportation to
or from an airport about the same time of booking an interstate
flight that will occur multiple weeks in the future would
demonstrate a fixed and persisting intent to travel in interstate
commerce, placing the limousine segment of the trip in the stream of
interstate commerce. On the other hand, deciding on the day of a
trip to take a taxicab to or from the airport before or after the
flight would not involve prearrangement and would not amount to
interstate commerce. In any case, evidence of a traveler's intent is
normally based on documentation, not assumptions.
    The same kind of analysis applies to passengers boarding or
disembarking from a cruise ship. Prior arrangement of CMV ground
transportation--for example via tour bus from a port of call to some
inland destination--made in conjunction with cruise-ship
reservations would demonstrate the fixed intent of the passenger to
travel by motor vehicle as part of an interstate or international
trip. In some cases, cruise lines may even sell through-tickets that
cover both maritime and land transportation which clearly
demonstrate both prearrangement and the fixed intent of the
travelers to use multiple modes of transportation on an interstate
or international trip.
    In 1963, the Third Circuit held that intrastate transportation
of passengers in the Virgin Islands pursuant to prearranged packages
covering both lodging and travel was interstate commerce
(Southerland v. St. Croix Taxicab Ass'n, 315 F.2d 364 (3rd Cir.
1963)). Federal court decisions have increasingly expanded this line
of analysis and found ground transportation to be in the stream of
interstate commerce where, even in the absence of packaged travel
arrangements, the traveler separately booked the air and ground
portions of a trip. See Abel v. Southern Shuttle Services, Inc., 631
F.3d 1210 (11th Cir. 2011); Executive Town & Country Services v.
City of Atlanta, 789 F.2d 1523 (11th Cir. 1986); Charter Limousine,
Inc. v. Dade County Board of County Commissioners, 678 F.2d 586 (5th
Cir. 1982); East West Resort Transportation, LLC, v. Binz, 494
F.Supp.2d 1197 (D. Col. 2007).
    FMCSA has been asked if its commercial and safety jurisdiction
over a motor carrier of passengers requires some threshold ratio of
interstate to intrastate trips. Many motor carriers have a mixture
of interstate and intrastate passenger transportation operations. To
answer this question, we look back to a case interpreting the Fair
Labor Standards Act of 1938. In this case, only 3 to 4 percent of a
carrier's trips were interstate in nature, and the Supreme Court
held that, under the 1935 Act, the ICC had authority to impose its
hours of service rules on all of the company's drivers because they
were randomly assigned to handle interstate trips, even though 2 out
of about 40 drivers had not made a single interstate trip during the
21 months at issue in that case (Morris v. McComb, 332 U.S. 422
(1947)). The Court said ``[w]e hold that the Commission has the
power to establish qualifications and maximum hours of service,
pursuant to the provisions of Sec.  204 of the Motor Carrier Act [of
1935], for the entire classification of petitioner's drivers and
`mechanics' and it is the existence of that power (rather than the
precise terms of the requirements actually established by the
Commission in the exercise of that power) that Congress has made the
test as to whether or not [the overtime requirement of] Sec.  7 of
the Fair Labor Standards Act is applicable to these employees.''
Ibid. at 434.
    FMCSA's authority over interstate operations under the MCSA is
in most ways even broader than the ICC's authority under the 1935
Act because it includes fewer statutory exemptions and is equally or
more focused on highway safety. The Agency may, therefore, require
compliance with the FMCSRs by passenger carriers with interstate
operations no more extensive than those previously described in
Morris v. McComb, providing those operations are undertaken with
CMVs, as defined in Sec. Sec.  390.5T and 390.5.
    A related question is whether relatively infrequent operations
in interstate commerce make a motor carrier permanently subject to
FMCSA jurisdiction. For an answer, we again look at the 1935 Act and
to Federal Highway Administration (FHWA) precedent. The FHWA,
FMCSA's predecessor agency, said in a 1981 notice of interpretation
that ``[e]vidence of driving in interstate commerce or being subject
to being used in interstate commerce should be accepted as proof
that the driver is subject to [the hours-of-service requirements in
49 U.S.C. 31502(b)] for a 4-month period from the date of the
proof'' 46 FR 37902, 37903 (July 23, 1981).
    FHWA replaced the 4-month rule with a 14/15-day ``rule'' in
1999. (More information about this matter can be found in Question
24 under regulatory guidance for Sec.  390.3 on the FMCSA website,
https://www.fmcsa.dot.gov/regulations/49-cfr-ss-3903t-general-applicability-question-24.) However, the Agency's Acting Deputy

Administrator explained in a letter of August 21, 2001, to the
Department of Labor that ``[t]he 14/15-day rule is a prudential
limitation on the use of FMCSA authority, not an interpretation of
FMCSA jurisdiction.'' The letter also noted that ``[b]ecause most of
the case law interpreting the provisions of the [1935 Act] has been
generated by Fair Labor Standards Act litigation, the courts have
dealt only with agency authority to enforce the hours of service
limits. The [1935 Act], however, authorizes regulations addressing a
wider variety of safety problems, and we believe that the
jurisdictional principles set forth by the courts would apply to
them as well, e.g., to the medical qualifications of drivers.''
    FMCSA takes this occasion to reaffirm the view expressed in the
Acting Deputy Administrator's 2001 letter that the Agency has
jurisdiction over motor carriers, vehicles, and drivers for a 4-
month period after a trip in interstate commerce. However, records
must be retained for whatever period is required by the FMCSRs, even
if that period exceeds 4 months.
    Later in this interpretive rule, FMCSA explains the
applicability of existing statutes and regulations in a question and
answer format to clarify the conditions under which highway
transportation of passengers by CMV within a single State would
constitute interstate commerce if the passengers are beginning a
trip to, or completing a trip from, a point outside the State by
another mode of transportation (e.g., aircraft, railroad, or
vessel). It is FMCSA's legal position for purposes of enforcement
jurisdiction and motor carrier registration requirements, that, if a
passenger plans a trip involving more than one mode of
transportation that begins and ends in different States or a place
outside the United States and has prearranged the CMV portion of the
trip, as demonstrated by an advance guarantee for the service, all
transportation during the trip is in interstate commerce, because
the passenger prearranged the transportation with persistent intent
of continuous interstate movement throughout the trip. Additional
prearranged side trips or excursions made before the trip begins or
while traveling in interstate commerce are included as part of the
flow of interstate commerce. However, if the passenger has made no
arrangement for transportation and upon arriving at an airport,
port, or railway station, makes arrangements for transportation,
that later-arranged transportation is not a continuation of the trip
and is not in interstate commerce. Prearrangement in multimodal
transportation of a passenger is an important consideration in
determining interstate commerce because it can establish the
passenger's intent about travel and provide a clear linkage of
continual transportation segments. When one such segment is
interstate in nature, all linked transportation segments are in the
stream of interstate commerce.

