[Federal Register Volume 89, Number 38 (Monday, February 26, 2024)]
[Rules and Regulations]
[Pages 13984-13998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03782]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 372

[Docket No. FMCSA-2023-0007]
RIN 2126-AC57


Exemption From Operating Authority Regulations for Providers of 
Recreational Activities

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

ACTION: Final rule.

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SUMMARY: FMCSA amends its regulations to implement the statutory 
exemption from its operating authority registration requirements for 
providers of recreational activities. The exemption applies to motor 
carriers operating a motor vehicle designed or used to transport 
between 9 and 15 passengers (including the driver), whether operated 
alone or with a trailer attached to the transport vehicle, if the motor 
vehicle is operated by a person that provides recreational activities 
within a 150 air-mile radius of the location at which passengers 
initially boarded the motor vehicle at the beginning of the trip. FMCSA 
also defines recreational activities to clarify the exemption, 
adopting, in response to a comment, a definition modified from that 
proposed in the notice of proposed rulemaking (NPRM).

DATES: This final rule is effective April 26, 2024.
    Petitions for Reconsideration of this final rule must be submitted 
to the FMCSA Administrator no later than March 27, 2024.

FOR FURTHER INFORMATION CONTACT: Mr. Antonio Harris, Registration, 
Licensing and Insurance Division, Office of Research and Registration, 
FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001; (202) 366-
2964; <a href="/cdn-cgi/l/email-protection#55343b213a3b3c3a7b3d3427273c2615313a217b323a23"><span class="__cf_email__" data-cfemail="e2838c968d8c8b8dcc8a8390908b91a2868d96cc858d94">[email protected]</span></a>. If you have questions on viewing or 
submitting material to the docket, call Dockets Operations at (202) 
366-9826.

[[Page 13985]]


SUPPLEMENTARY INFORMATION: FMCSA organizes this final rule as follows:

I. Availability of Rulemaking Documents
II. Executive Summary
    A. Purpose and Summary of the Regulatory Action
    B. Costs and Benefits
III. Abbreviations
IV. Legal Basis
V. Discussion of Proposed Rulemaking and Comments
    A. Proposed Rulemaking
    B. Comments and Responses
VI. Changes From the NPRM
VII. Severability
VIII. Section-by-Section Analysis
IX. Regulatory Analyses
    A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563 
(Improving Regulation and Regulatory Review), E.O. 14094 
(Modernizing Regulatory Review), and DOT Regulatory Policies and 
Procedures
    B. Congressional Review Act
    C. Regulatory Flexibility Act
    D. Assistance for Small Entities
    E. Unfunded Mandates Reform Act of 1995
    F. Paperwork Reduction Act
    G. E.O. 13132 (Federalism)
    H. Privacy
    I. E.O. 13175 (Indian Tribal Governments)
    J. National Environmental Policy Act of 1969

I. Availability of Rulemaking Documents

    To view any documents mentioned as being available in the docket, 
go to https://www.regulations.gov/docket/FMCSA-2023-0007/document and 
choose the document to review. To view comments, click this final rule, 
then click ``Browse Comments.'' If you do not have access to the 
internet, you may view the docket online by visiting Dockets Operations 
at U.S. Department of Transportation, 1200 New Jersey Avenue SE, 
Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through 
Friday, except Federal holidays. To be sure someone is there to help 
you, please call (202) 366-9317 or (202) 366-9826 before visiting 
Dockets Operations.

II. Executive Summary

A. Purpose and Summary of the Regulatory Action

    Section 23012 of the Infrastructure Investment and Jobs Act (IIJA) 
(Pub. L. 117-58, 135 Stat. 429 (H.R. 3684, Nov. 15, 2021)) amended 49 
United States Code (U.S.C.) 13506 by adding, in paragraph (b)(4), a new 
exemption from FMCSA's operating authority registration requirements. 
FMCSA adds new regulatory text implementing this statutory exemption. 
The exemption from operating authority registration applies to motor 
carriers operating a motor vehicle designed or used to transport 
between 9 and 15 passengers (including the driver), whether operated 
alone or with a trailer attached to the transport vehicle, if the motor 
vehicle is operated by a person \1\ that provides recreational 
activities and the transportation is provided within a 150 air-mile 
radius of the location at which passengers initially boarded the motor 
vehicle at the outset of the trip.
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    \1\ While the statute refers to a ``person,'' that term can 
refer both to an individual or to a motor carrier under the 
definitions of that term in 49 U.S.C. 13102(18) and 1 U.S.C. 1.
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    FMCSA also defines recreational activities to clarify the 
exemption. The statute, which requires that the motor vehicle be 
operated ``by a person that provides recreational activities,'' does 
not define recreational activities. The Agency's definition clarifies 
the types of recreational activities FMCSA has determined would qualify 
for the exemption in 49 U.S.C. 13506(b)(4). FMCSA adopts a definition 
of recreational activities consistent with the activities that Congress 
outlined in another section of the IIJA that uses this term. Section 
11512 of the IIJA provided examples of ``groups representing 
recreational activities and interests'' in subsection (c)(4) which 
provided some insight as to legislative intent for the term 
recreational activities in section 23012. The definition FMCSA adopts 
in implementing section 23012 includes activities Congress mentions in 
section 11512 and also describes activities that fall outside the 
intended scope of the term. This language is intended to illustrate 
which activities are within the exemption, based on the intent of 
Congress, and to allow sufficient flexibility for analysis of the 
term's applicability to activities not specified in the regulation.

B. Costs and Benefits

    The cost savings associated with this rulemaking include changes in 
paperwork, fees, and insurance costs associated with maintaining for-
hire operating authority. Because there is no pre-existing definition 
of recreational activities, motor carriers previously may have been 
interpreting their eligibility for the operating authority exemption in 
varying ways. Through this rulemaking, there will be increased costs 
for motor carriers that inappropriately interpreted their eligibility 
for the exemption, and decreased costs for those carriers that now have 
clear regulatory language to support use of the exemption. The 
differing interpretations by regulated entities and enforcement 
officials may have hindered consistent enforcement practices, thereby 
impacting business-related decisions in providing transportation for 
recreational activities. The clarification in this rule may resolve 
possible information asymmetry and enforcement differences by creating 
a common understanding between FMCSA and motor carriers. Because this 
rule may also lead to an increase in exemption use, it will benefit 
carriers by improving the efficiency of their business operations and 
increase both consumer and producer surplus.

III. Abbreviations

AOA America Outdoors Association
AWM AWM Associates, LLC
BEA Bureau of Economic Analysis
BLS Bureau of Labor Statistics
CE Categorical Exclusion
CFR Code of Federal Regulations
DOL U.S. Department of Labor
DOT Department of Transportation
E.O. Executive Order
FMCSA Federal Motor Carrier Safety Administration
FMCSRs Federal Motor Carrier Safety Regulations
FR Federal Register
FRFA Final Regulatory Flexibility Analysis
GDP Gross Domestic Product
ICR Information Collection Request
IRFA Initial Regulatory Flexibility Analysis
IIJA Infrastructure Investment and Jobs Act
MCMIS Motor Carrier Management Information System
NAICS North American Industry Classification System
NAMIC National Association of Mutual Insurance Companies
NPRM Notice of Proposed Rulemaking
OEWS Occupational Employment and Wage Statistics
OMB Office of Management and Budget
PIA Privacy Impact Assessment
PTA Privacy Threshold Assessment
RIA Regulatory Impact Analysis
Secretary The Secretary of the Department of Transportation
SBA Small Business Administration
UMRA Unfunded Mandates Reform Act of 1995
URS Unified Registration System
U.S.C. United States Code
USDOT United States Department of Transportation
Vehicle Associations Motorcycle Industry Council, Specialty Vehicle 
Institute of America, and Recreational Off-Highway Vehicle 
Association

IV. Legal Basis

    Section 23012 of the IIJA amended 49 U.S.C. 13506 by adding a new 
exemption from the requirement to obtain operating authority 
registration for ``providers of recreational activities'' operating 
passenger vehicles designed or used to transport between 9 and 15 
passengers (including the driver) (see 49 U.S.C. 13506(b)(4)). The 
statute, which requires that the motor vehicle be operated ``by a 
person that provides recreational activities,'' does not define

[[Page 13986]]

recreational activities. This final rule defines recreational 
activities to clarify the exemption's applicability.
    Under Title 49, Code of Federal Regulations (CFR) 1.87(a)(5), the 
authority of the Secretary of the Department of Transportation (the 
Secretary) to carry out the functions relating to the registration 
requirements in 49 U.S.C. 13901 and 13902 is delegated to the FMCSA 
Administrator. Sections 13901 and 13902 generally require that any 
person wishing to provide transportation subject to jurisdiction under 
subchapter I of chapter 135 \2\ must be registered as a motor carrier, 
defined in 49 U.S.C. 13102(14) as ``a person providing motor vehicle 
transportation for compensation.'' The requirements of these sections, 
which are enforced under Sec.  392.9a (``Operating authority''), are 
the basis for the rules governing applications for operating authority 
registration in 49 CFR part 365.
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    \2\ Absent an exemption, the Secretary has jurisdiction over 
transportation by motor carrier and the procurement of that 
transportation, to the extent that passengers, property, or both, 
are transported by motor carrier in interstate commerce (49 U.S.C. 
13501). This authority has been delegated to the FMCSA Administrator 
under 49 CFR 1.87(a)(3).
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    Under 49 CFR 1.87(a)(3), the authority of the Secretary to carry 
out the functions related to the jurisdiction requirements in 49 U.S.C. 
13506 is delegated to the FMCSA Administrator. Section 13506 provides 
miscellaneous motor carrier transportation exemptions, including the 
exemption from operating authority for providers of recreational 
activities added by the IIJA. The statutory exemption provided in 
section 13506 provides the basis for the regulatory exemption added 
under this rule in 49 CFR 372.113, including the definition of 
recreational activities added to 49 CFR 372.107.

