Document ID: FMCSA-2008-0235-0012
Agency: fmcsa
Document Type: Rule
Title: Elimination of Route Designation Requirement for Motor Carriers Transporting Passengers over Regular Routes
Posted Date: 2009-01-16T05:00Z

[Federal Register: January 16, 2009 (Volume 74, Number 11)]
[Rules and Regulations]               
[Page 2895-2902]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16ja09-28]                         

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 356, 365, and 374

[Docket No. FMCSA-2008-0235]
RIN 2126-AB16

 
Elimination of Route Designation Requirement for Motor Carriers 
Transporting Passengers Over Regular Routes

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

ACTION: Final rule.

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SUMMARY: FMCSA discontinues the administrative requirement that 
applicants seeking for-hire authority to transport passengers over 
regular routes submit a detailed description and a map of the route(s) 
over which they propose to operate. The Agency will register such 
carriers as regular-route carriers without requiring the designation of 
specific regular routes and fixed end-points. Once motor carriers have 
obtained regular-route, for-hire operating authority from FMCSA, they 
will no longer need to seek additional FMCSA approval in order to 
change or add routes. Each registered regular-route motor carrier of 
passengers will continue to be subject to the full safety oversight and 
enforcement programs of FMCSA and its State and local partners.

DATES: This rule is effective March 17, 2009. The compliance date for 
this rule is July 15, 2009.

FOR FURTHER INFORMATION CONTACT: Mr. David Miller, Regulatory 
Development Division, (202) 366-5370 or by e-mail at: 
FMCSAregs@dot.gov.

SUPPLEMENTARY INFORMATION: 

I. Description of the Rulemaking

    FMCSA is discontinuing the administrative requirement that motor 
carriers must describe specific routes and provide maps of these routes 
when seeking authority to provide regular-route, for-hire 
transportation of passengers in interstate commerce. Except for 
carriers who are public recipients of governmental assistance, regular-
route passenger carriers will be issued motor carrier certificates of 
registration that are not route specific.
    Designation of regular routes in motor carrier operating authority 
is not currently required by statute and administratively discontinuing 
this requirement will streamline the registration process by 
eliminating the need for motor carriers to file new applications when 
seeking to change or expand their routes. It will also benefit new 
entrants by simplifying the OP-1(P) application for operating 
authority. Designation of regular routes is an administrative 
requirement associated with the economic regulation of the passenger 
carrier industry. With the elimination of certain economic regulations 
beginning in 1980, the Agency believes continuing the practice of 
approving applications for changing and adding routes is unnecessary 
and offers no additional safety benefits to the public or the 
commercial passenger carrier community.
    However, the Agency will continue to require public recipients of 
governmental assistance to designate specific routes when applying for 
regular-route authority because 49 U.S.C. 13902(b)(2)(B) permits 
persons to challenge specific regular-route transportation service 
provided by public entities on the ground that authorizing such service 
is not consistent with the public interest. Eliminating the route 
designation requirement in these circumstances would prevent the Agency 
from evaluating proposed transportation services under the public 
interest standard, in violation of its statutory mandate.
    This final rule amends several FMCSA regulations that reference 
authorized routes or points of service in order to make them consistent 
with the Agency's discontinuation of the route designation requirement. 
The OP-1(P) application form will also be changed to eliminate the 
current route-designation and mapping requirements. Because changes to 
the OP-1(P) form must be approved by the Office of Management and 
Budget (OMB), and FMCSA plans to seek approval of additional 
modifications to the form in response to recent legislative changes 
unrelated to route designation requirements, the OMB approval process 
is expected to take several months. As a result, FMCSA will not 
implement the new procedures until 180 days after publication of this 
final rule.

II. Legal Basis for the Rulemaking

    The Motor Carrier Act of 1935 (MCA) (Pub. L. 74-255, 49 Stat. 543, 
Aug. 9, 1935) authorized the Interstate Commerce Commission (ICC) to 
regulate motor carriers by, among other things, issuing certificates of 
operating authority to motor carriers of property and passengers 
operating in interstate commerce. Section 207(a) of the MCA stated that 
``no certificate shall be issued to any common carrier of passengers 
for operations over other than a regular route or regular routes, and 
between fixed termini [end-points], except as such carriers may be 
authorized to engage in special or charter operations.'' Section 208(a) 
of the MCA required that certificates issued to regular-route passenger 
carriers specify the routes, end-points, and intermediate points to be 
served under the certificate. Section 208(b) permitted occasional 
deviations from authorized routes, if permitted by ICC regulations.
    These MCA provisions were subsequently recodified without 
substantive change as 49 U.S.C. 10922(f)(1)-(3). However, they were 
repealed by the ICC Termination Act of 1995 (ICCTA) (Pub. L. 104-88, 
109 Stat. 888, Dec. 29, 1995). The statutory registration requirements 
specific to passenger carriers are now codified at 49 U.S.C. 13902(b). 
Section 103 of the ICCTA retained some of the former registration 
requirements of section 10922 applicable to regular-route passenger 
carriers but eliminated many others, including 49 U.S.C. 10922(f)(1)-
(3).
    The ICCTA also transferred the ICC's authority to issue for-hire 
motor carrier operating authority to the Secretary of Transportation 
(Secretary). Section 101 of the Motor Carrier Safety Improvement Act of 
1999 (Pub. L. 106-159, 113 Stat. 1750, Dec. 9, 1999) (MCSIA) created 
the FMCSA and directed the Administrator of the FMCSA to carry out the 
duties and powers vested in the Secretary by Title 49 United States 
Code, Chapters 133 through 149. These powers include the authority of 
the Secretary, under 49 U.S.C. 13301(a), to prescribe regulations 
governing registration requirements for motor carriers transporting 
passengers in interstate commerce for compensation. In addition to the 
statutory delegation, the Secretary has administratively delegated this 
authority to the FMCSA Administrator under 49 CFR 1.73(a).