``For Compensation'' and ``For-Hire''

    FMCSA's safety jurisdiction, except in the CDL regulations, is
circumscribed by the definition of commercial motor vehicle in 49
U.S.C. 31132(1). Under section 31132(1), a commercial motor vehicle
is defined, in part, as a vehicle used to transport passengers or
property in interstate commerce that when transporting passengers
has either been designed or is actually used to transport more than
8 passengers and payment is received. The statute also includes in
the commercial motor vehicle definition any passenger carrying
vehicle designed or actually used to transport more than 15
passengers regardless of whether compensation is received. In each
definition, the total number of passengers always includes the
driver. (49 U.S.C. 31132(1)(B)-(C)). Furthermore, a motor carrier
registering for commercial operating authority under 49 U.S.C. 13902
is governed by the definition of motor carrier in 49 U.S.C.
13102(14), i.e., a person providing motor vehicle transportation for
compensation.
    The FMCSRs incorporate ``compensation'' into the definition of
for-hire motor carrier, which the rules treat as ``a person engaged
in the transportation of goods or passengers for compensation''
(Sec. Sec.  390.5T and 390.5). In a notice of interpretation
published on May 7, 1993, FHWA provided an expansive interpretation
of ``compensation,'' stating that compensation includes both direct
and indirect payment. In addition, FHWA said certain nonbusiness
organizations, including churches and charities, operate as for-hire
passenger carriers when they engage in chartered operations,
charging a fee (58 FR 27328, 27329). The notice clarified that
certain businesses, including hotels and car rental agencies
operating shuttle bus services, and outdoor recreation operations
such as whitewater rafting outfits and scuba diving schools
transporting patrons to or from a recreation site, constitute for-
hire motor carriage of passengers. ``Compensation'' as used in the
context of a business enterprise includes both direct and indirect
payment for the transportation service provided. It need not mean
``for profit.''
    This policy was repeated in slightly different form in
regulatory guidance published on November 17, 1993 (58 FR 60734,
60745) and April 4, 1997 (62 FR 16370, 16407). (More information
about this matter can be found in Question 10 under regulatory
guidance for Sec.  390.5 on the FMCSA website, https://www.fmcsa.dot.gov/regulations/does-fmcsa-define-hire-transportation-passengers-same-former-icc-did-0.) This position was also reiterated
in a final rule on private motor carriers of passengers (59 FR 8748,
Feb. 23, 1994), which adopted certain exceptions for ``private motor
carriers of passengers (business)'' (now codified at 49 CFR 391.69)
and ``private motor carriers of passengers (nonbusiness)'' (49 CFR
391.68).
    ``Compensation,'' as used in the definition of for-hire motor
carrier in Sec. Sec.  390.5T and 390.5, includes both direct and
indirect payments. Companies providing intercity motorcoach service
are directly compensated, while hotels, car rental companies,
parking facilities, and other businesses that offer shuttle bus
service are indirectly compensated because they add the cost of that
service to their room rates, car rental rates, etc. By statute, most
taxicab service is not subject to the requirement to obtain
commercial operating authority registration (49 U.S.C. 13506(a)(2))
or to maintain minimum levels of financial responsibility (49 U.S.C.
31138(e)(2), Sec.  387.27(b)(2)). In addition, most taxis are not
subject to the FMCSRs because their designed passenger capacity is
below nine and their GVW is too low to make them CMVs under
Sec. Sec.  390.5T and 390.5.
    Passenger transportation is either for-hire or private. Unless
exempted by statute or regulation, for-hire motor carriers must
obtain operating authority registration under 49 U.S.C. 13902 before
engaging in interstate transportation. While a passenger carrier may
provide both for-hire and private transportation, a specific trip is
either for-hire or private depending upon the presence or absence of
direct or indirect compensation. Though private passenger
transportation is not available to the public at large, for-hire
transportation service may or may not be available to the general
public. Compensation is the primary factor that determines for-hire
transportation. An entity that is nonbusiness, nonprofit, or not-
for-profit, is nevertheless engaged in for-hire passenger
transportation when it receives compensation for such
transportation. Compensation may come in many forms including
donations, gifts, gas money, offerings, etc. received for
transportation. The question of whether an operation is for-hire
should not be conflated, however, with the distinction required to
determine whether a private passenger carrier's operation is
business or non-business. In those cases, the Agency has already
determined that the operation is not for-hire.

Vanpools

    In an interim final rule published on September 3, 1999 (64 FR
48510), FHWA qualified its previous expansive interpretation of
``compensation'' as applied to vanpools. In short, FHWA took the
position that Congress never intended for commuter vanpools arranged
and operated by groups of people trying to get to work, not
attempting to start a commuter transportation side business, to be
subject to federal regulation. Accordingly, FHWA affirmatively
stated that the Agency had no intention to regulate vanpools created
for the convenience of the passengers, not for financial gain in
running a commuter transportation business. Because FHWA considered
the term ``for compensation'' to be equivalent to ``for hire'', the
Agency recognized that payments passengers made into a vanpool to
cover vehicle expenses could be considered compensation subjecting
the vanpool operator to government regulation. FHWA ultimately
decided that as long as funds contributed to the vanpool were not
used as a source of income or to grow a commuter transportation
business, then the operation should not be regulated as a for-hire
motor carrier of passengers. (See 64 FR 48514).
    A few months later, Sec. 212 of the Motor Carrier Safety
Improvement Act of 1999 (MCSIA) (Pub. L. 106-159, 113 Stat.
1748,1766, Dec. 9, 1999) established FMCSA and directed the Agency
to decide whether all motor carriers operating, smaller vehicles
designed or used for 9 to 15 passengers, receiving payment for
transportation should

be covered by all of the FMCSRs. But the statute added another
provision specifically directing FMCSA not to exempt all motor
carrier operations in smaller vehicles, those designed or used for 9
to 15 passengers, for hire when making its decision about the scope
of FMCSR applicability. (113 Stat. 1766). In the preamble of the
notice of proposed rulemaking (NPRM) to implement that mandate,
published on January 11, 2001 (66 FR 2767), FMCSA proposed to focus
on small passenger carriers operating for direct compensation,
stating that these operators were ``identified as having significant
deficiencies in their safety management controls for their drivers
and vehicles'' and pose ``a serious safety risk to the motoring
public'' (66 FR 2768). The final rule reaffirmed this position and
adopted the regulatory changes from the NPRM largely as proposed.
(68 FR 47860, Aug. 12, 2003).
    In view of the varied and sometimes inconsistent \3\ regulatory
guidance on ``compensation'' issued in the past, FMCSA takes this
opportunity to clarify and explain its implementation of the
statutory and regulatory requirements applicable to operations
conducted in vehicles designed or used to transport between 9 and 15
passengers. Pursuant to 49 U.S.C. 31132(1)(B) and (C), a vehicle
designed or used to transport between 9 and 15 passengers (counting
the driver as a passenger) may not be a CMV for purposes of the
FMCSRs unless it is used to transport passengers ``for
compensation'' or has a GVW or GVWR of 10,001 pounds or greater.
Similarly, under 49 U.S.C. 31132(1)(C), a vehicle designed or used
to transport more than 15 passengers (including the driver) is a CMV
even if it is ``not used to transport passengers for compensation.''
The term ``compensation'' is, therefore, jurisdictional. If a
vehicle is designed and used to transport more than 8, but fewer
than 16 passengers, and has a GVW and GVWR of less than 10,001
pounds, without ``compensation,'' it is not a CMV, and FMCSA has no
safety jurisdiction over it.
---------------------------------------------------------------------------

    \3\ Cf. 66 FR 2756, 2761 (final rule revising Sec.  390.3(f)(6),
among other changes) and 66 FR 2767, 2768 (NPRM proposing revisions
to Sec.  390.3(f)(6), among other changes), both Jan. 11, 2001
(providing different interpretations of how direct and indirect
compensation apply to the exception in Sec.  390.3(f)(6)).
---------------------------------------------------------------------------