V. Discussion of Proposed Rulemaking and Comments

A. Proposed Rulemaking

    On June 21, 2023, FMCSA published in the Federal Register (Docket 
No. FMCSA-2023-0007, 88 FR 40146) an NPRM titled ``Exemption from 
Operating Authority Regulations for Providers of Recreational 
Activities.'' The NPRM proposed a new Sec.  372.113 that outlines the 
exemption from operating authority registration for providers of 
recreational activities in 49 U.S.C. 13506(b)(4). This new section 
would reflect the statutory language and incorporate the exemption into 
the FMCSRs. The NPRM also proposed adding a definition of recreational 
activities to Sec.  372.107 which would provide a clear description of 
the types of activities that qualify for the exemption in 49 U.S.C. 
13506(b)(4). The proposed definition set out the meaning of 
recreational activities, provided a non-exhaustive list of included 
activities, and identified two types of excluded activities. The NPRM 
asked for comments addressing whether the last part of the definition, 
excluding certain types of activities, should be retained or removed.

B. Comments and Responses

    FMCSA solicited comments concerning the NPRM for 60 days ending 
August 21, 2023, and by that date four comments were received. AWM 
Associates, LLC (AWM), the National Association of Mutual Insurance 
Companies (NAMIC), and a private citizen each submitted a comment, and 
a joint comment was submitted by the Motorcycle Industry Council, 
Specialty Vehicle Institute of America, and Recreational Off-Highway 
Vehicle Association (the ``Vehicle Associations'').
    FMCSA did not receive any comments regarding the portion of the 
recreational activities definition that excludes certain types of 
activities. The exclusions are provided to clarify that certain 
activities are exempt activities where the service provided by the 
motor carriers mainly focuses on transportation from one location to 
another. In such cases, the motor carrier's business is in fact selling 
transportation--not providing recreational activities. FMCSA has 
received inquiries illustrative of these types of activities. For 
example, a bus company offering scheduled route service with multiple 
stops would not fall within the exemption merely because one of the 
scheduled stops was at or near a water park or a horseback riding 
stable. Likewise, motor carriers that advertise and provide alcohol, 
music, or other ``party'' activities on board the vehicle as the 
principal activity or purpose of the transportation would not be 
eligible for the exemption. In these situations, the activity cannot be 
completed and has no purpose without the transportation. The 
transportation in such circumstances is integral to the activities, 
rather than incidental. Accordingly, the definition in Sec.  372.107 
explicitly excludes any activity: (1) for which the activity offered or 
sold is occurring simultaneously with the transportation; or (2) for 
which the transportation is the primary service offered for sale.
AWM
    Comment: AWM objected to the creation of an exemption from the 
operating authority registration rules for providers of recreational 
activities and questioned whether the cost of compliance for providers 
of recreational activities under the current regulations is burdensome. 
Going beyond the exemption at issue, AWM stated that the FMCSRs are 
unclear regarding which motor carriers are required to apply for 
operating authority under part 365. AWM also questioned whether the 
providers of recreational activities would be required to obtain 
operating authority under part 365.
    Response: The exemption being added to Sec.  372.113 simply 
reflects the statutory language in 49 U.S.C. 13506(b)(4) that is 
currently in effect and incorporates the statutory exemption from 
operating authority registration into the FMCSRs for convenient 
reference. FMCSA is not determining through this rulemaking whether 
there should be an exemption from the operating authority registration 
rules for providers of recreational activities; that decision was made 
by Congress when it passed the IIJA which created a statutory 
exemption. FMCSA's role in this rulemaking is to define the term 
recreational activities and consider the regulatory and economic 
impacts of clarifying the definition. The Agency considers the 
objection to the creation of the exemption outside the scope of the 
rule and declines to make any changes to the rule based on it.
    AWM's comment questions whether the cost of obtaining and 
maintaining operating authority is burdensome, and it critiques 
portions of the comment from the America Outdoors Association (AOA) 
relating to this issue. The AOA comment, which relates to operating 
authority for recreational activity providers, predates both the IIJA 
and this rule, and AOA submitted it in response to a DOT notice 
requesting that the public identify and provide input on the 
Department's existing guidance documents that are good candidates for 
repeal, replacement, or modification.\3\ The Agency added AOA's comment 
to the docket for this rulemaking and cited it in the NPRM in support 
of its proposed definition of the term recreational activities. 
However, the Agency did not rely on AOA's comment in the regulatory 
impact analysis (RIA). The Agency's analysis accounts for the impact of 
the statutory exemption, which was enacted after AOA's

[[Page 13987]]

comment was submitted to FMCSA. The Agency's RIA considers the impact 
of codifying and clarifying the statutory exemption currently in 
effect, whereas AWM's comment is directed towards AOA's comments on 
cost and the impact of establishing the exemption as an initial matter. 
Therefore, the Agency considers this portion of AWM's comment outside 
the scope of the rule and declines to make any changes to the rule 
based on it.
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    \3\ AOA's comment was submitted in response to DOT's Notice of 
Review of Guidance, 84 FR 1820, Feb. 5, 2019.
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    Regarding the applicability of operating authority requirements in 
part 365, 49 U.S.C. 13901 and 13902 generally require that any person 
that wishes to provide transportation subject to jurisdiction under 
subchapter I of chapter 135 be registered as a motor carrier, defined 
in 49 U.S.C. 13102(14) as ``a person providing motor vehicle 
transportation for compensation.'' The requirements of these sections, 
which are enforced under Sec.  392.9a (``Operating authority''), are 
the basis for the rules governing applications for operating authority 
registration in 49 CFR part 365. Part 365 states that the rules 
governing applications for operating authority apply to motor carriers 
of property or passengers.\4\ Congress established the operating 
authority registration exemption for providers of recreational 
activities carrying 9 to 15 passengers when it passed the IIJA. This 
rulemaking seeks only to clarify the statutory exemption by defining 
the term recreational activities. This rulemaking does not make any 
changes to the operating authority provisions in 49 CFR part 365. The 
Agency considers this portion of AWM's comment outside the scope of the 
rule and declines to change the rule based on it.
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    \4\ Further explanation of the regulations applicable to 
passenger motor carriers is provided in Appendix A to Part 390--
Applicability of the Registration, Financial Responsibility, and 
Safety Regulations to Motor Carriers of Passengers.
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The Vehicle Associations
    Comment: The Vehicle Associations generally supported the proposed 
exemption but proposed a modification to the definition of recreational 
activities. They proposed modifying the definition to state that 
recreational activities means motorized and non-motorized activities, 
and to add off-highway vehicle driving and riding to the list of 
activities expressly included. The Vehicle Associations stated that 
this modification is supported by the inclusion of off-highway 
motorcycling, all-terrain vehicles, and other off-road motorized 
vehicle activities in section 11512 of the IIJA, which is the IIJA 
section the Agency cited in the NPRM in support of the proposed 
definition. The Vehicle Associations also stated that the modified 
definition would be consistent with recreation-related terms defined 
elsewhere in Federal statute, as well as lists of recreational 
activities provided as examples by Federal land management agencies.
    Response: The Agency adopts the Vehicle Associations' proposed 
modification in part. The Agency agrees that adding ``off-highway 
vehicle driving and riding'' to the non-exhaustive list of covered 
activities will help clarify the exemption. As the Vehicle Associations 
note, inclusion of these activities is supported by the list of 
recreational activities in section 11512 of the IIJA. Although that 
section appears in a separate division and title of the IIJA from the 
motor carrier safety provisions in Division B, Title III, and does not 
conclusively define the scope of the exemption in section 23012, it 
does provide some insight into the legislative intent, as explained in 
the NPRM. The Agency adopts the addition of ``off-highway vehicle 
driving and riding'' to align with that intent. The Agency considers 
the other part of the proposed modification, the addition of the phrase 
``motorized and non-motorized,'' unnecessary and declines to adopt it.
NAMIC
    Comment: NAMIC raised a concern that ``expanding eligibility for an 
exemption from federal requirements for insurance coverage . . . could 
create confusion for policyholders and may not be administratively 
possible for insurers.'' NAMIC raised a further concern that differing 
State and Federal requirements for insurance coverage risk confusion 
and underinsurance among motor carriers. NAMIC suggested further 
investigation into the availability of ``coverage on a monthly basis 
and for which coverage can be stopped and started at reasonable notice 
periods,'' and whether ``states will permit similar staggering of 
insurance coverage for such vehicles.''
    Response: As explained in response to AWM's comment, this rule 
codifies and clarifies in the CFR an existing statutory exemption from 
operating authority requirements. Although operating authority is 
linked to insurance through financial responsibility requirements, this 
rule does not create or expand any exemption to Federal insurance 
requirements more broadly because motor carriers eligible for the 
operating authority exemption may still be required to maintain 
financial responsibility under other regulations in the FMCSRs (see, 
e.g., 49 CFR 387.31(a)). The Agency declines to make any changes to the 
final rule based on NAMIC's concern regarding expansion of an exemption 
from Federal insurance requirements.
    Regarding potential confusion with State insurance requirements, 
the Agency believes this rule will alleviate confusion. The rule 
provides a definition for recreational activities, consistent with the 
Agency's understanding of congressional intent when establishing the 
exemption, to create a common understanding among motor carriers and 
enforcement officials about the exemption. The rule should clarify the 
Federal requirements and has no impact on the applicable State 
requirements. The Agency disagrees that the rule increases the risk of 
confusion as compared to the statutory exemption in 49 U.S.C. 
13506(b)(4) standing alone, and it declines to make any changes to the 
exemption based on NAMIC's comment. State insurance requirements are 
relevant to two scenarios in the RIA, because a seasonal motor carrier 
eligible for the exemption may still have to carry insurance in the 
off-season to satisfy State requirements, depending on its particular 
circumstances. The Agency has added a statement in the RIA to clarify 
that cost impacts will vary depending on State insurance coverage 
requirements.
    Whether certain insurance policies are available to motor carriers 
providing recreational activities eligible for the operating authority 
exemption, where such policies offer cost savings to the motor carriers 
due to the exemption, is a separate concern from the applicability of 
the exemption. Changing the extent of the exemption is outside the 
Agency's authority, and the Agency declines to make any changes to the 
exemption based on this portion of NAMIC's comment but does consider it 
in relation to the RIA for the rule.
    In the NPRM, the Agency's RIA included an estimate of potential 
insurance cost savings, among other potential cost savings, for 
eligible motor carriers.\5\ The Agency requested comments on its 
estimates of liability insurance costs and the administrative costs of 
researching liability insurance or other financial responsibility 
options,