[[Page 2896]]

III. Notice of Proposed Rulemaking

    Although the ICCTA no longer required regular-route operating 
authority to specify routes and fixed end-points, FMCSA continued to 
require applicants seeking such authority to submit maps and a detailed 
description of proposed operating route(s) as attachments to the Form 
OP-1(P) application. Carriers proposing to add routes to their 
operating systems were required to file new applications in order to do 
so. Pursuant to Part 365 of Title 49, Code of Federal Regulations 
(CFR), the route descriptions submitted by an applicant were published 
in the FMCSA Register and subject to protests by interested parties. 
The number of protests received has been very small, an average of one 
protest per year between 2003 and 2007.
    On August 7, 2008, FMCSA published a Notice of Proposed Rulemaking 
(NPRM) (73 FR 45929) requesting public comment on its proposal to 
discontinue the route designation requirement and make conforming 
changes to its regulations. FMCSA proposed to henceforth issue motor 
carrier certificates of registration authorizing service as a regular-
route passenger carrier without designating specific regular routes or 
fixed end-points. As a result of this proposal, registered regular-
route passenger carriers would no longer need to submit a new 
application to FMCSA in order to add new routes or change existing 
routes. The Agency asserted that the paperwork and administrative 
burden on both the industry and the Agency would be reduced as a result 
of eliminating the need to file and process multiple applications 
containing detailed routes.
    FMCSA proposed to modify existing certificates of regular-route 
authority to make them consistent with the broader authority that would 
be issued to new entrants pursuant to the final rule in this 
proceeding. Such certificates would supersede any route-specific 
authority issued by FMCSA or its predecessor agencies.
    In order to implement this proposal, FMCSA proposed to amend 
various sections of Title 49 CFR to make them consistent with the 
Agency's proposed registration procedures. These amendments included: 
(1) Removing 49 CFR 356.3, which prescribes the extent to which 
passenger carriers may serve points not located on their ``authorized 
routes''; (2) modifying 49 CFR 365.101, which identifies the types of 
operating authority applications filed with the Agency, to reflect that 
the Agency would no longer grant authority to passenger carriers to 
operate over specific routes; (3) eliminating references to 
``authorized points'' or ``authorized routes'' in 49 CFR 374.303(f) and 
374.311(a); and (4) amending 49 CFR 374.311(b) by removing the 
requirement that carriers file notices of schedule and route changes 
with FMCSA. Regular-route motor passenger carriers would still be 
required to post notices of schedule changes in each affected bus and 
carrier facility for the convenience of their passengers.
    The basis for the NPRM was FMCSA's belief that the route 
designation requirement no longer serves a useful purpose. The 
requirement was enacted primarily to protect existing carriers serving 
particular routes from competition. Subsequent legislative changes 
limited the ability of existing carriers to protest applications based 
on economic grounds and there was no measurable nexus between the route 
designation requirement and motor carrier safety.
    In the NPRM, FMCSA noted that the proposal would result in uniform 
treatment of regular-route motor passenger carriers and passenger 
carriers that provide charter and special transportation (as well as 
property carriers), who need only file a single application in order to 
provide nationwide interstate transportation. Applicants would remain 
subject to the applicable statutory fitness standards in 49 U.S.C. 
13902(a) and potential safety problems would be addressed through new 
entrant safety audits, compliance reviews, or vehicle inspections. The 
Agency believed there was no justification for treating regular-route 
passenger carriers differently from other carriers to ensure their 
compliance with the Federal Motor Carrier Safety Regulations.
    In summary, the Agency concluded that the current route designation 
requirement, and the related requirement that existing registered 
carriers file new applications when adding or changing routes, had no 
discernible safety benefit, yet burdened the industry and the Agency 
with unnecessary paperwork.

IV. Discussion of Comments to the NPRM

    FMCSA received eight comments in response to the NPRM. Commenters 
included three transportation companies--Greyhound Lines, Inc., Coach 
USA, Inc., and Peter Pan Bus Lines, Inc; two labor organizations--the 
Amalgamated Transit Union (ATU) and the Transportation Trades 
Department, AFL-CIO (TTD); one trade association--the American Bus 
Association (ABA); one State regulatory agency--the Missouri Department 
of Transportation, Motor Carrier Services Division (MoDOT); and one 
public interest advocacy group--the Disability Rights Education and 
Defense Fund (DREDF). The commenters opposed the Agency's proposal. The 
three primary objections regarding the proposal were: (1) It would 
adversely impact motor carrier safety; (2) it would prevent meaningful 
implementation of the recently enacted Over-the-Road Bus Transportation 
Accessibility Act of 2007; and (3) it would create serious problems in 
determining the scope of Federal preemption of State authority to 
regulate the intrastate regular-route transportation of passengers.