    This issue is particularly critical for vanpools. Although
payment is compensation, FMCSA decided that the intent of Congress
is not to recognize the money collected in a vanpool as compensation
unless the revenue amount is required to be reported to the Internal
Revenue Service (IRS), pursuant to 26 U.S.C. 1402(b) and 132(f). It
is also important to recognize that although previously
characterized as an exemption in policy and preamble statements,
Congress never promulgated, and the Agency never adopted, a
regulatory exemption for vanpool operations.
    Consistent with prior statements regarding the applicability of
the FMCSRs, and to remain consistent with congressional intent, the
Agency is not changing its position. Therefore, FMCSA will not
pursue enforcement against commuter vanpool operations when all the
following conditions are met: (1) the motor vehicle is operated by
individuals traveling to and from work transporting other
individuals as part of a daily commute to and from work in an
interstate, single daily round trip; (2) the motor vehicle is
designed and used to carry no more than 15 individuals (including
the driver); (3) the GVW and GVWR is less than 10,001 pounds; and
(4) the money received by the vanpool operator for transportation is
not reported to the IRS, pursuant to 26 U.S.C. 1402(b) and 132(f),
or is not deemed reportable by an IRS investigation under the same
provisions.
    FMCSA recognizes that this guidance has compliance implications
for motor carriers that previously considered themselves not subject
to certain Agency requirements because such carriers mistakenly
believed their passenger transportation operations were in
intrastate commerce only, not for-hire, and/or otherwise exempt. It
should be emphasized, however, that while for-hire motor carriers
operating in interstate commerce must obtain both commercial
operating authority registration (no matter how small or light the
vehicle(s) used, unless exempted), and safety registration under 49
U.S.C. 31134,\4\ the safety regulations apply only to motor carriers
(private and for-hire) operating in interstate commerce that use
vehicles that qualify as commercial motor vehicles, as defined in 49
U.S.C. 31132(1) and Sec. Sec.  390.5T and 390.5.
---------------------------------------------------------------------------

    \4\ All initial registrations by new applicants must use the
Unified Registration System online registration application. See
https://portal.fmcsa.dot.gov/UrsRegistrationWizard/.
---------------------------------------------------------------------------

    The following examples show the real-world implications and
interactions of ``interstate commerce,'' ``CMV,'' ``compensation,''
``for-hire,'' and ``private'' carriage, and a variety of regulatory
exemptions and exceptions. These examples are arranged in topical
categories. The first provides guidance on the meaning of
``interstate commerce.'' All subsequent examples provide guidance in
three regulatory applicability contexts, specifically (1) operating
authority registration, (2) minimum level of financial
responsibility, and (3) general safety regulatory jurisdiction.

III. Specific Example Scenarios

    In determining the scope of FMCSA's jurisdiction for each of the
following specific scenarios the analytical framework described
early in this notice is employed. Specifically, for each scenario,
the Agency considered whether the operation falls within FMCSA's
jurisdiction based on the various statutory definitions, and, if so,
whether any statutory or regulatory exemption limits the
applicability of the FMCSRs. Again, should new scenarios arise in
the future, the same analytical framework would be employed to
determine whether a specific operation is subject to FMCSA's
oversight.
    In this section, FMCSA demonstrates the applicability of the
FMCSRs to motor carriers of passengers operating in interstate
commerce by providing example scenarios grouped into six categories
below. Some of the analysis provided in response to these example
scenarios cites to regulatory sections that FMCSA designated as
temporary sections in a final rule published on January 17, 2017 (82
FR 5292). FMCSA notes that, to the extent the language between the
suspended section and the temporary section is substantively the
same, this guidance would also apply to the corresponding language
in the suspended section once the suspension is lifted and the
temporary section is eliminated, just as the pre-existing guidance
for the now-suspended sections was applied to the corresponding
language of the temporary sections that were substantively the same.

Passengers Using Multiple Transportation Modes

    Scenario 1: A couple plans an interstate trip, for vacation.
They hire a limousine to transport them from their residence to an
airport, with a final destination out of state. This highway
transportation is within a single State. The aircraft transports the
couple to another State. After landing and obtaining checked
baggage, the couple boards a mini-bus, which they reserved while
planning the trip from their home, that transports them within the
second State to a waterway port. The couple boards a cruise ship
that transports them to foreign island countries.
    Guidance: This scenario describes for-hire transportation by
motor vehicle as a part of continuous interstate movement. Because
the transportation was prearranged, both the limousine operator and
the mini-bus operator may be required to comply with some if not all
of the FMCSRs. Assuming prearrangement, both operators would require
operating authority registration under 49 CFR part 365, subpart A,
unless the ``incident to air travel'' exemption at 49 U.S.C.
13506(a)(8)(A) and Sec.  372.117(a) applied. (See Scenario 3 below.)
If the vehicles are CMVs under either the MCSA or the CMVSA, then
the respective safety regulations, including the registration and
applicable safety requirements in 49 CFR parts 390 through 399, and/
or the CDL and drug and alcohol testing regulations in parts 382 and
383, would apply to the operations.
    If a passenger plans a trip involving more than one mode of
transportation that begins and ends in different States or a place
outside the United States, and has prearranged the CMV portion of
the trip, secured by an advance guarantee demonstrating an
obligation by the passenger to take the service and the motor
carrier to provide the service, all transportation during the trip
is in interstate commerce because the passenger prearranged the
transportation with fixed and persistent intent of continuous
interstate movement throughout the trip. Additional prearranged side
trips or excursions made before the trip begins or while traveling
in interstate commerce are included as part of the flow of
interstate commerce. However, if the passenger has made no
arrangement for transportation upon arriving at an airport, waterway
port, or railway station, and then makes arrangements for
transportation, that transportation is not a continuation of the
trip and is not in interstate commerce.
    Scenario 2: A company offering sightseeing tours operates buses
designed to transport