[[Page 13988]]

but the Agency did not receive any comments on this issue. NAMIC 
suggested further research into the availability of monthly insurance 
coverage options for exemption-eligible motor carriers, but otherwise 
the Agency did not receive any data or other information regarding its 
insurance cost estimates.
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    \5\ Whether a motor carrier eligible for the operating authority 
exemption in this rule sees an impact to their insurance costs as a 
result of this rule depends on a number of factors: (1) whether the 
motor carrier operates year-round, (2) whether they operate only 
seasonally, but maintain year-round insurance coverage to satisfy 
other Federal or State requirements, or (3) whether they are already 
using the statutory operating authority exemption. Although the 
exemption in this rule will not impact the insurance costs for all 
carriers, they may realize other benefits such as administrative 
cost savings, as described elsewhere in the rule.
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    Based on the information gathered and the Agency's experience 
administering the relevant regulations, FMCSA believes it is possible 
for a motor carrier providing recreational activities on a seasonal 
basis to carry an insurance policy during its operating season, 
terminate the policy at the end of the season, and obtain a new policy 
at the beginning of its next operating season.\6\ The NPRM RIA used the 
forgone insurance premiums in the offseason as an estimate of insurance 
cost savings for motor carriers in this scenario. The Agency maintains 
that this method provides a reasonable estimate of the potential 
insurance cost savings, even though the actual insurance cost savings 
realized by motor carriers in this scenario may differ depending on 
their specific insurer, policy, location, and other particular 
circumstances. The Agency has added a statement in the RIA to clarify 
that cost impacts will vary depending on State insurance coverage 
requirements and has removed quantified estimates of insurance cost 
savings. For further assumptions made on insurance coverage, refer to 
the section labeled ``Insurance'' in the RIA.
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    \6\ For example, Progressive offers policyholders the option to 
adjust coverage based on seasonal changes (Progressive Commercial 
Auto Insurance, available at https://www.progressivecommercial.com/commercial-auto-insurance/ (accessed Sept. 20, 2023)).
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Comments Outside the Scope of the Rulemaking
    Comment: A private citizen objected to the creation of an exemption 
from the operating authority registration rules for providers of 
recreational activities.
    Response: As explained in response to AWM's comment, the exemption 
that is being added to Sec.  372.113 reflects the statutory language in 
49 U.S.C. 13506(b)(4) and incorporates the statutory exemption into the 
FMCSRs. FMCSA is not determining through this rulemaking whether there 
should be an exemption from the operating authority registration rules 
for providers of recreational activities. The Agency considers this 
comment outside the scope of the rule and declines to make any changes 
to the rule based on it.

VI. Changes From the NPRM

    In response to a comment, FMCSA is changing the definition of 
recreational activities in this final rule from that proposed in the 
NPRM. The Agency is modifying the definition of recreational activities 
in Sec.  372.107 to include off-highway vehicle driving and riding in 
the non-exhaustive list of activities provided as examples within the 
definition. The Agency is also making a grammatical change to the last 
sentence of the definition to give the numbered clauses parallel 
structure.

VII. Severability

    Congress created an exemption from FMCSA's operating authority 
registration rules for ``providers of recreational activities.'' (49 
U.S.C. 13506(b)(4)). This final rule adds new regulatory text 
implementing this statutory exemption and defines the term recreational 
activities. This final rule is meant to operate holistically in 
addressing a range of issues necessary to ensure the implementation of 
the exemption. However, FMCSA recognizes that certain provisions focus 
on unique topics. Therefore, FMCSA finds that the various provisions 
within this rule are severable and able to operate functionally if one 
or more provisions were rendered null or otherwise eliminated. The 
remaining provision or provisions within the rule will continue to 
operate functionally if any one or more provisions were invalidated and 
any other provision(s) remained. In the event a court were to 
invalidate one or more of this final rule's unique provisions, the 
remaining provisions should stand, thus allowing this congressionally 
mandated exemption to continue to operate.

VIII. Section-by-Section Analysis

    This section-by-section analysis describes the proposed changes in 
numerical order.

Section 372.107 Definitions

    As proposed in the NPRM, FMCSA adds a new paragraph (i), which 
defines recreational activities.

Section 372.113 Providers of Recreational Activities

    As proposed in the NPRM, FMCSA adds a new Sec.  372.113 to subpart 
A of 49 CFR 372. This new section outlines the exemption from operating 
authority registration in 49 U.S.C. 13506(b)(4).

IX. Regulatory Analyses

A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 
13563 (Improving Regulation and Regulatory Review), E.O. 14094 
(Modernizing Regulatory Review), and DOT Regulatory Policies and 
Procedures

    FMCSA has considered the impact of this final rule under E.O. 12866 
(58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, E.O. 13563 
(76 FR 3821, Jan. 21, 2011), Improving Regulation and Regulatory 
Review, and E.O. 14094 (88 FR 21879, Apr. 11, 2023), Modernizing 
Regulatory Review. The Office of Information and Regulatory Affairs 
within the Office of Management and Budget (OMB) determined that this 
final rule is not a significant regulatory action under section 3(f) of 
E.O. 12866, as supplemented by E.O. 13563, and does not require an 
assessment of potential costs and benefits under section 6(a)(3) of 
that order. Accordingly, OMB has not reviewed it under that E.O.
Purpose
    This final rule codifies the exemption for providers of 
recreational activities in regulation and defines recreational 
activities to clarify this exemption by providing a clear description 
of what types of recreational activities do and do not qualify for the 
exemption in 49 U.S.C. 13506(b)(4). This ensures that providers of 
recreational activities are aware of their eligibility for the 
exemption from filing for operating authority that FMCSA is adding in 
new Sec.  372.113. Specifically, this rule affects motor carriers 
operating a motor vehicle designed or used to transport between 9 and 
15 passengers (including the driver), whether operated alone or with a 
trailer attached to the transport vehicle, if the motor vehicle is 
operated by a person that provides recreational activities and the 
transportation is provided within a 150 air-mile radius of the location 
at which passengers initially boarded the motor vehicle at the outset 
of the trip.
    This rule provides clarity to both motor carriers and enforcement 
officials regarding which carriers qualify for the new exemption in 
section 23012 of the IIJA as of November 15, 2021. Because Congress did 
not define recreational activities and there is no pre-existing 
definition of recreational activities in statute or regulation, FMCSA 
is bringing the FMCSRs into alignment with the IIJA's exemption by 
adding a new definition of that term. This clarity resolves possible 
information asymmetry currently affecting the regulated industry and 
enforcement

[[Page 13989]]

officials as to which carriers qualify for the operating authority 
exemption.
Baseline
    For the purposes of this analysis, the changes in this rule are 
compared to the baseline established by section 23012 of the IIJA and 
the current requirements for providers of recreational activities under 
49 U.S.C. 13901 and 13902 and 49 CFR part 365. As discussed above, the 
IIJA created a new exemption from the requirement to obtain FMCSA 
operating authority registration for providers of recreational 
activities. Accordingly, this exemption has been available to these 
motor carriers since the IIJA was enacted on November 15, 2021. 
Therefore, the incremental impacts of this rule relative to the 
baseline lie in how the affected industry and enforcement officials 
have been interpreting the term in the absence of a definition in the 
FMCSRs.
Uncertainties
    The Agency relies on the Motor Carrier Management Information 
System (MCMIS) database to obtain information on commercial motor 
carriers subject to the FMCSRs. While MCMIS does contain data on 
passenger vehicle size (e.g., weight and capacity) and type, it does 
not track industry type, nor whether an operating authority exemption 
is applicable. Consequently, the Agency knows neither the magnitude of 
the population affected by this rule, nor the degree to which passenger 
carriers are currently taking advantage of the exemption. Therefore, 
FMCSA estimates how different carriers will be impacted by costs and 
benefits on a per-unit basis, depending on their current behavior.
    In the NPRM, the Agency invited the public to provide information 
to address uncertainty surrounding the size of the affected population 
and the frequency of exemption use. While FMCSA did not receive such 
information, a comment from AWM provided questions about whether an 
exemption from the current requirements for obtaining and maintaining 
operating authority was necessary. However, FMCSA is not determining 
through this rulemaking whether there should be an exemption from the 
operating authority registration rules for providers of recreational 
activities. This decision was made by Congress when it passed the IIJA 
in 2021, which created a statutory exemption. FMCSA's role in this 
rulemaking is only to define the term recreational activities and 
consider the impacts of clarifying the exemption. The Agency will 
therefore not revise the rule in response to comments outside of that 
scope.
Carrier Cost Components
    The resulting cost impacts of the definitional clarification in 
this rule include changes in paperwork, fees, and insurance costs 
associated with maintaining operating authority. Because there is no 
pre-existing definition of recreational activities, motor carriers may 
be interpreting their eligibility for the operating authority exemption 
in varying ways. Depending on current interpretations, this rule will 
either increase, decrease, or have no incremental impact on the degree 
to which the operating authority exemptions are used relative to the 
baseline. Because FMCSA is unable to ascertain how various carriers 
interpreted this exemption set forth by section 23012 of the IIJA in 
2021, the Agency estimates the impacts of this rule based on four 
hypothetical scenarios of exemption use. These four scenarios make use 
of the forms and insurance cost analyses set forth below, in advance of 
the scenarios.
Forms
    Currently, there are several forms that providers of recreational 
activities are responsible for submitting to FMCSA in order to maintain 
operating authority registration. As detailed later in this analysis, 
the use of these forms, as explained in Table 1, may change as a result 
of this rule, depending on how the affected carriers are interpreting 
this exemption.