A. Impact on Motor Carrier Safety

    The six transportation industry-related commenters raised concerns 
regarding motor carrier safety issues. Greyhound urged FMCSA to propose 
procedures that would enable the Agency to conduct a meaningful 
assessment of a passenger carrier's fitness to comply with regulatory 
requirements before allowing it to operate or expand its interstate 
operations. Greyhound agreed there was little need for route 
descriptions under the current system, where applications are rarely 
protested and grants of operating authority are virtually automatic. 
However, Greyhound believed that if FMCSA decides to ``reinstitute'' a 
system where it conducts a thorough investigation of a bus carrier's 
fitness prior to granting operating authority, route descriptions would 
be essential. According to Greyhound, FMCSA must know the specific 
route(s) over which an applicant will operate in order to determine 
whether the applicant has a sufficient number of qualified drivers and 
vehicles, as well as adequate safety management controls, to operate 
safely over these routes. It contended that such an analysis is 
mandated by 49 U.S.C. 13902(a)(1), which requires FMCSA to register a 
person to provide transportation as a motor carrier only if it finds 
the person willing and able to comply with the applicable regulations 
and safety fitness requirements. The ABA and other commenters echoed 
Greyhound's views.
    Along similar lines, Coach USA believed that the application 
process is an important tool in monitoring and enhancing safety 
compliance because it provides an additional incentive for existing 
carriers to maintain compliance. This incentive would be lost if 
carriers are no longer required to file new applications to expand 
their

[[Page 2897]]

operations. Coach USA also believed that FMCSA will have difficulty 
assessing the adequacy of a regular-route carrier's safety program 
during a new entrant safety audit or compliance review unless it knows 
whether the carrier plans to operate in a large geographic area or a 
small one.
    Peter Pan believed that the minimal cost of the route designation 
requirement is outweighed by the benefits of continuing existing 
procedures, which allow knowledgeable parties to raise safety 
compliance concerns by protesting new applications. Peter Pan 
interpreted the NPRM as suggesting that the States will oversee safety 
compliance issues connected with expanded service, and questioned the 
ability of the States to do so adequately. Peter Pan claimed FMCSA has 
not offered any meaningful justification for the proposed change.
    ATU and TTD agreed with Greyhound that disclosure of route 
designations can play a crucial role in enforcing and ensuring 
compliance with safety regulations, since the requirements to operate a 
limited route differ from those necessary to run a nationwide network. 
ATU believed route designations can also assist inspectors in locating 
operators for additional safety audits, inspections and compliance 
reviews, while TTD contended that FMCSA must know the routes of cross-
border bus operations to ensure such carriers comply with safety 
regulations and do not engage in cabotage.
    FMCSA Response:
    FMCSA acknowledges the commenters' concerns about highway safety. 
However, this rulemaking does not affect the applicability of any of 
the Agency's safety regulations intended to prevent crashes and save 
lives. Neither FMCSA nor its predecessor agencies have considered the 
routes over which a passenger carrier proposes to operate when 
investigating the carrier's fitness prior to granting operating 
authority. The fitness standard set forth in 49 U.S.C. 13902(a)(1) 
pertains to a carrier's overall willingness and ability to comply with 
safety and other applicable regulations, not whether the carrier has 
sufficient drivers or equipment to operate over a particular route. 
Accordingly, the statute does not mandate a route-specific safety 
fitness analysis, as claimed by Greyhound. If Congress had intended to 
mandate such an analysis, it presumably would have not eliminated the 
statutory requirement that operating authority specify routes and end 
points. Moreover, although the commenters contend that scrutiny of 
particular routes is important for safety reasons, they do not point to 
a single protest filed with FMCSA or its predecessor agencies alleging 
that an applicant would be unable to operate safely over a specific 
route based on the length or other characteristics of the route.
    While FMCSA recognizes the need to continue to give closer scrutiny 
to passenger carrier applications, it has focused its efforts on 
carriers that try to reinvent themselves as new entities, after 