more than 15 passengers including the driver. It picks up cruise
ship passengers at a port of call, takes them to nearby attractions,
and returns them to the ship. The bus tour does not cross State
lines, but all cruises originate in another State or foreign
country. The cruise passengers book and pay for the bus tour before
starting, or during, the cruise. The passenger transportation is not
confined to a commercial zone.
    Guidance: This scenario describes for-hire transportation by a
commercial motor vehicle as a part of continuous interstate
movement. FMCSA's position is that the company is a motor carrier
subject to all applicable FMCSRs, including parts 350 through 399,
and it must have registered by following the procedures in 49 CFR
part 365 subpart A and part 390 subpart E. In addition, the company
is operating a CMV, as defined in Sec.  383.5, designed to transport
16 or more passengers. The bus driver must therefore hold a valid
CDL with the applicable endorsement(s) and must comply with the drug
and alcohol testing regulations in part 382.
    In this instance, it is clear that the passengers prearranged
the sightseeing tour and intended to continue in interstate
transportation. Because the company is operating a commercial motor
vehicle, a for-hire passenger vehicle with a seating capacity of at
least 16 in interstate commerce, the company is required under
Sec. Sec.  387.33T and 387.33 to obtain and maintain $5 million of
financial responsibility and to file evidence of the same with
FMCSA.
    Prearranged intrastate highway transportation occurring during
an interstate trip is in the stream of interstate commerce, exactly
like prearranged highway transportation immediately before or after
an interstate trip. The fixed and persistent intent of the cruise
ship passengers to travel by bus as part of the interstate cruise
was demonstrated by their advance booking of the bus tour.
    Scenario 3: While planning a trip, a person goes online, books
an airline flight to a city in another State, and reserves a rental
car in that city. The car rental company is located near the
airport, and it offers shuttle bus service between the terminal and
the facility where its customers can pick up and drop off cars. The
shuttle does not require a reservation. The car rental company
always has at least one shuttle vehicle circulating between the
airport and its parking lot during business hours. All shuttle
vehicles have a GVWR of 10,001 pounds or more and are designed to
transport 16 or more passengers (including the driver). All shuttle
operations are (1) conducted on roads and highways that are open to
public travel, and (2) confined to a zone encompassed by a 25-mile
radius of the boundary of the airport.
    Guidance: This scenario describes for-hire transportation by a
CMV as a part of continuous interstate movement, though limited
exemptions apply. The company operates CMVs, as defined in
Sec. Sec.  390.5T and 390.5, for hire in interstate commerce, and
the company is a motor carrier subject to all applicable FMCSRs,
including parts 350 through 399, and it must register by following
the procedures in 49 CFR part 390 subpart E. In addition, the
company is operating a passenger-carrying CMV designed to transport
16 or more passengers, as defined in Sec.  383.5. The bus driver
must hold a valid CDL with the applicable endorsement(s) and comply
with the drug and alcohol testing regulations in 49 CFR part 382.
    Nonetheless, the company is not required to obtain operating
authority registration. The shuttle service qualifies for the
exemption from operating authority in 49 U.S.C. 13506(a)(8)(A) and
Sec.  372.117(a) for the transportation of passengers by motor
vehicle that is (1) incidental to the transportation by aircraft,
(2) limited to the transportation of passengers who have had or will
have an immediately prior or subsequent movement by air, and (3)
confined to a zone encompassed by a 25-mile radius of the boundary
of the airport. Although the shuttle service, unlike the airline or
rental car reservation, is not explicitly prearranged, it is in the
stream of interstate commerce because customers expect and intend to
utilize the service wherever a rental facility is not within walking
distance of the airport terminal.
    Though operating authority registration is not required, the
company is operating passenger vehicles with a seating capacity of
at least 16 for hire in interstate commerce and, accordingly, is
required under Sec. Sec.  387.33T and 387.33 to maintain $5 million
of financial responsibility.

Hotel Related Passenger Transportation

    Scenario 1: A hotel in Cincinnati, OH offers a courtesy van to
take its guests to and from the Cincinnati/Northern Kentucky
International Airport in KY. The van is designed to transport 15
passengers, including the driver, and has a GVW and GVWR of less
than 10,000 pounds. All passenger transportation occurs within a
zone encompassed by a 25-mile radius of the boundary of the airport.
    Guidance: This scenario describes for-hire transportation by a
CMV as a part of continuous interstate movement, though some
exemptions apply. Though the safety regulations apply to
transportation in a CMV within a single State if the transportation
is a continuation of interstate transportation, the hotel's van
operation is eligible for the limited exception to safety regulation
applicability in Sec. Sec.  390.3T(f)(6) and 390.3(f)(6) based on
the size of the vehicle and how compensation is received. The
hotel's van is designed and used to transport 9 to 15 passengers
(including the driver), and payment for transportation is not
received directly. If the hotel complies with the applicable
provisions listed in Sec. Sec.  390.3T(f)(6) and 390.3(f)(6), then
this passenger transportation is compliant with the safety
regulations contained in 49 CFR parts 350 through 399. Because the
vehicle is a CMV under Sec.  390.5 and the limited exception does
not exempt the hotel from USDOT registration requirements, the hotel
must register by following the procedures in 49 CFR part 390 subpart
E. The hotel's 15-passenger van is not a CMV under Sec.  383.5,
therefore drivers of these vehicles are not required to have CDLs
and are not subject to the drug and alcohol testing regulations in
49 CFR part 382.
    Operating authority registration under 49 CFR part 365, subpart
A, however, is not required. The hotel is providing service subject
to the exemption in 49 U.S.C. 13506(a)(8)(A) and Sec.  372.117(a).
The hotel's shuttle transportation of passengers is (1) incidental
to transportation by aircraft, (2) limited to the transportation of
passengers who have had an immediately prior or will have an
immediately subsequent movement by air, and (3) confined to a zone
encompassed by a 25-mile radius of the boundary of the airport at
which the passengers arrive or depart. The hotel does not meet the
exemption requirements of 49 U.S.C. 13506(a)(3) for a motor vehicle
owned or operated by or for a hotel and only transporting hotel
patrons between the hotel and the ``local station of a carrier.''
The definition of carrier within this exemption means motor carrier,
water carrier and freight forwarder but does not include air
carrier. 49 U.S.C. 13102(3). However, the hotel only needs to meet
the requirements of one exemption to not be subject to operating
authority registration.
    The hotel is providing indirectly compensated, for-hire
transportation of passengers in interstate commerce in a vehicle
with a seating capacity of 15 and is required under Sec. Sec.
387.33T and 387.33 to maintain $1.5 million of financial
responsibility.
    Scenario 2: A hotel in Winchester, VA, located 12 miles outside
of the zone encompassed by a 25-mile radius of the boundary of
Washington Dulles International Airport, offers a courtesy van to
take its guests to and from the airport in Dulles, VA. The van is
designed to transport 15 passengers, including the driver, and has a
GVW and GVWR of less than 10,000 pounds.
    Guidance: This scenario describes for-hire transportation by a
CMV as a part of continuous interstate movement, though some
exemptions apply. Though the hotel is providing interstate
transportation in a CMV, a 9 to 15 passenger vehicle operated for
compensation, the hotel's van operation is eligible for the limited
exception to regulatory applicability in Sec. Sec.  390.3T(f)(6) and
390.3(f)(6).
    This exemption does not relieve the hotel of the requirements in
49 CFR part 365 for operating authority registration. The hotel is
providing interstate for-hire transportation (the costs for
operating the shuttle van are included in the cost of the room, as
an amenity) outside the zone that would qualify it for the
incidental to air travel exemption within 49 U.S.C. 13506(a)(8)(A)
and Sec.  372.117(a). Also, the hotel's transportation does not meet
the exemption requirements of 49 U.S.C. 13506(a)(3) for a motor
vehicle owned or operated by or for a hotel and only transporting
hotel patrons between the hotel and the local station of a carrier.
The definition of carrier applicable to this exemption, at 49 U.S.C.
13102(3), does not include air carrier. The hotel must register by
following the procedures in 49 CFR part 365 subpart A and part 390
subpart E. The hotel is also required under Sec. Sec.  387.33T and
387.33 to obtain, file, and maintain $1.5 million of financial
responsibility.
    The hotel's 15-passenger van is not a CMV under Sec.  383.5.
Therefore, drivers of these

vehicles are not required to have CDLs and are not subject to the
drug and alcohol testing regulations in 49 CFR part 382.