    Table 1--Forms Currently Used in Maintaining Operating Authority
------------------------------------------------------------------------
                  Form                           Affected groups
------------------------------------------------------------------------
Motor Carrier Automobile Bodily Injury   Carriers that must provide
 and Property Damage Liability            proof of liability insurance
 Certificate of Insurance (BMC-91 or      meeting the minimum levels of
 BMC-91X).                                financial responsibility.
Motor Carrier Records Change (MCSA-      Carriers reinstating operating
 5889).                                   authority.
Request for Revocation of Authority      Carriers voluntarily revoking
 Granted (OCE-46).                        operating authority.
Application for Motor Passenger Carrier  Carriers with an existing USDOT
 Authority (OP-1(P)).                     number wishing to expand to an
                                          operation requiring operating
                                          authority.
------------------------------------------------------------------------

    Tables 2 and 3 display the paperwork burden of these forms to 
private entities and to the Government, respectively. These estimates 
are based on the Information Collection Request (ICR) supporting 
statements associated with each form. For example, Table 2 shows that 
Forms BMC-91 and BMC-91X are estimated to take 10 minutes to complete 
by an insurance claims and policy processing clerk at a wage rate \7\ 
of $39.36, leading to a paperwork burden of $7 (10 minutes x $39.36 = 
$7).<SUP>8 9</SUP>
---------------------------------------------------------------------------

    \7\ DOL, BLS. Occupational Employment and Wage Statistics 
(OEWS). National. May 2022. 43-9041 Insurance Claims and Policy 
Processing Clerks. Available at https://www.bls.gov/oes/current/oes439041.htm (accessed Sept. 1, 2023).
    \8\ This estimate is based on the calculations used in the ICR 
titled, ``Financial Responsibility Motor Carriers, Freight 
Forwarders and Brokers,'' covered by OMB Control Number 2126-0017.
    \9\ The supporting statement for the ``Financial Responsibility 
Motor Carriers, Freight Forwarders and Brokers'' ICR estimates 
Government costs for Forms BMC-91 and BMC-91X at $0, as they are 
filed electronically.

                                   Table 2--Paperwork Costs to Private Sector
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
                                                     Hours to
            Paperwork                  Wage         submit form    Cost per form    Filing fee      Total cost
----------------------------------------------------------------------------------------------------------------
Forms BMC-91 or BMC-91X by                $39.36            0.17              $7  ..............              $7
 insurance claims processer.....
Form MCSA-5889 by office clerk..           31.99            0.25               8             $80              88

[[Page 13990]]

 
Form OCE-46 by office clerk.....           31.99            0.25               8  ..............               8
Form OP-1(P) by office clerk....           31.99               2              64             300             364
----------------------------------------------------------------------------------------------------------------
Estimates may not total due to rounding.


                                     Table 3--Paperwork Costs to Government
                                                     [2023$]
----------------------------------------------------------------------------------------------------------------
                                                                   GS-9, Step 5      Hours to
                            Paperwork                                  wage        process form    Cost per form
----------------------------------------------------------------------------------------------------------------
Form MCSA-5889..................................................          $73.71            0.25             $18
Form OCE-46.....................................................           73.71            0.25              18
Form OP-1(P)....................................................           73.71             6.5             479
----------------------------------------------------------------------------------------------------------------
Estimates may not total due to rounding.

    FMCSA computes its estimates of labor costs using data gathered 
from several sources. Labor costs comprise wages, fringe benefits, and 
overhead. Fringe benefits include paid leave, bonuses and overtime pay, 
health and other types of insurance, retirement plans, and legally 
required benefits (Social Security, Medicare, unemployment insurance, 
and workers compensation insurance). Overhead includes any expenses to 
a firm associated with labor that are not part of employees' 
compensation; this typically includes many types of fixed costs of 
managing a body of employees, such as management and human resource 
staff salaries or payroll services. The economic costs of labor to a 
firm should include the costs of all forms of compensation and labor-
related expenses. For this analysis, costs of labor to a firm have been 
calculated relative to total compensation (base wages, plus fringe 
benefits, plus overhead).
    The primary source for industry wages is the median hourly wage 
data (May 2022) from the U.S. Department of Labor (DOL), Bureau of 
Labor Statistics (BLS), Occupational Employment and Wage Statistics 
(OEWS).\10\
---------------------------------------------------------------------------

    \10\ DOL, BLS. Occupational Employment and Wage Statistics 
(OEWS). National. May 2022. Available at: https://www.bls.gov/oes/current/oes_nat.htm (accessed Sept. 1, 2023).
---------------------------------------------------------------------------

    BLS does not publish data on fringe benefits for specific 
occupations, but it does for the broad industry groups in its Employer 
Costs for Employee Compensation release. For office clerk employees, 
this analysis uses an average hourly wage of $28.89 and average hourly 
benefits of $14.85 for private industry workers in ``transportation and 
warehousing'' \11\ to estimate that fringe benefits are equal to 51.4 
percent ($14.85 / $28.89) of wages. For insurance claims processors, 
this RIA uses an average hourly wage of $37.31 and average hourly 
benefits of $18.92 for private industry workers in ``financial 
activities'' \12\ to estimate that fringe benefits are equal to 50.7 
percent ($18.92 / $37.31) of wages.
---------------------------------------------------------------------------

    \11\ DOL, BLS. Table 4: Employer costs for Employee Compensation 
for private industry workers by occupation and industry group, Dec 
2022. Available at: https://www.bls.gov/news.release/archives/ecec_03172023.htm (accessed Sept. 1, 2023).
    \12\ Ibid.
---------------------------------------------------------------------------

    For estimating the overhead rates on wages, the Agency used 
industry data gathered for the Truck Costing Model developed by the 
Upper Great Plains Transportation Institute, North Dakota State 
University as a proxy for the overhead cost of employees in the 
transportation intermediary and surety and trustee industries.\13\ 
Research conducted for this model found an average cost of $0.107 per 
mile of commercial motor vehicle operation for management and overhead, 
and $0.39 per mile for labor, indicating an overhead rate of 27 percent 
(27 percent = $0.107 / $0.39, rounded to the nearest whole percent).
---------------------------------------------------------------------------

    \13\ Berwick, Farooq. Truck Costing Model for Transportation 
Managers. North Dakota State University. Upper Great Plains 
Transportation Institute. August 2003. Appendix A, pp. 42-47. 
Available at: https://www.ugpti.org/resources/reports/downloads/mpc03-152.pdf (accessed Jan. 5, 2024).
---------------------------------------------------------------------------

    It is assumed that FMCSA reviewers will be Federal government 
employees located in the Washington, DC region at the GS-9 Step 5 wage 
rate.\14\ OPM does not publish annual rates that include fringe 
benefits or overhead. OMB does publish an object class analysis of the 
budget of the U.S. Government. The Object Class Analysis estimates 
that, in 2021, DOT spent $6,351 million in employee compensation and 
$2,840 million in employee benefits. FMCSA estimates a fringe benefit 
rate of 45 percent ($2,840 / $6,351) for FMCSA personnel. FMCSA uses 
the DOT Volpe Center overhead rate of 64 percent for Federal 
personnel.\15\ The Volpe Center is a Federal fee-for-service research 
and innovation center in the DOT. Unlike most Federal agencies, Volpe 
receives no direct appropriation from Congress and must cover direct 
and indirect expenses through agreements with project 
sponsors.<SUP>16 17</SUP> These indirect costs are recovered through 
the overhead rate charged on direct labor costs. Volpe employees are 
compensated according to the Federal locality pay tables used for all 
Federal employees and their labor costs include the same employee 
benefits. Therefore, FMCSA believes that the overhead rate for Volpe 
personnel is similar to the rate for all DOT personnel.
---------------------------------------------------------------------------

    \14\ OPM Pay & Leave Salaries & Wages. Salary Table 2023-DCB, 
Hourly Basic (B) Rates by Grade and Step. Available at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/23Tables/html/DCB_h.aspx (accessed Sept. 5, 2023).
    \15\ DOT, Volpe Center. Volpe Project Costs. Available at: 
https://www.volpe.dot.gov/work-with-us/volpe-project-costs (accessed 
Jan. 4, 2024).
    \16\ DOT, Volpe Center. How to Initiate Work. Available at: 
https://www.volpe.dot.gov/work-with-us/how-initiate-work (accessed 
Jan. 4, 2024).
    \17\ DOT, Volpe Center. Volpe Project Costs. Available at: 
https://www.volpe.dot.gov/work-with-us/volpe-project-costs (accessed 
Jan. 4, 2024).

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

[[Page 13991]]

Insurance
    In addition to submitting forms to FMCSA, providers of recreational 
activities wishing to maintain a valid operating authority registration 
must also have proof of liability insurance filed with FMCSA. The 
Agency estimates that such liability insurance currently costs entities 
an average of $190 per month for one vehicle, or $2,280 per year ($190 
x 12 = $2,280).\18\ Using a range of fleet sizes for illustrative 
purposes, Table 4 presents the estimated costs currently associated 
with maintaining liability insurance by fleet size.
---------------------------------------------------------------------------

    \18\ Insuranks Online Insurance Comparison Marketplace. https://www.insuranks.com/commercial-van-insurance (accessed Sept. 12, 
2023). These estimates are quoted from 12 different insurance 
companies, including Geico, Progressive, State Farm, and others. The 
monthly quotes were summed and then divided by 12 to obtain an 
estimated monthly average for the industry: ($115 + $120 + $130 + 
$183 + $165 + $180 + $195 + $210 + $221 + $232 + $254 + $270) / 12 = 
$190.