demonstrating serious safety compliance problems identified through 
compliance reviews, new entrant safety audits and vehicle inspections. 
The Agency believes its resources are more effectively and efficiently 
directed to identifying and taking appropriate action against such 
problem carriers rather than scrutinizing the specific routes carriers 
propose to serve and speculating about their ability to safely operate 
over those routes.
    While the multiple application requirement can theoretically 
provide an incentive for existing carriers to maintain compliance, the 
very small number of applications that are protested indicates that it 
does not serve this purpose in actual practice. Contrary to claims that 
operating authority is granted automatically through a computer-driven 
system, FMCSA provides public notice of all applications and considers 
all legitimate protests.
    While Greyhound claimed, inaccurately, that the Agency's system 
ignored a protest and granted an application, that claim does not 
reflect what actually happened. In that case--No MC-405969, Fung Wah 
Bus Transportation, Inc.--there was a lengthy delay in delivering the 
protest to FMCSA. As a result, the Agency did not learn about the 
protest until after the authority was issued. The Agency considered the 
protest after it was discovered, but rejected it because it raised 
issues that the Agency believed at the time it could not lawfully 
consider in evaluating the applicant's fitness to receive new operating 
authority.
    Regular-route passenger carriers are the only motor carriers 
regulated by FMCSA that must file multiple applications to expand their 
interstate operations. Passenger carriers providing charter or other 
non-regular route services, as well as property carriers, are required 
to file only a single application covering all potential operations in 
interstate commerce. Safety compliance monitoring for these carriers is 
carried out through new entrant safety audits, compliance reviews and 
vehicle inspections. These monitoring activities provide ample 
incentives to maintain compliance with the Federal Motor Carrier Safety 
Regulations, because problem carriers may be placed out of service for 
lack of safety fitness or be assessed civil penalties for regulatory 
noncompliance. The commenters have not shown that requiring regular-
route carriers to file new applications when expanding their operations 
has any discernible impact on motor carrier safety.
    Contrary to the statement by Peter Pan, FMCSA did not suggest in 
the NPRM that States would be responsible for overseeing compliance 
issues connected with potential expansion of regular-route service. 
Rather, the Agency was soliciting comment on the potential impact of 
its proposal on the statutory preemption of State regulation of 
intrastate transportation, which is discussed in more detail below.
    Coach USA's comment that FMCSA will have difficulty assessing the 
adequacy of a regular-route carrier's safety program during a new 
entrant safety audit or compliance review unless it knows the size of 
the geographic area in which the carrier plans to operate misconstrues 
the nature of these safety assurance processes. New entrant safety 
audits and compliance reviews are designed to provide a snapshot of the 
carrier's basic safety management controls and regulatory compliance at 
the time of the audit or compliance review. During the safety audit or 
compliance review, the auditor or investigator can readily determine 
the scope of the carrier's existing operations by asking carrier 
officials or reviewing the carrier's records. Such reviews are not 
intended to speculate about future safety compliance based on potential 
future expansion or contraction of a carrier's operations, regardless 
of whether the carrier transports passengers or property. For example, 
a new property carrier may only operate a small number of trucks at the 
time of the new entrant safety audit, but may plan to expand its 
service territory and lease or purchase a significant number of 
additional vehicles in the future. The safety audit determines the 
carrier's compliance based on its existing operations, not future plans 
that may never come to fruition. In the event the carrier eventually 
follows through on its expansion plans, vehicle inspections would 
identify potential safety problems that warrant closer scrutiny of the 
carrier through a compliance review. Contrary to ATU's comments, route 
designations are not needed to locate carriers for additional safety 
audits, inspections and compliance reviews. Safety audits and 
compliance reviews are generally conducted at the carrier's principal 
place of business and vehicle