Employer Related Passenger Transportation

    Scenario 1: A commercial building cleaning company owns and
operates 15-passenger vans to transport its employees to client
locations to perform cleaning services. The employer is located
close to a State boundary, and employees are transported into a
neighboring State. When employees are transported outside a
specified distance from the company's single office location, the
employer provides the transportation free of charge. However, when
employees are transported wholly within the specified distance, the
employer charges each employee a transportation fee and deducts that
amount from the employee's pay. Most of this employee transportation
is outside the commercial zone of the municipality where the
company's office is located and where passenger transportation
originates. All of the company's drivers and vehicles are at some
point involved in interstate passenger transportation outside the
commercial zone.
    Guidance: This scenario describes for-hire transportation by a
CMV as a part of continuous interstate movement, though some
exemptions apply. The company is operating 15-passenger vans for
compensation in interstate commerce, satisfying the definition of a
CMV under Sec.  390.5. Accordingly, the company must comply with the
applicable regulations in 49 CFR parts 350 through 399. Because the
employer charges each employee a transportation fee and deducts that
amount from the employee's pay, the compensation is direct, and the
company therefore does not qualify for the limited exception in
Sec. Sec.  390.3T(f)(6) and 390.3(f)(6) for 9 to 15 passenger-
carrying CMVs operated not for direct compensation.
    There are no exemptions to the commercial regulatory
requirements for this interstate, for-hire motor vehicle operation.
The company must register by following the procedures in 49 CFR part
365 subpart A and part 390 subpart E. The company is also required
to obtain, maintain, and file financial responsibility of $1.5
million, as required under Sec. Sec.  387.33T and 387.33.
    The drivers of these 15-passenger vans, however, are not
required to have CDLs and are not subject to employer conducted
controlled substances and alcohol testing because the vehicles are
not CMVs as defined in Sec.  383.5. Although the drivers are not
required to hold a valid CDL, they are subject to the general driver
qualification regulations in part 391, including the requirements to
be medically examined and certified in accordance with Sec. Sec.
391.41, 391.43, and 391.45.
    Scenario 2: A construction company owns and operates a bus
designed to transport more than 15 passengers including the driver.
The bus transports employees to work sites and does not charge a fee
for the transportation. At the request of its employees, the company
uses the bus on a Saturday during the summer to provide round-trip
transportation for interested employees to an amusement park in a
neighboring State. This trip is open only to employees and people
the employees invite. The company collects money from each
passenger. The transportation is not confined within a commercial
zone.
    Guidance: This scenario describes for-hire interstate
transportation by a CMV as defined in Sec. Sec.  390.5T and 390.5.
The transportation is subject to all the applicable regulations in
49 CFR parts 350 through 399. The company must register for
operating authority registration and USDOT number registration by
following the procedures in 49 CFR part 365 subpart A and part 390
subpart E. In addition, the bus is also a CMV as defined in 49 CFR
383.5, and the driver must hold a valid CDL with a Passenger
endorsement and must comply with the drug and alcohol testing
regulations in 49 CFR part 382.
    If the company operates its CMV in interstate commerce only on
rare occasions, FMCSA has jurisdiction over the company, such
vehicle, and the driver of such vehicle for a 4-month period after a
trip in interstate commerce. However, records must be retained for
whatever period is required by the FMCSRs, even if that period
exceeds 4 months.
    Operating authority registration is required in this scenario
only because the construction company provided a trip for
compensation to the amusement park in another State. Operating
authority registration would not be necessary if the company limited
its transportation to the free transportation provided for employees
to travel to work sites.
    Finally, because the company operates passenger vehicles with a
seating capacity of at least 16 in interstate commerce, it must
maintain financial responsibility of at least $5 million, as
required under Sec. Sec.  387.33T and 387.33. As long as the company
is engaged in for-hire operations, evidence of financial
responsibility must be maintained on file with FMCSA.

Education-Related Passenger Transportation

    Scenario 1: A non-profit organization conducts educational tours
with 15-passenger vans. All tours can be booked as part of a
classroom course, or as a stand-alone tour. Each tour crosses either
a State or international border, beyond a commercial zone.
Passengers pay a single, inclusive of transportation fee whether
they book a tour or a tour combined with a classroom lecture. The
15-passenger vans have a GVWR and actual GVW under 10,000 pounds.
    Guidance: This scenario describes for-hire transportation by a
CMV as defined in Sec. Sec.  390.5T and 390.5, as a part of
continuous interstate movement. The vans used by this organization
are CMVs under Sec. Sec.  390.5T and 390.5 because they have a
passenger capacity of more than eight and are used to transport
passengers for compensation in interstate commerce. However, the
organization is eligible for the limited exception to regulatory
applicability in Sec. Sec.  390.3T(f)(6) and 390.3(f)(6) because (1)
the vans are designed or used to transport between 9 and 15
passengers, (2) the organization does not receive direct
compensation, and (3) the vans meet none of the alternative
definitions of a CMV such as a GVW or GVWR of 10,001 pounds or more.
The drivers of these vans do not need CDLs because the vehicles are
not CMVs under Sec.  383.5; both their passenger capacity and weight
are below the applicable thresholds. For the same reasons, the
drivers of these vans are not subject to the drug and alcohol
testing regulations in 49 CFR part 382. The organization must
register by following the procedures in 49 CFR part 365 subpart A
and part 390 subpart E because the operations clearly included
interstate transportation for compensation in a motor vehicle and no
exemptions from FMCSA's commercial regulatory authority apply.
    The organization transports passengers across State lines and
includes the cost of transportation in a flat rate fee. Its non-
profit status is irrelevant. A carrier that receives compensation,
even indirect compensation, is providing for-hire service, and,
because the carrier operates beyond a commercial zone, it must
obtain operating authority registration from FMCSA. This
organization is not a youth or family camp, and the statutory
exemption from operating authority registration for such camps that
provide recreational or educational activities therefore does not
apply. Further, the organization is engaged only in educational
activities. Therefore, the exemption for providers of recreational
activities does not apply.
    Because the organization operates passenger vehicles with a
seating capacity of 15 or fewer for hire in interstate commerce, the
organization is required under Sec. Sec.  387.33T and 387.33 to
obtain, maintain, and file evidence of, $1.5 million of financial
responsibility.
    Scenario 2: A school bus contractor is hired by a school
district to transport high school athletes, faculty, and volunteers
to and from an athletic competition in another State on a single
day. During the following week, the same school bus contractor is
hired by the same school district to transport elementary school
students and faculty to and from a historic site in another State
for an educational tour. The school bus used by the contractor is
designed to transport more than 15 passengers including the driver.
    Guidance: This scenario describes for-hire interstate
transportation by a CMV as defined in Sec. Sec.  390.5T and 390.5,
however, some exemptions may apply. The contractor is not eligible
for the exception for ``school bus operations'' in Sec. Sec.
390.3T(f)(1) and 390.3(f)(1) because the operations are defined in
Sec. Sec.  390.5T and 390.5 as the transportation of school children
and/or personnel ``from home to school and from school to home.'' In
this scenario, the students and faculty gather at the school and are
transported, not from and to home, but from the school premises to
out-of-State venues and then back to the school premises. The school
bus contractor must obtain safety registration and a USDOT number
under 49 U.S.C. 31134. The contractor must register by following the
procedures in 49 CFR part 390 subpart E. In addition, the contractor
is operating a school bus with a passenger capacity of at least 16,
which also meets the definition of CMV under Sec.  383.5. The
drivers of the school buses must therefore hold CDLs with the
applicable endorsements, and the employer