                               Table 4--Current Insurance Estimates by Fleet Size
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
                  Number of vehicles in fleet                       Monthly premium           Yearly premium
----------------------------------------------------------------------------------------------------------------
1.............................................................                     $190                   $2,280
5.............................................................                      950                   11,400
10............................................................                    1,900                   22,800
----------------------------------------------------------------------------------------------------------------

Exemption Use Scenarios for Analyzing Carrier Costs
    The following four scenarios build on the forms and insurance cost 
analyses detailed above and examine how the impact of this rule on 
carrier costs may vary under different exemption use conditions. The 
scenarios are an increase in exemption use by carriers, a decrease in 
exemption use by carriers, no change in exemption use, and exemption 
use by new carriers entering the industry.
Scenario One: Increase in Exemption Use
    Scenario One includes providers of recreational activities that 
have been eligible for the operating authority exemption established by 
section 23012 of the IIJA in 2021 but are not utilizing it due to the 
definitional ambiguity of recreational activities. If there are such 
carriers, after publication of this final rule they will understand 
they are classified as providers of recreational activities and are, 
therefore, eligible for this exemption. This would lead to an 
incremental increase in the number of operational authority exemptions 
being used relative to the baseline. As explained in detail below, 
these carriers will be impacted in different ways by the following 
costs and cost savings: financial responsibility compliance costs, 
operating authority registration fees, and paperwork costs.
    Carriers under Scenario One that are currently maintaining their 
operating authority registration year-round would experience cost 
savings associated with maintaining financial responsibility. In the 
NPRM, the Agency invited the public to provide additional information 
on the scenarios presented in the RIA, and the estimated insurance 
premiums. While no data were provided on these estimates, NAMIC 
suggested that the Agency further research the availability of 
insurance policies that provide coverage on a monthly basis, and 
whether States would permit similar staggering of required insurance 
coverage.
    As detailed above in section V.B. Comments and Responses, based on 
the information gathered and the Agency's experience administering the 
relevant regulations, FMCSA believes it is possible for a motor carrier 
providing recreational activities on a seasonal basis to carry an 
insurance policy during its operating season, terminate the policy at 
the end of the season, and obtain a new policy at the beginning of its 
next operating season.\19\ The Agency declines to make any 
modifications to this analysis based on this comment.
---------------------------------------------------------------------------

    \19\ For example, Progressive offers policyholders the option to 
adjust coverage based on seasonal changes (Progressive Commercial 
Auto Insurance, available at https://www.progressivecommercial.com/commercial-auto-insurance/ (accessed Sept. 20, 2023)).
---------------------------------------------------------------------------

    Regarding the second part of NAMIC's comment, the Agency concurs 
that the degree of insurance cost savings is dependent on several 
factors, including other Federal or State insurance requirements. FMCSA 
amends this RIA by removing quantified estimates of insurance cost 
savings and acknowledging the varying impacts State insurance 
requirements will have on the degree of cost savings.
    As described above, FMCSA estimates average monthly insurance 
premiums of $190 per vehicle. The Agency maintains that certain motor 
carriers will experience insurance cost savings; however, the 
quantified amount of those savings may be offset by the need to satisfy 
other Federal or State insurance requirements. Motor carriers that do 
not have to meet other Federal or State insurance requirements would 
save on insurance costs during months they are not in operation.
    There may also be cost savings as a result of avoided insurance-
related administrative requirements. Currently, carriers must choose an 
insurance plan or other acceptable form of financial responsibility, 
and have proof filed with FMCSA whenever they apply for or reinstate 
operating authority. The Agency estimates that it takes carriers 8 
hours to research and identify which insurance company, financial 
surety, or bond provider they will use. Assuming this task is performed 
by an office clerk, this activity is estimated to cost each carrier 
$256 ($31.99 x 8 hours = $256).\20\
---------------------------------------------------------------------------

    \20\ DOL, BLS. Occupational Employment and Wage Statistics 
(OEWS). National. May 2022. 43-4071 Office Clerks, General. 
Available at: https://www.bls.gov/oes/current/oes434071.htm 
(accessed Sept. 9, 2023).
---------------------------------------------------------------------------

    As displayed in Table 2, carriers under Scenario One were also 
required to ensure that their financial responsibility provider submit 
Forms BMC-91 or BMC-91X to FMCSA at a cost of $7 per form. These 
administrative requirements for insurance were no longer required after 
the enactment of the IIJA in 2021; therefore, the definitional 
clarification in this rule may lead to cost savings of $256 to the 
carrier and $7 to the insurance company.
    Some carriers under Scenario One were filing Form OCE-46 to 
voluntarily revoke their operating authority registrations during the 
off-season months so that they did not need to maintain insurance at 
FMCSA's minimum prescribed levels during those months. To resume 
operations, the providers were then required to submit Form MCSA-5889 
to reinstate their operating authority registrations during the months 
when they were operating. As displayed in Tables 2 and 3, it is 
estimated to cost $8 to submit Form

[[Page 13992]]

MCSA-5889, plus a fee of $80 to carriers, and $18 in costs to 
FMCSA.\21\ Form OCE-46 is also estimated to cost $8 per carrier and $18 
for FMCSA processing time.\22\ As a result of this rule, if there are 
carriers under this scenario, they would no longer be subject to the 
costs associated with submitting Form MCSA-5889 or Form OCE-46.
---------------------------------------------------------------------------

    \21\ This estimate is based on the calculations used in the ICR 
titled, ``Motor Carrier Records Change Form'' (Form MCSA-5889), 
covered by OMB Control Number 2126-0060. The cost of a paper 
submission is $7 and the cost of an electronic submission is $0.
    \22\ This estimate is based on the calculations used in the ICR 
titled ``Request for Revocation of Authority Granted,'' covered by 
OMB Control Number 2126-0018.
---------------------------------------------------------------------------

Scenario Two: Decrease in Exemption Use
    It is also possible that this rule will limit the use of this 
exemption for certain carriers. Because neither FMCSA nor Congress 
provided a definition of recreational activities, there may be carriers 
that incorrectly believed they are providers of recreational 
activities, but upon issuance of this rule, would realize they are not. 
These carriers may currently be incorrectly utilizing this exemption 
and revoking their operating authority when they were not eligible to 
do so. Therefore, if such carriers exist, they may incur a cost of $88 
to submit Form MCSA-5889 as a result of this rulemaking for 
reinstatement of their operating authority (Table 2). They would also 
need to resume paying for financial responsibility in order to maintain 
valid operating authority. Illustrative examples of possible insurance-
related costs are displayed in Tables 4 and 5.
Scenario Three: No Incremental Change in Exemption Use
    There may also be eligible carriers that correctly interpreted 
Congress' intent and have been utilizing the exemption correctly since 
the IIJA's enactment. These carriers are not expected to be impacted by 
this rule relative to the baseline. They have already gone through the 
steps of voluntarily revoking their operating authority with FMCSA, are 
maintaining financial responsibility only while in operation, and are 
not paying fees or completing paperwork associated with maintaining 
operating authority.
Scenario Four: New Providers
    This rule may also affect eligible providers considering engaging 
in providing recreational activities in the future. If there are new 
carriers considering entering this field that were not aware of the 
IIJA exemption, they would no longer need to account for the following 
costs as a result of this rule: year-round financial responsibility 
premiums required by FMCSA, financial responsibility-related 
administrative costs, and operating authority fees and paperwork.
    Prior to the enactment of the IIJA, new providers of recreational 
activities had to submit the ``Application for Motor Passenger Carrier 
Authority'' (Form OP-1(P)).\23\ The Agency estimates that this form 
costs $64 with a $300 fee for carriers, and $479 in Government costs 
(Tables 2 and 3, respectively).\24\ Additionally, as described in the 
Financial Responsibility under Scenario One section, the avoided 
insurance-related administrative costs would be $7 for insurance 
companies and $256 for carriers. An illustrative example of potential 
avoided insurance premium costs is presented in Table 5.
---------------------------------------------------------------------------

    \23\ Applicants that have never held a USDOT number or any other 
registration issued by FMCSA must file the URS online application 
(Form MCSA-1) to obtain a USDOT number and register for operating 
authority.
    \24\ This estimate is based on calculations used in the ICR 
titled ``Licensing Applications for Motor Carrier Operating 
Authority,'' covered by OMB Control Number 2126-0016.
---------------------------------------------------------------------------

Government Costs
    In addition to the cost to carriers analyzed in the four scenarios 
above, this rule may have government costs. The changes implemented by 
this rule will not require additional training for enforcement 
personnel. The Agency expects that the definitional clarification set 
forth in this rule will be communicated to FMCSA personnel and the 
Agency's State-based enforcement partners through existing means, such 
as policy updates and ongoing training. The Agency will be impacted by 
the costs and cost savings associated with this rule, as outlined in 
Table 3 ($479 for Form OP-1(P), $18 for Form OCE-46 and Form MCSA-
5889).
Benefits
    The affected entities are providers of recreational activities that 
typically consist of physically demanding outdoor experiences or 
excursions that do not have transportation as an integral part of the 
activity itself. Overall, the outdoor recreation economy accounted for 
1.9 percent ($454 billion) of current-dollar gross domestic product 
(GDP) for the nation in 2021.\25\ Hawaii, Montana, Vermont, Alaska, and 
Maine are among the States where outdoor recreation as a percent of 
that States' GDP ranks the highest. For example, in 2021, outdoor 
recreation accounted for $4.4 billion of Hawaii's $91.1 billion overall 
GDP, or 4.8 percent--the highest proportion of any State. In terms of 
actual levels, the States that produced the highest outdoor recreation 
GDP in 2021 were California ($54.7 billion), Florida ($41.9 billion), 
and Texas ($37.5 billion).
---------------------------------------------------------------------------

    \25\ DOL, Bureau of Economic Analysis (BEA). BEA Data, Special 
Topics, Outdoor Recreation Satellite Account, U.S. and States, 2021. 
Current release Nov. 9, 2022. Available at https://www.bea.gov/data/special-topics/outdoor-recreation (accessed Sept 13, 2023).
---------------------------------------------------------------------------

    Differences in interpretation between regulated entities and 
enforcement officials may be hindering consistent enforcement 
practices, thereby impacting business-related decisions in providing 
transportation for recreational activities. This rule may resolve this 
information asymmetry by creating a common understanding between FMCSA 
and motor carriers. Because this rule may also lead to an increase in 
exemption use, it will benefit carriers by improving the efficiency of 
their business operations and therefore increase both consumer and 
producer surplus.