[[Page 2898]]

inspections are not scheduled to coincide with a carrier's designated 
route system.
    Finally, TTD's comment that FMCSA must know the routes of cross-
border bus operations to ensure such carriers comply with safety 
regulations and do not engage in cabotage fails to take into account 
that FMCSA is not issuing operating authority to regular-route 
passenger carriers domiciled in Mexico. If the Agency does so in the 
future, there is an extensive safety monitoring system in place, which 
includes pre-authorization safety audits, mandated safety inspection 
decals and compliance reviews designed to ensure compliance with the 
applicable safety regulations (see 49 CFR Part 365, Subpart E, and 49 
CFR Part 385, Subpart B).
    Cabotage is generally defined as the prohibited point-to-point 
transportation of property or passengers within the United States by 
foreign-domiciled motor carriers. Identifying routes in a foreign motor 
carrier's operating authority would not ensure that the carrier does 
not engage in cabotage. If a carrier were issued broad general regular-
route operating authority in accordance with the final rule, it would 
still need to publish schedules listing pickup and drop-off locations 
along the route to make the operation financially viable. Such 
schedules would be more useful to enforcement officials in identifying 
potential cabotage violations than a route described in the carrier's 
operating certificate, which would not indicate pickup and drop-off 
times and locations.

B. The Over-the-Road Bus Transportation Accessibility Act of 2007

    The Over-the-Road Bus Transportation Accessibility Act of 2007 
(OTRB Act), Public Law 110-291, 122 Stat. 2915, became law on July 30, 
2008. This legislation was enacted in response to the Fung Wah case 
mentioned in the previous section of this preamble. In that case, FMCSA 
determined that it lacked statutory authority to consider compliance 
with the Department of Transportation's (DOT) Americans With 
Disabilities Act (ADA) accessibility regulations in determining whether 
a passenger carrier should be granted interstate operating authority. 
The OTRB Act directed FMCSA to determine: (1) An over-the-road bus 
(OTRB) company's willingness and ability to comply with DOT's ADA 
accessibility requirements in 49 CFR Part 37, Subpart H, before 
granting new operating authority to provide interstate passenger 
transportation; and (2) an OTRB company's compliance with 49 CFR Part 
37, Subpart H, in determining whether to suspend or revoke existing 
operating authority. The Act also required DOT and the U.S. Department 
of Justice to enter into a Memorandum of Understanding delineating 
their respective roles and responsibilities in enforcing the DOT ADA 
regulations.
    Most of the commenters expressed concern that the Agency's proposal 
would prevent meaningful implementation of the OTRB Act. The commenters 
noted that without route designations, FMCSA would be unable to assess 
whether an applicant for new operating authority has adequate equipment 
and systems to comply with the ADA. Moreover, eliminating the need for 
existing carriers to seek new authority before expanding their 
operations would eliminate FMCSA's ability to assess ADA compliance 
before allowing route expansion. DREDF supported an ABA proposal that 
would have FMCSA: (1) Investigate all bus applications that are 
protested on ADA grounds and issue a written decision setting forth the 
grounds for approval or denial of the application; (2) include ADA 
compliance as a pass/fail factor in the new entrant safety audit 
because noncompliance with ADA regulations is indicative of breakdowns 
in a carrier's management controls; (3) make clear that a bus company's 
failure to comply with DOT's ADA regulations is grounds for revocation 
of operating authority; and (4) establish procedures for investigating 
ADA compliance and determining whether revocation is appropriate.
    FMCSA Response:
    The OTRB Act requires that FMCSA determine compliance with DOT's 
ADA accessibility regulations as an additional element to consider in 
determining an applicant's fitness to receive new operating authority. 
Other statutory fitness criteria include compliance with FMCSA's 
commercial and safety regulations, the Agency's safety fitness 
standards, and the applicable financial responsibility regulations. In 
amending 49 U.S.C. 13902(a), Congress placed compliance with the ADA 
regulations on the same footing as compliance with the commercial and 
safety regulations. Therefore, the Agency will consider ADA compliance 
(as it does with compliance issues regarding the other applicable 
regulations) when protesting parties allege that an applicant's failure 
to comply with the ADA regulations requires the Agency to withhold new 
operating authority, or when the Agency otherwise has reason to believe 
the applicant may not be ADA-compliant. The Agency's decision to 
withhold operating authority will be based on its evaluation of whether 
the applicant is willing and able to prospectively comply with the 
regulations and is not intended to be a sanction for past 
noncompliance. Accordingly, although past noncompliance with regulatory 
requirements is certainly an important factor in evaluating a carrier's 
fitness, it does not automatically bar an applicant from receiving new 
operating authority.
    This change in the Agency's application procedures will not prevent 
meaningful implementation of the OTRB Act. The Act amended 49 U.S.C. 
13905 to permit FMCSA to suspend or revoke a carrier's operating 
authority based on willful noncompliance with the DOT ADA regulations. 
Consequently, it is unnecessary to wait for a carrier to file a new 
application before filing a complaint with the Agency requesting 
suspension or revocation of the carrier's operating authority. FMCSA 
also has the authority to initiate a suspension or revocation 
proceeding based on findings of willful noncompliance discovered during 
compliance reviews, new entrant safety audits or other means. Unlike 
denial of an application for new authority based on ADA noncompliance, 
suspension or revocation can be more comprehensive, affecting the 
carrier's ability to operate over all of its existing routes, not just 
the new routes proposed in the application. Moreover, the Agency is in 
the process of implementing the Act's requirement to enter into a 
Memorandum of Understanding (MOU) with the U.S. Department of Justice 
to more effectively coordinate enforcement of DOT's ADA accessibility 
regulations.
    DREDF's comment supporting ABA's proposal to include ADA compliance 
as a pass/fail factor in the new entrant safety audit raises issues 
that are beyond the scope of this rulemaking proceeding, which is 
limited to modifying the Agency's regulations to correspond with its 
removal of the route-designation requirement.

C. State Preemption Issues

    As was noted in the NPRM, 49 U.S.C. 13902(b)(3) preempts States 
from regulating intrastate service provided by interstate regular-route 
passenger carriers over interstate routes. If a regular-route passenger 
carrier obtains operating authority from FMCSA, a State is prohibited 
from requiring the carrier to obtain operating authority to provide 
intrastate service on an interstate route operated by the carrier. 
Because the preemption is limited to operations over specific routes, 
FMCSA requested comment on whether elimination of route designations in 
FMCSA operating certificates would make this preemption provision more

[[Page 2899]]