of such drivers must administer a drug and alcohol testing program
in compliance with part 382.
    Although both examples of the school bus contractor's passenger
transportation are for-hire in interstate commerce, the contractor
is not required to obtain operating authority registration. In this
scenario the contractor is engaged in transportation to or from
school, and the transportation is organized, sponsored, and paid for
by the school district. The regulatory exception in Sec.  372.103
and the statutory exemption in 49 U.S.C. 13506(a)(1) both apply to
each type of passenger transportation conducted by the school bus
contractor in this scenario.
    Likewise, the school bus contractor qualifies for the exception
in Sec.  387.27(b)(4) because it is a motor carrier operating under
contract providing transportation of preprimary, primary, and
secondary students for extra-curricular trips organized, sponsored,
and paid for by a school district. Accordingly, the contractor is
not required to comply with Federal financial responsibility
requirements.
    Scenario 3: A private university transports only student
athletes and university employees to games, sometimes in other
States, in university-owned buses, which are designed to transport
more than 15 passengers including the driver. The passenger
transportation is financed by an allotment in the university
athletic department's budget.
    Guidance: This scenario describes interstate transportation by a
CMV as defined in Sec. Sec.  390.5T and 390.5, however, some
exemptions may apply. The private university is a private motor
carrier of passengers (business) operating CMVs, as defined in
Sec. Sec.  390.5T and 390.5, in interstate commerce. The private
university fits within this definition because the financing of
passenger transportation comes from a university budget source, not
from payments or charges for transportation either directly or
embedded in other tuition and fees. The transportation is only
available to students and university employees, not the public at
large. Private universities typically operate as commercial
enterprises, as the passenger transportation to sporting events is
in furtherance of the university's business and are an element of
the institution's operations. Thus, transportation of students and
faculty is in furtherance of its commercial purpose. The possible
absence of ticket sales to sporting event spectators does not affect
the commercial nature of the enterprise.
    Except as noted in the next paragraph, the transportation is
subject to the requirements of 49 CFR parts 350 through 399 relevant
to passenger carrier operations. The university must register by
following the procedures in 49 CFR part 390 subpart E. In addition,
the private university's bus is a CMV as defined in Sec.  383.5, and
the driver must hold a valid CDL with a Passenger endorsement and be
enrolled in a drug and alcohol testing program consistent with 49
CFR part 382.
    There is a regulatory exception in Sec.  391.69, however, from
certain driver qualification requirements relating to applications
for employment, investigations and inquiries, and road tests for
single-employer drivers employed by a private motor carrier of
passengers (business). Additionally, private motor carriers of
passengers (business) may also continue to operate older buses
manufactured before Federal fuel system requirements were adopted,
provided the fuel system is maintained to the original
manufacturer's standards (Sec.  393.67(a)(6)).
    Because the private university is operating as a private motor
carrier of passengers (business) it is not required to have
operating authority registration. The operation is not for-hire
because the private university does not receive payment for
transportation services. Though in this scenario the transportation
is not for-hire, it is important to reiterate that an entity's tax-
exempt or non-profit status does not determine whether its passenger
transportation is for-hire or private. Currently, Federal financial
responsibility requirements do not apply to operations by private
motor carriers of passengers (business).
    Scenario 4: A private high school owns and operates buses to
transport students, baseball team members, and faculty to games in
another State. One vehicle is a school bus with a capacity of 48
passengers. Two other vehicles are mini-buses designed to transport
26 passengers including the driver, and one other vehicle is a van
designed to transport 15 passengers including the driver. The school
does not transport students from home to school or vice versa. The
passenger transportation is financed by an allotment in the school's
athletic department budget.
    Guidance: This scenario describes some interstate transportation
by a CMV as defined in Sec. Sec.  390.5T and 390.5, however, some
exemptions may apply. This scenario also describes some
transportation outside the scope of FMCSA jurisdiction. The private
high school is a private motor carrier of passengers (business)
operating CMVs, as defined in Sec. Sec.  390.5T and 390.5, in
interstate commerce. The private high school fits within this
definition because the financing of passenger transportation is from
a general high school budget source, so there is no compensation for
the transportation. The transportation is only available to students
and school employees, not the public at large. Private schools
typically operate as commercial enterprises as the passenger
transportation to sporting events is in furtherance of the school's
business, including its athletic activities which are an element of
the institution's operations. Thus, transportation of students and
faculty is in furtherance of its commercial purpose. The possible
absence of ticket sales to sporting event spectators does not affect
the commercial nature of the enterprise.
    The transportation in larger vehicles is subject to the
requirements of 49 CFR parts 350 through 399 relevant to passenger
carrier operations. The school must register by following the
procedures in 49 CFR part 390 subpart E. Because the private high
school is a private motor carrier of passengers (business), not
providing interstate transportation for compensation, it is not
required to have operating authority registration under 49 CFR part
365. Whether the private high school is tax-exempt or has a non-
profit status does not determine whether its passenger
transportation is for-hire or private. The school is not required to
comply with Federal financial responsibility requirements.
    In addition, other than the van, the private high school's
vehicles are CMVs as defined in 49 CFR 383.5, and the drivers of
these vehicles must have CDLs with Passenger endorsements and be
enrolled in a drug and alcohol testing program consistent with 49
CFR part 382.
    The van is not a CMV because it is designed to transport 15
passengers including the driver and it is not transporting
passengers for compensation. A vehicle is considered a CMV only if
it is used to transport 16 or more passengers in interstate
commerce, regardless of the nature of compensation; or if is used to
transport 9 to 15 passengers including the driver for compensation
in interstate commerce.
    There is a regulatory exception in Sec.  391.69, however, from
certain driver qualification requirements relating to applications
for employment, investigations and inquiries, and road tests for
single-employer drivers employed by a private motor carrier of
passengers (business). Additionally, private motor carriers of
passengers (business) may continue to operate older buses
manufactured before Federal fuel system requirements were adopted,
provided the fuel system is maintained to the original
manufacturer's standards (Sec.  393.67(a)(6)).

Faith-Based Organizations and Passenger Transportation

    FMCSA frequently receives questions from religious and secular
organizations regarding passenger-carrying vehicles the
organizations own and use to transport their members and guests. The
scenarios presented below are illustrative examples; the same
principles apply to secular groups with similar operations.
    Scenario 1: To raise funds, a faith-based organization organizes
a one-time trip to an amusement park in a neighboring State. The
organization advertises the trip on its website and in various
public places such as grocery stores, libraries, etc., making the
trip open to the public. A per-person fee will cover admission to
the amusement park and round-trip transportation. The faith-based
organization will use its own bus, which is designed to transport
more than 15 passengers including the driver. A group member is the
volunteer bus driver. The passenger transportation is not confined
to a commercial zone.
    Guidance: This scenario describes for-hire interstate
transportation by a CMV. The faith-based organization's bus is a
CMV, as defined in Sec. Sec.  390.5T and 390.5, operating for-hire
in interstate commerce, and the organization is a motor carrier
subject to all applicable FMCSRs, including parts 350 through 399.
In addition, the faith-based organization is operating a passenger-
carrying CMV, as defined in Sec.  383.5 because it is designed to
transport 16 or more passengers; the driver of the organization's
bus must therefore hold a valid CDL with a Passenger endorsement and
comply with the drug and alcohol testing regulations in part 382.
    The organization must register by following the procedures in 49
CFR part 365