B. Congressional Review Act

    This rule is not a major rule as defined under the Congressional 
Review Act (5 U.S.C. 801-808).\26\
---------------------------------------------------------------------------

    \26\ A major rule means any rule that OMB finds has resulted in 
or is likely to result in (a) an annual effect on the economy of 
$100 million or more; (b) a major increase in costs or prices for 
consumers, individual industries, geographic regions, Federal, 
State, or local government agencies; or (c) significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export 
markets (5 U.S.C. 802(4)).
---------------------------------------------------------------------------

C. Regulatory Flexibility Act (Small Entities)

    The Regulatory Flexibility Act of 1980, Public Law 96-354, 94 Stat. 
1164 (5 U.S.C. 601-612), as amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857, March 
29, 1996) and the Small Business Jobs Act of 2010 (Pub. L. 111-240, 124 
Stat. 2504, September 27, 2010), requires Federal agencies to consider 
the effects of the regulatory action on small business and other small 
entities and to minimize any significant economic impact. The term 
small entities comprises small businesses and not-for-profit 
organizations that are independently owned and operated and are not 
dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000. Accordingly, DOT policy requires an 
analysis of the impact of all regulations on small entities, and 
mandates that

[[Page 13993]]

agencies strive to lessen any adverse effects on these businesses.
    FMCSA has not determined whether this final rule will have a 
significant economic impact on a substantial number of small entities. 
Therefore, FMCSA prepared an initial regulatory flexibility analysis 
(IRFA) for the NPRM and a final regulatory flexibility analysis (FRFA) 
for the final rule.
    A FRFA must contain the following:

    1. A statement of the need for, and objectives of, the rule.
    2. A statement of the significant issues raised by the public 
comments in response to the IRFA, a statement of the assessment of 
the agency of such issues, and a statement of any changes made in 
the proposed rule as a result of such comments.
    3. The response of the agency to any comments filed by the Chief 
Counsel for Advocacy of the Small Business Administration (SBA) in 
response to the proposed rule, and a detailed statement of any 
change made to the proposed rule in the final rule as a result of 
the comments.
    4. A description of and an estimate of the number of small 
entities to which the rule will apply or an explanation of why no 
such estimate is available.
    5. A description of the projected reporting, recordkeeping, and 
other compliance requirements of the rule, including an estimate of 
the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record.
    6. A description of the steps the agency has taken to minimize 
the significant economic impact on small entities consistent with 
the stated objectives of applicable statutes, including a statement 
of the factual, policy, and legal reasons for selecting the 
alternative adopted in the final rule and why each of the other 
significant alternatives to the rule considered by the agency which 
affect the impact on small entities was rejected.
    7. Description of steps taken by a covered agency to minimize 
costs of credit for small entities.

    1. A statement of the need for, and objectives of, the rule.
    Section 23012 of the IIJA amended 49 U.S.C. 13506 by adding a new 
exemption in paragraph (b)(4) from the operating authority registration 
requirements. FMCSA is adding a new regulatory section incorporating 
that statutory exemption and also including a definition for the exempt 
operations. The exemption from operating authority registration applies 
to motor carriers operating a motor vehicle designed or used to 
transport between 9 and 15 passengers (including the driver) whether 
operated alone or with a trailer attached to the transport vehicle, if 
the motor vehicle is operated by a person that provides recreational 
activities and the transportation is provided within a 150 air-mile 
radius of the location at which passengers initially boarded the motor 
vehicle at the outset of the trip. The new statutory exemption did not 
include a definition of recreational activities, creating some 
ambiguity in the exemption's applicability. The Agency is codifying the 
exemption in regulation and removing ambiguity by defining recreational 
activities.
    2. A statement of the significant issues raised by the public 
comments in response to the IRFA, a statement of the assessment of the 
agency of such issues, and a statement of any changes made in the 
proposed rule as a result of such comments.
    The public comments raised no significant issues in response to the 
IRFA. The Agency received four comments from AWM, NAMIC, the Vehicle 
Associations, and a private citizen.
    In response to the Vehicle Associations' comment, the Agency is 
modifying the definition of recreational activities in Sec.  372.107 to 
include off-highway vehicle driving and riding in the non-exhaustive 
list of activities provided as examples within the definition. As 
detailed in section V. Discussion of Proposed Rulemaking and Comments 
of this final rule, the Vehicle Associations proposed modifying 
recreational activities to include motorized and non-motorized 
activities, such as off-highway vehicle driving and riding. The Agency 
adopts the Vehicle Associations' proposed modification in part.
    As detailed in paragraph 4 of this FRFA, FMCSA provided a wide 
range of North American Industry Classification System (NAICS) codes of 
the recreational activities industry in the IRFA, in order to capture 
all of the potential sectors that providers of recreational activities 
may operate under. The addition of ``off-highway vehicle driving and 
riding'' to the list of examples is intended for additional 
clarification and will not expand the list of affected NAICS codes that 
were estimated in the IRFA, as presented in Table 6.
    As described in section IX.A Regulatory Analyses, the Agency's 
preliminary RIA included quantified estimates of potential insurance 
cost savings, among other potential cost savings, for eligible motor 
carriers and the Agency invited the public to provide additional 
information on these estimates. While no data were provided as to the 
estimated premiums, NAMIC suggested that the Agency further research 
the availability of insurance policies that provide coverage on a 
monthly basis. The Agency maintains that certain motor carriers may 
save on insurance costs as a result of this rule, depending on their 
particular circumstances as detailed in section IX.A, but the Agency 
removes the quantified estimates of that savings from the RIA.
    The Agency concurs that the degree of insurance cost savings is 
dependent on several factors, including other Federal or State 
insurance requirements. Therefore, FMCSA amends this RIA by removing 
quantified estimates of insurance cost savings and acknowledging the 
varying impacts State insurance requirements will have on the degree of 
cost savings. The quantified amount of those savings may be offset by 
the need to satisfy other Federal or State insurance requirements. 
Motor carriers that do not have to meet other Federal or State 
insurance requirements would save on insurance costs during months they 
are not in operation.
    The remaining comments from AWM and the private citizen did not 
relate to the clarification of the recreational activities exemption. 
AWM questioned the magnitude of the burden associated with obtaining 
and maintaining operating authority, and the private citizen raised 
concerns about effects on public land usage. As detailed in section V. 
Discussion of Proposed Rulemaking and Comments, FMCSA is not 
determining through this rulemaking whether there should be an 
exemption from the operating authority registration rules for providers 
of recreational activities. This decision was made by Congress when it 
passed the IIJA in 2021, which created a statutory exemption. FMCSA's 
scope in this rulemaking is only to define the term recreational 
activities and consider the impacts of providing that definition to 
clarify the exemption. The Agency considers the objections to the 
creation of the exemption outside the scope of the rule and declines to 
make any changes to the rule based on them.
    3. The response of the agency to any comments filed by the Chief 
Counsel for Advocacy of the SBA in response to the proposed rule, and a 
detailed statement of any change made to the proposed rule in the final 
rule as a result of the comments.
    The Chief Counsel for Advocacy of the SBA filed no comments to the 
proposed rule. Thus, FMCSA has nothing to respond to from the Chief 
Counsel for Advocacy of the SBA.
    4. A description of and an estimate of the number of small entities 
to which the rule will apply or an explanation of why no such estimate 
is available.
    Small entity is defined in 5 U.S.C. 601. Section 601(3) defines a 
small entity as having the same meaning as

[[Page 13994]]

small business concern under section 3 of the Small Business Act. This 
includes any small business concern that is independently owned and 
operated and is not dominant in its field of operation. Section 601(4), 
likewise includes within the definition of small entities not-for-
profit enterprises that are independently owned and operated and are 
not dominant in their fields of operation. Additionally, section 601(5) 
defines small entities as governments of cities, counties, towns, 
townships, villages, school districts, or special districts with 
populations less than 50,000.
    This final rule affects motor carriers operating a motor vehicle 
designed or used to transport between 9 and 15 passengers (including 
the driver) whether operated alone or with a trailer attached to the 
transport vehicle, if the motor vehicle is operated by a person that 
provides recreational activities and the transportation is provided 
within a 150 air-mile radius of the location at which passengers 
initially boarded the motor vehicle at the outset of the trip. 
Providers of recreational activities affected by this rule operate 
under many different NAICS \27\ codes with differing size standards. 
The SBA has released updated small entity size standards since the 
publication of the IRFA. The new size standards became effective March 
17, 2023.\28\ FMCSA has updated the estimates and size standards in 
this FRFA where needed.
---------------------------------------------------------------------------

    \27\ More information about NAICS is available at http://www.census.gov/naics (accessed Sept. 13, 2023).
    \28\ SBA Table of Small Business Size Standards Matched to NAICS 
effective Mar. 17, 2023, located at https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf (accessed Sept. 13, 2023).
---------------------------------------------------------------------------

    In the IRFA for the proposed rule, FMCSA provided a wide range of 
NAICS codes in the recreational activities industry, in order to 
capture all of the potential NAICS codes that providers of recreational 
activities may operate under. In doing so, FMCSA highlighted many 
entities that perform various other functions beyond transporting 
passengers to and from recreational activities. The Agency also 
requested public comment on the NAICS codes analyzed in the IRFA but 
did not receive any such comments. Therefore, the Agency assumes the 
NAICS codes analyzed in the IRFA are representative of the composition 
of the affected industries and is retaining those codes for the 
purposes of this FRFA.
    As shown in Table 6 below, the SBA size standards for providers of 
recreational activities range from $9 million in revenue per year for 
the All Other Amusement Recreation Industries NAICS national industry, 
to $47 million in revenue per year for Racetracks.

           Table 6--SBA Size Standards for Selected Industries
                         [in millions of 2023$]
------------------------------------------------------------------------
                                                       SBA size standard
        NAICS code         NAICS industry description     in millions
------------------------------------------------------------------------
          Subsector 487--Scenic and Sightseeing Transportation
------------------------------------------------------------------------
487110...................  Scenic and Sightseeing                  $20.5
                            Transportation, Land.
487210...................  Scenic and Sightseeing                   14.0
                            Transportation, Water.
487990...................  Scenic and Sightseeing                   25.0
                            Transportation, Other.
------------------------------------------------------------------------
           Subsector 561--Administrative and Support Services
------------------------------------------------------------------------
561520...................  Tour Operators............               25.0
------------------------------------------------------------------------
Subsector 711--Performing Arts, Spectator Sports, and Related Industries
------------------------------------------------------------------------
711212...................  Racetracks................               47.0
711219...................  Other Spectator Sports....               16.5
------------------------------------------------------------------------
      Subsector 713--Amusement, Gambling, and Recreation Industries
------------------------------------------------------------------------
713910...................  Golf Courses and Country                 19.0
                            Clubs.
713920...................  Skiing Facilities.........               35.0
713940...................  Fitness and Recreational                 17.5
                            Sports Centers.
713990...................  All Other Amusement                       9.0
                            Recreation Industries.
------------------------------------------------------------------------

    FMCSA examined data from the 2017 Economic Census, the most recent 
Census for which data were available, to determine the percentage of 
firms that have revenue at or below SBA's thresholds within each of the 
NAICS industries.\29\ Boundaries for the revenue categories used in the 
Economic Census do not precisely coincide with the SBA thresholds. 
Instead, the SBA threshold generally falls between two different 
revenue categories. However, FMCSA was able to make reasonable 
estimates as to the percent of small entities within each NAICS code.
---------------------------------------------------------------------------