difficult to enforce and perhaps result in increased State regulation 
of intrastate regular-route transportation.
    Under 49 U.S.C. 14501(a)(1)(A), States are also preempted from 
regulating the scheduling of interstate or intrastate transportation 
(including discontinuance of or reduction in the level of service) on 
an interstate route. FMCSA requested comment on whether elimination of 
route designations will affect this preemption provision.
    Greyhound contended that section 13902(b)(3) clearly shows that 
Congress intended for Federal operating authority to be issued on a 
route-specific basis. It claimed that without specific route 
designations, preemption would be impossible to administer because, on 
the one hand, States could argue that the lack of a specific route 
designation would permit them to license all regular-route intrastate 
service within their borders while, on the other hand, interstate 
carriers could argue that the broad scope of their interstate authority 
prohibits the States from licensing any intrastate service they 
provide. Greyhound argued that elimination of route designations would 
also encourage States to regulate schedules and rates on all intrastate 
bus routes, thus vitiating the section 14501(a)(1)(A) preemption.
    Coach USA pointed out that a route-specific certificate issued by 
FMCSA is important evidence of the interstate service provided by the 
carrier which makes it easier to preempt States from regulating 
intrastate transportation provided over a carrier's designated 
interstate routes. Removal of route designations, it claims, would make 
it more difficult to administer the statutory preemption.
    MoDOT submitted the lengthiest comment regarding this issue. 
Contrary to Greyhound and Coach USA, who indicated that removal of the 
route designation requirement could encourage the States to 
significantly increase their regulatory presence, MoDOT argued that 
FMCSA's proposal would radically expand the Federal preemption of State 
and local laws regulating wholly intrastate commerce in excess of the 
statutory limits intended by Congress and would unlawfully deregulate 
market entry into the intrastate passenger transportation industry.
    MoDOT asserted that elimination of the route designation 
requirement would negate any meaningful distinction between regular-
route and irregular-route service since irregular-route service, at 
least under Missouri law, includes transportation not restricted to any 
specific route or routes within the carrier's authorized service area. 
Consequently, MoDOT believed that the FMCSA proposal would effectively 
preempt State and local entry regulations with reference to all 
intrastate transportation of passengers provided by federally-
authorized motor carriers within any State.
    FMCSA Response:
    We do not agree with Greyhound that section 13902(b)(3) requires 
FMCSA regular-route operating authority to be route specific. That 
provision authorizes federally-registered carriers to provide regular-
route transportation entirely in one State if such intrastate 
transportation is to be provided on a route over which the carrier 
provides interstate transportation of passengers. There is no reference 
to authorized routes in section 13902(b)(3), as there was in former 49 
U.S.C. 10922(d)(2), which authorized the ICC to issue interstate 
operating authority that would allow interstate carriers to provide 
intrastate transportation on a route over which a carrier has, or will 
be granted, Federal authority. The ICCTA, the same statute that 
eliminated the route designation requirements of 49 U.S.C. 10922(f)(1)-
(3), also eliminated the authorized route language that appeared in 
former section 10922(d)(2). Therefore, an FMCSA-licensed passenger 
carrier need only provide interstate transportation of passengers over 
a regular route in order to provide intrastate transportation along 
that route. There is no requirement that the route be specified in the 
motor carrier's FMCSA operating authority certificate in order to 
qualify as an interstate route for purposes of implementing section 
13902(b)(3).
    FMCSA also disagrees with MoDOT's assertion that elimination of the 
route designation requirement effectively eliminates the distinction 
between regular-route and irregular-route service. Passenger carriers 
will continue to receive operating authority based on the type of 
service being provided--regular-route or charter and special 
operations. Carriers registered to provide regular-route service are 
required by 49 CFR 374.305(c) to provide printed schedules to the 
traveling public at all facilities where tickets are sold. Such 
schedules must show for each route operated by the carrier: (a) The 
points along the route where facilities are located or where the bus 
trips originate or terminate; and (b) the arrival or departure time for 
each such point. Even without these regulatory requirements, regular-
route carriers would need to provide such schedules out of business 
necessity in order to attract ridership along their routes.
    In the absence of route designations in a carrier's operating 
certificate, the States can readily obtain copies of schedules from 
carriers to determine which routes they are operating over. After 
obtaining these schedules, the States would still have to show a lack 
of sufficient nexus between intrastate transportation provided over the 
route and legitimate interstate service over the route in order to 
legally regulate the intrastate transportation. Accordingly, we believe 
the most significant difficulties in implementing section 13902(b)(3) 
would result from establishing the presence or absence of legitimate 
interstate transportation along the route, not the elimination of the 
route designation requirement. Based on the comments, the precise 
impact of eliminating the route designation requirement on Federal 
preemption of State regulation of intrastate regular-route 
transportation is still uncertain.
    In conclusion, FMCSA adopts its proposal to discontinue the 
requirement that applicants seeking for-hire operating authority to 
transport passengers over regular routes submit a detailed description 
and a map of the route(s) over which they propose to operate. The 
Agency will continue to require public recipients of governmental 
assistance to designate specific routes when applying for regular-route 
authority because eliminating the route designation requirement in 
these circumstances would prevent the Agency from evaluating proposed 
transportation services under the public interest standard, in 
violation of its statutory mandate.
    In order to implement the Agency's new policy, FMCSA removes 49 CFR 
356.3, which prescribes the extent to which passenger carriers may 
serve points not located on their ``authorized routes.'' The final rule 
also amends: (1) 49 CFR 365.101 to reflect that the Agency will no 
longer be granting authority to passenger carriers to operate over 
specific routes; (2) 49 CFR 374.303(f) and 374.311(a) by removing 
language indicating that the Agency grants authority to operate over 
specific routes; and (3) 49 CFR 374.311(b) by removing the requirement 
that carriers must file with FMCSA notices of schedule and route 
changes. FMCSA will continue to require regular-route motor passenger 
carriers to post notices of schedule changes in each affected bus and 
carrier facility for the convenience of their passengers.

[[Page 2900]]

V. Regulatory Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review); DOT Regulatory 
Policies and Procedures

    FMCSA has determined that this action is not significant under 
Executive Order 12866. This rule does not have an annual effect on the 
economy of $100 million or more and does not adversely affect in a 
material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or tribal governments or communities. The rule does not create a 
serious inconsistency or otherwise interfere with an action taken or 
planned by another agency, does not materially alter the budgetary 
impact of entitlements, grants, user fees, or loan programs or the 
rights and obligations of recipients, and does not raise novel legal or 
policy issues arising out of legal mandates or the Administration's 
priorities. FMCSA prepared a regulatory impact assessment for this rule 
as required by Executive Order 12866, but the final rule and the 
regulatory impact assessment have not been reviewed by OMB because it 
was determined to be not significant under the Executive Order.
    The Agency prepared a regulatory impact assessment for the NPRM, 
which evaluated route deregulation options under three industry growth/
change scenarios. Based on these scenarios, FMCSA estimated annual net 
benefits to the industry of $36,000 to $44,000 from avoided costs 
related to the elimination of the route designation application 
requirement. Evaluated over a 10-year period, the estimated net present 
value of the industry cost savings ranged from $222,000 to $341,000 
based on discount rates of 3 to 7 percent depending on whether one uses 
a 3-year average, 5-year average, or 5-year median. No comments were 
received disputing these figures.