subpart A regarding operating authority registration and part 390
subpart E regarding USDOT number registration, because it is
receiving compensation for transportation in interstate commerce. No
exemptions apply to this operation.
    The faith-based organization is operating a passenger vehicle
with a seating capacity of at least 16, for-hire in interstate
commerce and is therefore required under Sec. Sec.  387.33T and
387.33 to maintain $5 million of financial responsibility.
    Scenario 2: A faith-based organization owns a bus which it uses
to transport some of its members to an associated organization in
another State. It suggests participating members contribute money to
help cover the fuel expense. The bus is designed to transport more
than 15 passengers including the driver. The transportation of the
faith-based organization members is not confined to a commercial
zone.
    Guidance: This scenario describes for-hire interstate
transportation by a CMV. The faith-based organization's bus is a
CMV, as defined in Sec. Sec.  390.5T and 390.5, operating in
interstate commerce, and the organization is a motor carrier subject
to all applicable FMCSRs, including parts 350 through 399. In
addition, the faith-based organization is operating a passenger-
carrying CMV, as defined in Sec.  383.5 because it is designed to
transport 16 or more passengers; the driver of the organization's
bus must therefore hold a valid CDL with a Passenger endorsement and
comply with the drug and alcohol testing regulations in part 382.
    The money provided from the organization's members for the trip
constitutes direct compensation. Any type of compensation for
providing a passenger transportation service makes the faith-based
organization a for-hire motor carrier of passengers. The
organization must register by following the procedures in 49 CFR
part 365 subpart A regarding operating authority registration and
part 390 subpart E regarding USDOT number registration.
    The faith-based organization is using a bus with a seating
capacity of 16 or more to transport passengers for hire in
interstate commerce and is thus required under Sec. Sec.  387.33T
and 387.33 to maintain financial responsibility of at least $5
million. The monetary contribution requested of each passenger
constitutes compensation, making the faith-based organization a for-
hire motor carrier.
    Scenario 3: A faith-based organization sponsors a trip for its
members to an amusement park in a neighboring State. The trip is
announced in the organization's newsletters, but not advertised to
the general public. Group members may invite friends and family,
including non-members, to join. An event fee paid by all trip
participants covers transportation, lodging, food, and admission to
the amusement park. The organization's bus that will be used for the
trip is designed to transport more than 15 passengers, including the
driver. The trip will extend beyond the commercial zone of the city
where the organization is located.
    Guidance: This scenario describes for-hire, interstate
transportation by a CMV. The faith-based organization's bus is a
CMV, as defined in Sec. Sec.  390.5T and 390.5, operating in
interstate commerce, and the faith-based organization is a motor
carrier subject to all applicable FMCSRs, including parts 350
through 399. In addition, the faith-based organization is operating
a passenger-carrying CMV, as defined in Sec.  383.5 because it is
designed to transport 16 or more passengers; the driver of the bus
must therefore hold a valid CDL with a Passenger endorsement and
comply with the drug and alcohol testing regulations in part 382.
    The organization is providing interstate motor vehicle
transportation for compensation indirectly through the event fee,
thus it must register by following the procedures in 49 CFR part 365
subpart A regarding operating authority registration and part 390
subpart E regarding USDOT number registration. The organization is a
for-hire motor carrier even though the trip is not available to the
public at large.
    The organization is an interstate for-hire motor carrier of
passengers compensated indirectly through the event fee. Because
there is no applicable exception, it must maintain the $5 million of
financial responsibility required to operate a vehicle with a
seating capacity of at least 16 passengers (Sec. Sec.  387.33T and
387.33).
    Scenario 4: A high school cheerleading team wants to travel to a
neighboring State to participate in a cheerleading competition. A
parent of one cheerleader is a member of a faith-based organization
that owns a bus designed to transport more than 15 passengers
including the driver. The parent persuades the faith-based
organization to take the team to the competition. The cheerleaders
and their parents give the faith-based organization money for use of
the bus, and the faith-based organization pays one of its members to
drive it. The trip is not confined to a commercial zone.
    Guidance: This scenario describes for-hire interstate
transportation of passengers by a CMV. The faith-based
organization's bus is a CMV, as defined in Sec.  390.5, operating
for hire in interstate commerce, and the organization is a motor
carrier subject to all applicable FMCSRs, including parts 350
through 399. In addition, the faith-based organization is operating
a passenger-carrying CMV, as defined in Sec.  383.5 because it is
designed to transport 16 or more passengers; the driver of the
faith-based organization's bus must hold a valid CDL with a
Passenger endorsement and comply with the drug and alcohol testing
regulations in part 382.
    This is for hire interstate transportation of passengers by
motor vehicle because the families pay the organization to use the
bus and no exemptions apply to the operation. Thus, operating
authority registration is required. The organization must register
by following the procedures in 49 CFR part 365 subpart A regarding
operating authority registration and part 390 subpart E regarding
USDOT number registration.
    Likewise, because the faith-based organization is operating a
passenger vehicle with a seating capacity of at least 16, for-hire
in interstate commerce, it is required under Sec. Sec.  387.33T and
387.33 to maintain $5 million of financial responsibility.
    Scenario 5: A faith-based organization with many charitable
operations provides transportation to a variety of passengers--both
members of the organization and nonmembers--for a variety of events.
For example, paid and volunteer collectors are sent to donation
sites, the faith-based organization's employees are taken to and
from the location of coat and food drives, donors are transported to
fundraising events, children in daycare are taken on trips, and
various individuals are provided transportation for job training
programs. The faith-based organization's daycare center charges a
fee for its services which include interstate passenger
transportation. The faith-based organization uses different types of
vehicles to transport its passengers. Some have a seating capacity
of 16 or more passengers, and others have a seating capacity of 15
or fewer passengers. All passenger-carrying vehicles are used
throughout the faith-based organization's various transportation
operations. In addition, all of the faith-based organization's
drivers operate a vehicle with a seating capacity of 16 or more
passengers to transport the daycare children on interstate trips on
at least an occasional basis. All of the various passengers are
transported into another State.
    Guidance: The daycare center-related transportation is for-hire
interstate transportation of passengers by CMV. The organization
operates CMVs, as defined in Sec. Sec.  390.5T and 390.5, in
interstate commerce as a for-hire motor carrier of passengers and is
subject to the applicable FMCSRs in parts 350 through 399. The
faith-based organization receives compensation through the
collection of fees for services, including transportation, paid for
the daycare, and all drivers and vehicles provide at least some
transportation for the daycare. While some of the transportation
operations are not for-hire, because all of the drivers and vehicles
are used in all of the operations, the Agency considers the
organization to be engaged in for-hire, interstate passenger
transportation as well as private, interstate passenger
transportation. While there is a limited exception from the safety
regulations in parts 390 through 399 for smaller vehicles in
Sec. Sec.  390.3T(f)(6) and 390.3(f)(6), it does not apply to the
organization because some of the organization's passenger-carrying
vehicles are designed or used to transport 16 or more passengers in
interstate commerce. In addition, because some of the vehicles are
designed to transport 16 or more passengers, and all of the drivers
operate all of the different vehicles on occasion, all the drivers
must have CDLs with Passenger endorsements, and the faith-based
organization must comply with the drug and alcohol testing
regulations in part 382.
    Because the faith-based organization receives indirect
compensation through the fees charged for the daycare center, it is
operating as an interstate, for-hire motor carrier of passengers. No
exemption from operating authority registration requirements
applies. The organization must register, therefore, by following the
procedures in 49 CFR part 365 subpart A regarding operating
authority registration and part 390 subpart E regarding USDOT number
registration.
    Because the faith-based organization operates some passenger
vehicles with a