    \29\ U.S. Census Bureau. 2017 Economic Census. Available at 
https://data.census.gov/cedsci/table?q=EC1700&n=48-49&tid=ECNSIZE2017.EC1700SIZEREVEST&hidePreview=true (accessed Sept. 
13, 2023).
---------------------------------------------------------------------------

    The Agency estimates that many entities affected by this rule fall 
under the Scenic and Sightseeing Transportation NAICS subsector (487). 
Firms in this subsector utilize transportation equipment to provide 
recreation and entertainment. These operations are distinct from 
passenger transportation carried out for other types of for-hire 
transportation. The recreational activities involved are local in 
nature, usually involving a same-day return to the point of 
departure.\30\ Industry groups under this subsector include Scenic and 
Sightseeing Transportation, Land (4871), Scenic and Sightseeing 
Transportation, Water (4872), and Scenic and Sightseeing 
Transportation, Other (4879).
---------------------------------------------------------------------------

    \30\ U.S. Census Bureau 2022 NAICS Definition. Available at 
https://www.census.gov/naics/?input=48&year=2022&details=487 
(accessed Sept. 13, 2023).
---------------------------------------------------------------------------

    The Scenic and Sightseeing Transportation, Land NAICS national 
industry (487110) has a revenue size standard of $20.5 million, which 
falls between two Economic Census revenue

[[Page 13995]]

categories, $10 million and $25 million. This industry comprises firms 
engaged in various outdoor excursions, including horse-drawn 
sightseeing rides. The percentages of Scenic and Sightseeing 
Transportation, Land with revenue less than these amounts ranged from 
97 percent to 98 percent. Because the SBA threshold is closer to the 
higher of these two boundaries, FMCSA has assumed that the percent of 
Scenic and Sightseeing Transportation, Land entities that are small 
will be closer to 98 percent and is using that figure.
    For Scenic and Sightseeing Transportation, Water (487210), the $14 
million SBA threshold falls between two Economic Census revenue 
categories, $10 million and $25 million. Entities in this national 
industry are primarily engaged in providing scenic and sightseeing 
transportation on water, such as fishing boat charter operation. The 
percentages of Scenic and Sightseeing Transportation, Water with 
revenue less than these amounts ranged from 97 percent to 99 percent. 
Because the SBA threshold is closer to the lower of these two 
boundaries, FMCSA has assumed that the percent of these entities that 
are small will be closer to 97 percent and is using that figure.
    Scenic and Sightseeing Transportation, Other (487990) focuses on 
all other scenic and sightseeing transportation, such as hot air 
balloon rides and glider excursions. The SBA size standard for this 
national industry is $25 million. The $25 million SBA threshold falls 
between two Economic Census revenue categories, $10 million and $25 
million. The percentages of these entities with revenue less than these 
amounts were 93 percent and 98 percent. Because the SBA threshold 
coincides with the higher of these two boundaries, FMCSA has assumed 
that the percent of these providers that are small will be closer to 98 
percent and is using that figure.
    Firms falling under the Travel Arrangement and Reservation Services 
industry group (5615) may also be impacted by this NPRM. This industry 
group comprises the Travel Agencies (561510), Tour Operators (561520), 
and Convention and Visitors Bureaus (561591) national industries.\31\ 
The Agency assumes that providers of recreational activities fall under 
the Tour Operators national industry.
---------------------------------------------------------------------------

    \31\ US Census Bureau 2022 NAICS Definition. Available at 
https://www.census.gov/naics/?input=56&year=2022&details=5615 
(accessed Sept. 14, 2023).
---------------------------------------------------------------------------

    Tour Operators (561520) focuses on arranging and assembling tours, 
including travel or wholesale tour operators. The SBA size standard for 
this national industry is $25 million, which falls between two Economic 
Census revenue categories, $25 million and $100 million. The 
percentages of Tour Operators with revenue less than these amounts were 
92 percent and 100 percent. The Agency presents a high-end estimate of 
100 percent due to limitations in Economic Census data availability. 
Revenue data for firms with revenue less than $100,000, which would be 
considered small, are suppressed by the Economic Census to avoid 
disclosing for individual companies. Because the Agency is unable to 
ascertain the revenue for the suppressed firms, the high-end estimate 
assumes that all such firms fall under the $25 million SBA threshold 
and would be considered small. The low-end estimate assumes the 
suppressed firms are not small. Because the SBA threshold is closer to 
the lower of these two boundaries, FMCSA has assumed that the percent 
of Tour Operators that is small will be closer to 92 percent and is 
using that figure.
    The Agency estimates that many providers of recreational activities 
affected by this NPRM would also fall under the Arts, Entertainment, 
and Recreation sector (71). This sector includes a wide range of firms 
operating facilities that meet varied cultural, entertainment, and 
recreational interests of patrons.\32\ Subsectors under this group 
include Performing Arts, Spectator Sports, and Related Industries 
(711), Amusement, Gambling, and Recreational Industries (713), and 
others.
---------------------------------------------------------------------------

    \32\ US Census Bureau 2022 NAICS Definition. Available at 
https://www.census.gov/naics/?input=71&year=2022&details=71 
(accessed Sept. 5, 2023).
---------------------------------------------------------------------------

    The industry groups under the Spectator Sports and Related 
Industries (711) subsector cover Spectator Sports (7112). Spectator 
Sports includes the Racetracks (711212) and Other Spectator Sports 
(711219) national industries.
    Racetracks (711212) focuses on firms operating racetracks without 
casinos, such as auto, motorcycle, snowmobile, and horse races. The SBA 
size standard for this national industry is $47 million. The $47 
million SBA threshold falls between two Economic Census revenue 
categories, $25 million and $100 million. The percentages of these 
entities with revenue less than these amounts were 83 percent and 100 
percent.\33\ Because the SBA threshold is closer to the lower of these 
two boundaries, FMCSA has assumed that the percent of Racetracks 
entities that are small will be closer to 83 percent and is using that 
figure.
---------------------------------------------------------------------------

    \33\ The Agency presents a high-end estimate of 100 percent due 
to limitations in Economic Census data availability. Revenue data 
for firms with revenue less than $100,000, which would be considered 
small, are suppressed by the Economic Census to avoid disclosing for 
individual companies. Because the Agency is unable to ascertain the 
revenue for the suppressed firms, the high-end estimate assumes that 
all such firms fall under the $47 million SBA threshold. The low-end 
estimate assumes the suppressed firms are not small.
---------------------------------------------------------------------------

    Other Spectator Sports (711219) focuses on independent athletes, 
owners of racing participants (such as cars, dogs, and horses), and 
firms engaged in specialized services in support of said participants. 
The SBA size standard for this national industry is $16.5 million, 
which falls between two Economic Census revenue categories, $10 million 
and $25 million. The percentages of these entities with revenue less 
than these amounts were 82 percent and 100 percent.\34\ Because the SBA 
threshold is closer to the lower of these two boundaries, FMCSA has 
assumed that the percent of Other Spectator Sports entities that are 
small will be closer to 82 percent and is using that figure.
---------------------------------------------------------------------------

    \34\ The Agency presents a high-end estimate of 100 percent due 
to limitations in Economic Census data availability. Revenue data 
for firms with revenue less than $100,000, which would be considered 
small, are suppressed by the Economic Census. Because the Agency is 
unable to ascertain the revenue for the suppressed firms, the high-
end estimate assumes that all such firms fall under the $16.5 
million SBA threshold. The low-end estimate assumes the suppressed 
firms are not small.
---------------------------------------------------------------------------

    The industry groups under the Amusement, Gambling, and Recreation 
Industries (713) subsector include Amusement Parks and Arcades (7131), 
Gambling Industries (7132), and Other Amusement and Recreation 
Industries (7139).\35\ The Agency estimates the entities affected by 
this NPRM would fall into the third industry group, Other Amusement and 
Recreation Industries (7139). This group, as detailed below, covers 
firms operating golf courses and country clubs, skiing facilities, and 
all other amusement and recreation activities.\36\
---------------------------------------------------------------------------

    \35\ US Census Bureau 2022 NAICS Definition. Available at 
https://www.census.gov/naics/?input=71&year=2022&details=713 
(accessed Sept. 5, 2023).
    \36\ US Census Bureau 2022 NAICS Definition. Available at 
https://www.census.gov/naics/?input=71&year=2022&details=7139 
(accessed Sept. 5, 2023).
---------------------------------------------------------------------------

    Entities falling under Golf Courses and Country Clubs (713910) 
primarily engage in operating such facilities, and providing food and 
beverage services, equipment rental, or golf instruction. The SBA size 
standard for this national industry is $19 million, which falls between 
two Economic Census revenue categories, $10 million and $25 million. 
The percentages of Golf Courses and

[[Page 13996]]

Country Clubs with revenue less than these amounts were 95 percent and 
99 percent. In the IRFA, FMCSA presented the estimated percent of small 
entities using a low-end estimate of 95 percent. However, the SBA size 
standard for this national industry increased from $16.5 million in 
2022 to $19 million in 2023, making the new threshold closer to the 
higher of the revenue boundaries. Therefore, FMCSA has assumed that the 
percent of these entities that are small will be closer to 99 percent 
and is using that figure in the FRFA.
    Skiing Facilities (713920) industries primarily operate downhill, 
cross country, or related skiing areas, and provide food and beverage 
services, equipment rental, and ski instruction. The SBA size standard 
for this national industry is $35 million, which falls between two 
Economic Census revenue categories, $25 million and $100 million. The 
percentages of Skiing Facilities with revenue less than these amounts 
were 93 percent and 98 percent.\37\ Because the SBA threshold is closer 
to the lower of these two boundaries, FMCSA has assumed that the 
percent of these facilities that are small will be closer to 93 percent 
and is using that figure.
---------------------------------------------------------------------------

    \37\ The Agency presents a high-end estimate of 98 percent which 
includes assumptions about limitations in Economic Census data. Some 
revenue data for firms that would be considered small (revenue 
categories of $100,000 or more and $250,000 to $499,999) are 
suppressed by the Economic Census. Because the Agency is unable to 
ascertain the revenue for the suppressed firms, the high-end 
estimate assumes that all such firms fall under the $35 million SBA 
threshold. The low-end estimate assumes the suppressed firms are not 
small.
---------------------------------------------------------------------------

    The Agency estimates that the majority of entities affected by this 
Final Rule would fall under the All Other Amusement Recreation 
Industries (713990) national industry. This includes whitewater 
rafting, hunting, horseback riding stables, boating clubs, canoeing, 
archery and shooting ranges, hiking, and others. The SBA size standard 
for this national industry is $9 million. The $9 million SBA threshold 
falls between two Economic Census revenue categories, $5 million and 
$10 million. The percentages of these providers with revenue less than 
these amounts were 60 percent and 99.6 percent. The Agency estimates a 
wide range in estimates due to limitations in Economic Census data for 
this NAICS category. Specifically, of the 12,688 firms in this 
industry, 12,631 have revenue between $100,000 and $10 million. 
However, data on small entities with revenue under $250,000 are 
suppressed. There are 7,490 small entities (59 percent) with revenue 
between $250,000 and $5 million, and 139 firms with revenue between $5 
million and $10 million (1.1 percent). Of the 12,688 firms in All Other 
Amusement Recreation Industries, there are 5,002 firms without revenue 
data (39.4 percent). The high-end estimate assumes all such firms are 
small (99.6 percent) and FMCSA uses that figure.
    Table 7 below shows the complete estimates of the number of small 
entities within the national industries affected by this rule.