Regulatory Flexibility Act, as Amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996

    The Regulatory Flexibility Act (RFA) (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), requires Federal agencies, as a part of 
each rulemaking, to consider regulatory alternatives that minimize the 
impact on small entities while achieving the objectives of the 
rulemaking. FMCSA evaluated the effects of this proposed rule on small 
entities as required by the RFA.
    All new entrant regular-route carriers are affected by the proposed 
rulemaking action because all such carriers must file an OP-1(P) 
application to obtain regular-route authority. Existing regular-route 
carriers are affected only if they seek to expand their routes. New 
entrants and existing carriers submitted an average of 92 regular-route 
authority applications each year between 2003 and 2005. Currently, 
there are 272 active regular route authority carriers. The Small 
Business Administration (SBA) Small Business Size Standard for 
Interurban and Rural Bus Transportation is no more than $6.5 million in 
gross annual revenue. Based on U.S. industry statistics for 2002 
provided by the SBA Office of Advocacy, 279 out of 323 firms in the 
interurban and rural bus transportation industry (roughly 86 percent) 
reported annual receipts of less than $5 million. Additionally, 
carriers with annual gross revenues between $5 million and $6.5 million 
would also be classified as small businesses, though FMCSA is unable to 
quantify the number of carriers within this range. Absent more current 
detailed data, the Initial Regulatory Flexibility Analysis prepared for 
the NPRM assumed that approximately 86 percent of regular route 
authority carriers are small entities. Comments received on the NPRM 
did not dispute these figures or provide additional data.
    This rule is a deregulatory action implementing a policy change 
intended to provide relief to industry. There are no additional costs 
specific to these entities as a result of this rulemaking, and the 
underlying policy change provides applicants with a cost saving of 
approximately $300 for each application. Therefore, FMCSA certifies 
this action will have no significant economic impact on a substantial 
number of small entities.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531 et seq.) 
requires each agency to assess the effects of its regulatory actions on 
State, local, and tribal governments and the private sector. Any agency 
promulgating a final rule likely to result in a Federal mandate 
requiring expenditures by State, local, or tribal governments, in the 
aggregate, or by the private sector, of $136.1 million or more in any 1 
year must prepare a written statement incorporating various 
assessments, estimates, and descriptions that are delineated in the 
Act. FMCSA determined that this rule would not have an impact of $136.1 
million or more in any 1 year.

Environmental Impacts

    The Agency analyzed this rule for the purpose of the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), the 
Council on Environmental Quality regulations implementing NEPA (40 CFR 
1500-1508), and FMCSA's NEPA Implementation Order 5610.1 published 
March 1, 2004 (69 FR 9680). This action is categorically excluded under 
Appendix 2, paragraph 6.d of the Order (regulations governing 
applications for operating authority) from further environmental 
documentation. The Agency believes that the action includes no 
extraordinary circumstances that would have any effect on the quality 
of the environment. Thus, the action does not require an environmental 
assessment or an environmental impact statement.
    FMCSA also analyzed this rule under the Clean Air Act, as amended 
(CAA) section 176(c), (42 U.S.C. 7401 et seq.) and implementing 
regulations promulgated by the Environmental Protection Agency. 
Approval of this action is exempt from the CAA's general conformity 
requirement since it involves rulemaking and policy development and 
issuance. (See 40 CFR 93.153(c)(2).) It would not result in any 
emissions increase nor would it have any potential to result in 
emissions that are above the general conformity rule's de minimis 
emission threshold levels. Moreover, it is reasonably foreseeable that 
the rule would not increase total CMV mileage, how CMVs operate, or the 
CMV fleet-mix of motor carriers. This action merely allows passenger 
carriers to make changes to their regular routes without FMCSA 
approval. Such alterations are routinely approved under current Agency 
procedures.

Environmental Justice

    The FMCSA evaluated the environmental effects of this rule in 
accordance with Executive Order 12898 and determined that there are no 
environmental justice issues associated with its provisions nor any 
collective environmental impact resulting from its promulgation. 
Environmental justice issues would be raised if there were 
``disproportionate'' and ``high and adverse impact'' on minority or 
low-income populations. None of the alternatives analyzed in the 
Agency's categorical exclusion determination, discussed under National 
Environmental Policy Act, would result in high and adverse 
environmental impacts.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-
3520), a Federal agency must obtain approval from OMB for each 
collection of

[[Page 2901]]

information it conducts, sponsors, or requires. This rulemaking would 
affect a currently-approved information collection request (ICR) 
covered by OMB Control Number 2126-0016, entitled ``Licensing 
Applications for Motor Carrier Operating Authority.'' This ICR has an 
annual burden of 55,738 burden hours, and will expire on January 31, 
2009.
    FMCSA is authorized to register for-hire motor passenger carriers 
under the provisions of 49 U.S.C. 13902. The form used to apply for 
operating authority with FMCSA is Form OP-1(P) for motor passenger 
carriers. This form requests information on the applicant's identity, 
location, familiarity with safety requirements, and type of proposed 
operations. The OP-1(P) application form will be changed to eliminate 
the current route-designation and mapping requirements. Changes to the 
OP-1(P) form must be approved by the Office of Management and Budget 
(OMB); consequently, FMCSA will seek OMB approval of this change, as 
well as other modifications to the form in response to recent 
legislative changes unrelated to route designation requirements.
    The Agency's discontinuation of its current requirement that motor 
carriers seeking authority to transport passengers over regular routes 
submit to FMCSA a detailed description and map of the proposed route(s) 
for approval would reduce the currently approved ICR annual burden by 
180 hours [2 hours to provide description and map of regular routes in 
Form OP-1(P) x 90 regular route applications per year = 180 hours]. The 
estimated annual burden for this ICR would decrease to 55,558 hours 
[55,738 currently approved annual burden hours-180 hours less time to 
complete Form OP-1(P) regular route applications = 55,558]. No comments 
were received regarding Paperwork Reduction Act issues.