seating capacity of at least 16, for-hire in interstate commerce, it
is required under Sec. Sec.  387.33T and 387.33 to maintain $5
million of financial responsibility.
    Scenario 6: A religiously-affiliated group of singers and
musicians travels to various locations to perform at events and
ceremonies. The group owns and operates multiple vehicles to
transport its members and their equipment. Each vehicle has a GVWR
and GVW of 10,001 to 26,000 pounds and is designed to transport more
than 15 passengers including the driver. All the vehicles are driven
between multiple States for performances. The hosting organizations
ask event participants for donations which are provided to the
musical group. Sometimes the musical group sells T-shirts,
souvenirs, or other merchandise at the events.
    Guidance: This scenario describes interstate transportation by
CMV, but some exemptions may apply. The musical group is a private
motor carrier of passengers (business) and is operating CMVs, as
defined in Sec. Sec.  390.5T and 390.5, in interstate commerce. The
transportation is thus subject to 49 CFR parts 350 through 399
relevant to passenger carrier operations. The group is considered a
private motor carrier of passengers (business) because the passenger
transportation is not available to the public at large; but the
receipt of money for a musical performance constitutes a business
transaction, and a part of the furtherance of the musical group's
commercial enterprise. Thus, the transportation of members and
equipment has a commercial purpose. The possible absence of
merchandise sales does not affect the commercial nature of the
enterprise, as the primary purpose is promotion of the group's
music, for which the group receives compensation. Whether a musical
group is tax-exempt or has a non-profit status does not determine
whether it is a business or nonbusiness. Finally, the transportation
of passengers and equipment is an essential element of the group's
operations, and such transportation is in furtherance of its
commercial enterprise. All of the donations received may be used to
cover the cost of fuel, maintenance, depreciation and insurance on
the vehicle, but the transportation nevertheless furthers a
commercial purpose.
    Accordingly, the musical group must register by following the
procedures in 49 CFR part 390 subpart E regarding USDOT number
registration. In addition, because the musical group's vehicles are
designed to transport more than 15 passengers including the driver,
the drivers of these vehicles must have CDLs with a Passenger
endorsement and be enrolled in a drug and alcohol testing program
consistent with 49 CFR part 382.
    There is a regulatory exception in Sec.  391.69, however, from
certain driver qualification requirements relating to applications
for employment, investigations and inquiries, and road tests for
single-employer drivers employed by a private motor carrier of
passengers (business). Additionally, private motor carriers of
passengers (business) may also continue to operate older buses
manufactured before Federal fuel system requirements were adopted,
provided the fuel system is maintained to the original
manufacturer's standards (Sec.  393.67(a)(6)).
    The musical group's interstate transportation of its members is
in furtherance of a commercial enterprise, but the group is not
receiving compensation for providing transportation. The
compensation received is for their musical performance. The members
of the group likewise do not pay a fee for their transportation. The
musical group is thus a private motor carrier of passengers
(business), and such carriers are not required to obtain operating
authority registration.
    The musical group is a private motor carrier of passengers
(business), therefore, currently the group is not required to
maintain evidence of financial responsibility on file with FMCSA.
    Private motor carriers of passengers are not required to obtain
operating authority registration and are not subject to the
financial responsibility requirements.

Miscellaneous Passenger Transportation

    Scenario 1: An assisted living apartment community is a
commercial business that owns and operates a bus designed to
transport more than 15 passengers, including the driver. The drivers
are employees of the apartment community. The bus is used to
transport residents to medical appointments, shopping centers,
theaters, etc. Routine local transportation within the State is
financed by general fees paid by all community residents. The
community office assesses a special charge for entertainment-related
transportation. The general public is not allowed to use the bus
service. Some trips to shopping centers and theaters go into a
neighboring State, but all transportation remains in the commercial
zone of the community.
    Guidance: This scenario describes for-hire interstate
transportation by commercial motor vehicle, but some exemptions
apply. The community is operating a CMV, as defined in Sec. Sec.
390.5T and 390.5, in interstate commerce. The fact that all
passenger transportation is entirely within a commercial zone is
irrelevant for purposes of the ``interstate commerce'' component of
the definition of CMV under Sec. Sec.  390.5T and 390.5. The
transportation is subject to all of the provisions in 49 CFR parts
350 through 399 relevant to passenger carrier operations. In
addition, the 16-passenger van is also a CMV as defined in Sec.
383.5, and the driver therefore must hold a valid CDL with a
Passenger endorsement and be enrolled in a drug and alcohol testing
program consistent with 49 CFR part 382.
    Although the community is an interstate for-hire motor carrier
of passengers assessing special charges for entertainment trips to a
neighboring State, operating authority registration is not required
because the transportation is wholly within the commercial zone
where the community is located (49 U.S.C. 13506(b)(1)). However, the
community must register by following the procedures in 49 CFR part
390 subpart E regarding USDOT number registration because the
community operates a CMV, as defined in Sec. Sec.  390.5T and 390.5,
in interstate commerce.
    Under Sec. Sec.  387.33T and 387.33, the community must obtain
and maintain $5 million of financial responsibility because it is a
for-hire motor carrier of passengers operating in interstate
commerce and at least one of its vehicles has seating for 16 or more
passengers. The general fees paid by the community residents cover a
multitude of services including local transportation. This indirect
compensation arrangement for transportation is service for-hire. The
special charge for entertainment-related transportation is direct
compensation and is also a for-hire service.
    Scenario 2: A youth camp transports campers in 15-passenger vans
from an airport to the camp site and back, from the camp site to
parks and other locations in neighboring States, and to facilities
for medical care, etc. Trips to and from the airport extend beyond a
25-mile radius from the boundary of the airport and the commercial
zone of the municipality that falls within the 25-mile radius of the
airport. Other trips also extend beyond a commercial zone. Campers
and camp employees are the only transported passengers. The vans
have a GVW and GVWR below 10,001 pounds. The camp collects payment
for the participating youth with a total package fee.
    Guidance: If a single fee covers all services provided by the
camp including transportation, most of the safety regulations would
not apply to the camp. Although the camp operates CMVs as defined in
Sec. Sec.  390.5T and 390.5 in interstate commerce (more than 8
passengers, for compensation), it would qualify for the exception in
Sec. Sec.  390.3T(f)(6) and 390.3(f)(6) for CMVs designed or used to
transport between 9 and 15 passengers not for direct compensation,
and its vans meet none of the alternative definitions of a CMV (such
as a GVW or GVWR of 10,001 pounds or more). The organization would
therefore be required to comply only with those requirements
specified in Sec. Sec.  390.3T(f)(6) and 390.3(f)(6). Furthermore,
the camp must register by following the procedures in 49 CFR part
390 subpart E regarding USDOT number registration.
    However, if the camp collects a specific fee for passenger
transportation, it is then receiving direct compensation and does
not qualify for the limited exception in Sec. Sec.  390.3T(f)(6) and
390.3(f)(6). If direct compensation occurs, the camp must comply
with the applicable regulations in 49 CFR parts 350 through 399
including motor carrier registration in accordance with Sec.
390.201. In the case of direct compensation, the drivers of these
15-passenger vans with a GVW and GVWR below 10,001 pounds are not
required to hold a CDL and are not subject to employer conducted
controlled substances and alcohol testing because such vehicles are
not CMVs as defined in Sec.  383.5. Although the drivers are not
required to hold a CDL, they must be medically examined and
certified in accordance with Sec. Sec.  391.41, 391.43, and 391.45,
and they are subject to the general driver qualification regulations
in part 391 because such vehicles are CMVs as defined in Sec. Sec.
390.5T and 390.5.
    Though the camp is engaged in for-hire interstate transportation
of passengers by motor vehicle, there is an exemption from

operating authority registration requirements in 49 U.S.C.
13506(a)(16). This camp falls within the exemption, which limits the
Agency's jurisdiction over the transportation of passengers by 9- to
15-passenger motor vehicles operated by youth or family camps that
provide recreational or educational activities.
    Nonetheless, because the camp is an interstate for-hire motor
carrier of passengers compensated indirectly through camp fees, it
must maintain $1.5 million of financial responsibility (Sec. Sec.
387.33T and 387.33). The camp is not required to maintain evidence
of financial responsibility on file with FMCSA.

    Issued under the authority delegated in 49 CFR 1.87.

Robin Hutcheson,
Administrator.
[FR Doc. 2022-24089 Filed 11-14-22; 8:45 am]
BILLING CODE 4910-EX-P