WASHINGTON – Lobbying efforts by the United Motorcoach Association and other industry groups against “regulatory overreach” have once again paid off.
The controversial lease and interchange rule that the motorcoach industry has been fighting for two years has been postponed for another year so regulators can retool it to exempt charter agreements.
The Federal Motor Carrier Safety Administration has pushed the compliance date for the final rule to Jan. 1, 2019.
FMCSA said in a Federal Register notice that based on meetings with industry stakeholders and further analysis of opposition to the rule, the agency is extending the compliance date “to allow time to revise the regulations, while ensuring that carriers have ample time to adjust to the requirements of the revisions.”
UMA officials cheered the announcement as continued progress in the association’s fight against unreasonable regulations, but said it would continue working to kill the rule.
“This is a textbook case of regulatory overreach, burdening passenger carrier businesses while providing absolutely no benefit to the traveling public,” said Dale Krapf, chairman of UMA and Krapf’s Coaches.
“UMA will keep pushing back against this final rule with the goal of eliminating the unnecessary and burdensome components for good, not just postponing it.”
FMCSA published the final rule, officially titled “Lease and Interchange of Vehicles; Motor Carriers of Passengers,” on May 27, 2015, with a compliance date of Jan. 1, 2017.
The rule would affect “charters, farm-outs, contracting or subcontracting” by requiring operators that contract with other carriers to provide buses on a temporary basis to execute formal leases. They also would be fully responsible for the subcontractor’s insurance and violations of the Federal Motor Carrier Safety Regulations, even though they have no direct oversight or control over the carrier’s business operations.
FMCSA said the purpose of the rule was to shut down illegal carriers trying to skirt federal oversight by operating under the cloak of another carrier.
But UMA contends the rule would add more regulations and paperwork to leases and farm-outs between coach operators and hurt legal operators who depend on
providing contract services.
The liability exposure carriers would face could preclude leasing and farm-outs
from ever being practical again, UMA contends.
The rule would have no affect on safety, UMA argues, but would instead stifle the ability of motorcoach operators to work with one another, which happens frequently.
If two carriers who both hold operating authority from the USDOT choose to assist each other in times of capacity issues or emergencies, no formal lease should be required, nor should one carrier be responsible for the other carrier’s safety performance, the association contends.
When the rule was first announced, it was greeted with an onslaught of criticism from the industry, with UMA and the American Bus Association filing a joint request to extend the 30-day deadline to submit petitions for reconsideration. FMCSA agreed to extend the deadline to Aug. 25, 2015.
The agency subsequently received 37 petitions for reconsideration. Acknowledging that some of the criticisms of the rule had merit, FMCSA extended the compliance date of the rule from Jan. 1, 2017, to Jan. 1, 2018, to allow the agency time to complete its analysis and amend the rule where necessary.
Then, in August 2016, the agency announced that it intended to consider changes to four aspects of the regulations. The changes would:
- Exclude chartering, or subcontracting, from the leasing requirements
- Amend the CMV requirements for the location of temporary markings for leased/interchanged vehicles
- Change the requirement that carriers notify customers within 24 hours when they subcontract service to other carriers
- Expand the 48-hour delay in preparing a lease to include emergencies when passengers are not actually on board a bus
FMCSA held a roundtable discussion about the rule last October to allow industry officials to discuss their concerns and to share additional details about their specific operations.
Attending were representatives of small and large bus companies and charter and regular-route operators from across the nation, as well as two insurance company representatives invited to attend because of liability concerns raised in the petitions for reconsideration.
During the roundtable, industry officials argued that FMCSA had taken a regulatory scheme from the trucking industry and applied it to the bus industry, which has an entirely different operating structure and liability regime.
FMCSA said the most significant objection raised at the roundtable and by petitioners for reconsideration was that the final rule wrongly treated chartering, or subcontracting, as equivalent to leasing.
The petitioners contended that passenger carriers with FMCSA-issued active passenger carrier operating authority have long subcontracted work to other carriers with operating authority to handle demand surges, emergencies or events that require more than their own available capacity.
They said subcontractors with their own operating authority have traditionally assumed responsibility for their own vehicles and drivers. Under the 2015 rule, however, a passenger carrier that subcontracted work to a second carrier would be responsible for the second carrier’s regulatory compliance.
Opponents claimed that making a carrier responsible for the subcontractor’s vehicles, drivers and liability would make most short-term subcontracts impossible.
Based on the roundtable discussions and after further analysis of the petitions to reconsider the rule, FMCSA announced last month that it was again postponing the compliance date, this time to Jan. 1, 2019. During the delay the agency will develop the four changes announced last August. Public comments on the proposed changes are due July 31.
“FMCSA believes that less burdensome regulatory requirements should be considered,” the agency said. “Subjecting passenger carriers with operating authority to the full requirements of the leasing rule is not necessary.”
Stacy Tetschner, UMA’s president and CEO, credited U.S. Transportation Secretary Elaine Chao and members of Congress for FMCSA’s decision to postpone the rule and “rein in burdensome and ill-conceived regulations holding back our nation’s passenger carriers.”
“UMA has led a broad coalition including state and regional partners as well as the American Bus Association on this critical issue for bus and motorcoach operators,” Tetschner said. “Along with Secretary Chao, we are appreciative of congressional support to strike and revise the most onerous parts of this final rule.”