                                 Table 7--Estimates of Numbers of Small Entities
----------------------------------------------------------------------------------------------------------------
                                                                   Total number      Number of    Percent of all
            NAICS code                      Description              of firms     small entities       firms
----------------------------------------------------------------------------------------------------------------
487110...........................  Scenic and Sightseeing                    520             512              98
                                    Transportation, Land.
487210...........................  Scenic and Sightseeing                  1,129           1,097              97
                                    Transportation, Water.
487990...........................  Scenic and Sightseeing                    169             165              98
                                    Transportation, Other.
561520...........................  Tour Operators...............           2,175           1,991              92
711212...........................  Racetracks...................             299             248              83
711219...........................  Other Spectator Sports.......           1,916           1,577              82
713910...........................  Golf Courses and Country                8,076           7,712              99
                                    Clubs.
713920...........................  Skiing Facilities............             203             189              93
713990...........................  All Other Amusement                    12,688           7,629              60
                                    Recreation Industries.
----------------------------------------------------------------------------------------------------------------

    5. A description of the reporting, recordkeeping, and other 
compliance requirements of the final rule, including an estimate of the 
classes of small entities subject to the requirements and the type of 
professional skills necessary for preparation of the report or record.
    This rule will not result in new recordkeeping requirements.
    6. A description of the steps the agency has taken to minimize the 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of the 
factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each of the other significant 
alternatives to the rule considered by the agency which affect the 
impact on small entities was rejected.
    Given that the recreational activities exemption was statutorily 
mandated, FMCSA did not have an alternative or discretion as to whether 
to adopt the exemption but did consider whether to clarify a definition 
of the term recreational activities or to remain silent. FMCSA also 
considered the alternative of adding a definition without including 
non-exhaustive examples. However, FMCSA believes that remaining silent 
or proposing a definition without such examples could result in 
confusion or inconsistent enforcement and that it is better to provide 
a definition with examples consistent with the legislative intent to 
minimize any significant economic impact on small entities.
    7. Description of steps taken by a covered agency to minimize costs 
of credit for small entities.
    FMCSA is not a covered agency as defined in section 609(d)(2) of 
the Regulatory Flexibility Act and has taken no steps to minimize the 
additional cost of credit for small entities.

D. Assistance for Small Entities

    In accordance with section 213(a) of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), 
FMCSA wants to assist small entities in understanding this final rule 
so they can better evaluate its effects on themselves and participate 
in the rulemaking initiative. If the final rule will affect your small 
business, organization, or governmental jurisdiction and you have 
questions concerning its provisions or options for compliance, please 
consult the person listed under FOR FURTHER INFORMATION CONTACT.
    Small businesses may send comments on the actions of Federal 
employees who enforce or otherwise determine compliance with Federal 
regulations to the Small Business Administration's Small Business and 
Agriculture Regulatory Enforcement Ombudsman (Office of the National 
Ombudsman, see

[[Page 13997]]

https://www.sba.gov/about-sba/oversight-advocacy/office-national-ombudsman) and the Regional Small Business Regulatory Fairness Boards. 
The Ombudsman evaluates these actions annually and rates each agency's 
responsiveness to small business. If you wish to comment on actions by 
employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a 
policy regarding the rights of small entities to regulatory enforcement 
fairness and an explicit policy against retaliation for exercising 
these rights.

E. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
(UMRA) requires Federal agencies to assess the effects of their 
discretionary regulatory actions. The Act addresses actions that may 
result in the expenditure by a State, local, or Tribal government, in 
the aggregate, or by the private sector of $192 million (which is the 
value equivalent of $100 million in 1995, adjusted for inflation to 
2022 levels) or more in any 1 year. Though this final rule would not 
result in such an expenditure, and the analytical requirements of UMRA 
do not apply as a result, the Agency discusses the effects of this rule 
elsewhere in this preamble.

F. Paperwork Reduction Act

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

G. E.O. 13132 (Federalism)

    A rule has implications for federalism under section 1(a) of E.O. 
13132 if it has ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.''
    FMCSA has determined that this rule will not have substantial 
direct costs on or for States, nor would it limit the policymaking 
discretion of States. Nothing in this document preempts any State law 
or regulation. Therefore, this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Impact 
Statement.

H. Privacy

    The Consolidated Appropriations Act, 2005,\38\ requires the Agency 
to assess the privacy impact of a regulation that will affect the 
privacy of individuals. This rule would not require the collection of 
personally identifiable information (PII).
---------------------------------------------------------------------------

    \38\ Public Law 108-447, 118 Stat. 2809, 3268, note following 5 
U.S.C. 552a (Dec. 4, 2014).
---------------------------------------------------------------------------

    The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies 
and any non-Federal agency that receives records contained in a system 
of records from a Federal agency for use in a matching program.
    The E-Government Act of 2002,\39\ requires Federal agencies to 
conduct a PIA for new or substantially changed technology that 
collects, maintains, or disseminates information in an identifiable 
form. No new or substantially changed technology will collect, 
maintain, or disseminate information as a result of this rule. 
Accordingly, FMCSA has not conducted a PIA.
---------------------------------------------------------------------------

    \39\ Public Law 107-347, sec. 208, 116 Stat. 2899, 2921 (Dec. 
17, 2002).
---------------------------------------------------------------------------

    In addition, the Agency submitted a Privacy Threshold Assessment 
(PTA) to evaluate the risks and effects the proposed rulemaking might 
have on collecting, storing, and sharing personally identifiable 
information. The PTA was adjudicated by DOT's Chief Privacy Officer on 
December 15, 2023.

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

    This rule does not have Tribal implications under E.O. 13175, 
Consultation and Coordination with Indian Tribal Governments, because 
it does not have a substantial direct effect on one or more Indian 
Tribes, on the relationship between the Federal Government and Indian 
Tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian Tribes.

J. National Environmental Policy Act of 1969

    FMCSA analyzed this rule pursuant to the National Environmental 
Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and determined this 
action is categorically excluded from further analysis and 
documentation in an environmental assessment or environmental impact 
statement under FMCSA Order 5610.1 (69 FR 9680), Appendix 2, (6)(b). 
The categorical exclusion (CE) in paragraph (6)(b) covers regulations 
which are editorial or procedural, such as those updating addresses or 
establishing application procedures, and procedures for acting on 
petitions for waivers, exemptions and reconsiderations, including 
technical or other minor amendments to existing FMCSA regulations. The 
requirements in this rule are covered by this CE, there are no 
extraordinary circumstances present, and the action does not have the 
potential to significantly affect the quality of the environment.

List of Subjects in 49 CFR Part 372

    Agricultural commodities, Buses, Cooperatives, Freight forwarders, 
Motor carriers, Moving of household goods, Seafood.
    Accordingly, FMCSA amends 49 CFR chapter III, part 372 as follows:

PART 372--EXEMPTIONS, COMMERCIAL ZONES, AND TERMINAL AREAS

0
1. The authority citation for part 372 continues to read as follows:

    Authority: 49 U.S.C. 13504 and 13506; Pub. L. 105-178, sec. 
4031, 112 Stat. 418; and 49 CFR 1.87.


0
2. Amend Sec.  372.107 by adding paragraph (i) to read as follows:


Sec.  372.107  Definitions.

* * * * *
    (i) Recreational activities. The term ``recreational activities'' 
means activities consisting of an outdoor experience or excursion 
typically of a physical or athletic nature which require transportation 
for the sole purpose of moving customers to another location or 
locations where the outdoor experience or excursion will take place and 
collecting those customers to transport them back to the place of 
initial boarding or another outpost of the motor carrier. Recreational 
activities include but are not limited to hiking, biking, horseback 
riding, canoeing, whitewater rafting, water trails, tubing, skiing, 
snowshoeing, snowmobiling, hunting, fishing, mountain climbing, 
swimming, and off-highway vehicle driving and riding. The term does not 
include any activity:
    (1) for which the activity offered or sold is occurring 
simultaneously with the transportation; or
    (2) for which the transportation is the primary service offered for 
sale.

0
3. Add Sec.  372.113 to read as follows:


Sec.  372.113   Providers of recreational activities.

    Transportation by a motor vehicle designed or used to transport not 
fewer than 9, and not more than 15, passengers (including the driver), 
whether operated alone or with a trailer attached for the transport of 
recreational equipment, is exempted from regulation promulgated 
pursuant to Part B of Title 49 U.S.C. subtitle IV if:
    (a) the motor vehicle is operated by a person that provides 
recreational activities;

[[Page 13998]]

    (b) the transportation is provided within a 150 air-mile radius of 
the location at which passengers initially boarded the motor vehicle at 
the outset of the trip; and
    (c) in the case of a motor vehicle transporting passengers over a 
route between a place in a State and a place in another State, the 
person operating the motor vehicle is lawfully providing transportation 
of passengers over the entire route in accordance with applicable State 
law.

    Issued under authority delegated in 49 CFR 1.87.
Sue Lawless,
Acting Deputy Administrator.
[FR Doc. 2024-03782 Filed 2-23-24; 8:45 am]
BILLING CODE 4910-EX-P


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