Executive Order 12988 (Civil Justice Reform)

    This rulemaking meets applicable standards in sections 3(a) and 
3(b)(2) of Executive Order 12988, entitled ``Civil Justice Reform,'' to 
minimize litigation, eliminate ambiguity, and reduce burden.

Executive Order 12630 (Taking of Private Property)

    FMCSA has analyzed this rule under Executive Order 12630, entitled 
``Governmental Actions and Interference with Constitutionally Protected 
Property Rights.'' We do not anticipate that this action would effect a 
taking of private property or otherwise have taking implications under 
Executive Order 12630.

Executive Order 13132 (Federalism)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132, and FMCSA has determined 
that this rulemaking would not warrant the preparation of a Federalism 
assessment. We have determined that this proposed action would not 
affect the States' ability to discharge traditional State government 
functions.

Executive Order 13211 (Energy Effects)

    FMCSA has analyzed this action under Executive Order 13211, 
entitled ``Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use.'' The Agency has determined that 
it is not a significant energy action within the meaning of section 
4(b) of the Executive Order and is not likely to have a significant 
adverse effect on the supply, distribution, or use of energy. 
Therefore, a Statement of Energy Effects is not required.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this rule.

Executive Order 13175 (Tribal Consultation)

    FMCSA has analyzed this action under Executive Order 13175, dated 
November 6, 2000, and believes that it would not have substantial 
direct effects on one or more Indian tribes; would not impose 
substantial compliance costs on Indian tribal governments; and would 
not preempt tribal law. Therefore, a tribal summary impact statement is 
not required.

List of Subjects

49 CFR Part 356

    Administrative practice and procedure, Routing, Motor carriers.

49 CFR Part 365

    Administrative practice and procedure, Brokers, Buses, Freight 
forwarders, Motor carriers, Moving of household goods, Reporting and 
recordkeeping requirements.

49 CFR Part 374

    Aged, Blind, Buses, Civil rights, Freight, Individuals with 
disabilities, Motor carriers, Smoking.

0
For the reasons discussed above, FMCSA amends title 49, Code of Federal 
Regulations, chapter III, subchapter B, as set forth below:

PART 356--MOTOR CARRIER ROUTING REGULATIONS

0
1. The authority citation for part 356 continues to read as follows:

    Authority: 5 U.S.C. 553; 49 U.S.C. 13301 and 13902; and 49 CFR 
1.73.

Sec.  356.3  [Removed and Reserved].

0
2. Remove and reserve Sec.  356.3.

PART 365--RULES GOVERNING APPLICATIONS FOR OPERATING AUTHORITY

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

    Authority: 5 U.S.C. 553 and 559; 16 U.S.C. 1456; 49 U.S.C. 
13101, 13301, 13901-13906, 14708, 31138, and 31144; 49 CFR 1.73.

0
4. Amend Sec.  365.101 by removing and reserving paragraph (f) and 
revising paragraph (e) to read as follows:

Sec.  365.101  Applications governed by these rules.

* * * * *
    (e) Applications for certificates under 49 U.S.C. 13902(b)(3) to 
operate as a motor carrier of passengers in intrastate commerce over 
regular routes if such intrastate transportation is to be provided on a 
route over which the carrier provides interstate transportation of 
passengers.
    (f) [Reserved].
* * * * *

PART 374--PASSENGER CARRIER REGULATIONS

0
5. The authority citation for part 374 continues to read as follows:

    Authority: 49 U.S.C. 13301 and 14101; and 49 CFR 1.73.

0
6. Amend Sec.  374.303 by revising paragraph (f) to read as follows:

Sec.  374.303  Definitions.

* * * * *
    (f) Service means passenger transportation by bus over regular 
routes.
* * * * *

0
7. Amend Sec.  374.311 by revising paragraphs (a) and (b) to read as 
follows:

Sec.  374.311  Service responsibility.

    (a) Schedules. Carriers shall establish schedules that can be 
reasonably met, including connections at junction points, to serve 
adequately all points.
    (b) Continuity of service. No carrier shall change an existing 
regular-route schedule without first displaying

[[Page 2902]]

conspicuously a notice in each facility and on each bus affected. Such 
notice shall be displayed for a reasonable time before it becomes 
effective and shall contain the carrier's name, a description of the 
proposed schedule change, the effective date thereof, the reasons for 
the change, the availability of alternate service, and the name and 
address of the carrier representative passengers may contact.
* * * * *

    Issued on: January 6, 2009.
John H. Hill,
Administrator.
 [FR Doc. E9-363 Filed 1-15-09; 8:45 am]

BILLING CODE 4910-EX-P