Exemption From Operating Authority Regulations for Providers of Recreational Activities
Final rule.
CFR Part: "49 CFR Part 372"
RIN Number: "RIN 2126-AC57"
Citation: "89 FR 13984"
Document Number: "Docket No. FMCSA-2023-0007"
Page Number: "13984"
"Rules and Regulations"
Agency: "
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
Petitions for Reconsideration of this final rule must be submitted to the FMCSA Administrator no later than
FOR FURTHER INFORMATION CONTACT: Mr.
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
II. Executive Summary
A. Purpose and Summary of the Regulatory Action
Section 23012 of the
FOOTNOTE 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. END FOOTNOTE
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
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
CE Categorical Exclusion
CFR Code of Federal Regulations
DOT
E.O. Executive Order
FMCSRs Federal Motor Carrier Safety Regulations
FRFA Final Regulatory Flexibility Analysis
GDP Gross Domestic Product
ICR Information Collection Request
IRFA Initial Regulatory Flexibility Analysis
MCMIS Motor Carrier Management Information System
NAICS North American Industry Classification System
NPRM Notice of Proposed Rulemaking
OEWS Occupational Employment and Wage Statistics
PIA Privacy Impact Assessment
PTA Privacy Threshold Assessment
RIA Regulatory Impact Analysis
Secretary The Secretary of the
UMRA Unfunded Mandates Reform Act of 1995
URS Unified Registration System
U.S.C. United States Code
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 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
FOOTNOTE 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). END FOOTNOTE
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
B. Comments and Responses
FMCSA solicited comments concerning the NPRM for 60 days ending
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
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
AWM's comment questions whether the cost of obtaining and maintaining operating authority is burdensome, and it critiques portions of the comment from the
FOOTNOTE 3 AOA's comment was submitted in response to DOT's Notice of Review of Guidance, 84 FR 1820,
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
FOOTNOTE 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. END FOOTNOTE
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, 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.
FOOTNOTE 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. END FOOTNOTE
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.
FOOTNOTE 6 For example, Progressive offers policyholders the option to adjust coverage based on seasonal changes (
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
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
VII. Severability
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
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,
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
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
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
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
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 inMaintaining Operating Authority Form Affected groups Motor Carrier Automobile Bodily Injury and Property Damage Liability Certificate of Insurance (BMC-91 or BMC-91X) Carriers that must provide proof of liability insurance meeting the minimum levels of financial responsibility. Motor Carrier Records Change (MCSA-5889) Carriers reinstating operating authority. Request for Revocation of Authority Granted (OCE-46) Carriers voluntarily revoking operating authority. Application forMotor Passenger Carrier Authority (OP-1(P)) Carriers with an existing USDOT 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
FOOTNOTE 7 DOL, BLS. Occupational Employment and Wage Statistics (OEWS). National.
FOOTNOTE 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. END FOOTNOTE
FOOTNOTE 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
Table 2-Paperwork Costs to Private Sector
Paperwork Wage Hours to Cost per form Filing fee Total cost
submit form
Forms BMC-91 or BMC-91X by insurance claims processer $ 39.36 0.17 $ 7 $ 7
Form MCSA-5889 by office clerk 31.99 0.25 8 $ 80 88
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
Paperwork GS-9, Step 5 wage Hours to Cost per form
process 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 (
The primary source for industry wages is the median hourly wage data (
FOOTNOTE 10 DOL, BLS. Occupational Employment and Wage Statistics (OEWS). National.
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
FOOTNOTE 11 DOL, BLS. Table 4: Employer costs for Employee Compensation for private industry workers by occupation and industry group,
FOOTNOTE 12 Ibid. END FOOTNOTE
For estimating the overhead rates on wages, the Agency used industry data gathered for the Truck Costing Model developed by the
FOOTNOTE 13 Berwick, Farooq. Truck Costing Model for Transportation Managers.
It is assumed that FMCSA reviewers will be Federal government employees located in the
FOOTNOTE 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
FOOTNOTE 15 DOT, Volpe Center. Volpe Project Costs. Available at: https://www.volpe.dot.gov/work-with-us/volpe-project-costs (accessed
FOOTNOTE 16 DOT, Volpe Center. How to Initiate Work. Available at: https://www.volpe.dot.gov/work-with-us/how-initiate-work (accessed
FOOTNOTE 17 DOT, Volpe Center. Volpe Project Costs. Available at: https://www.volpe.dot.gov/work-with-us/volpe-project-costs (accessed
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
FOOTNOTE 18
Table 4-Current Insurance Estimates byFleet Size 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.
FOOTNOTE 19 For example, Progressive offers policyholders the option to adjust coverage based on seasonal changes (
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
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
FOOTNOTE 20 DOL, BLS. Occupational Employment and Wage Statistics (OEWS). National.
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
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
FOOTNOTE 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
FOOTNOTE 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. END FOOTNOTE
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
Scenario Three: No Incremental Change in Exemption Use
There may also be eligible carriers that correctly interpreted
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
FOOTNOTE 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. END FOOTNOTE
FOOTNOTE 24 This estimate is based on calculations used in the ICR titled "Licensing Applications for
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 (
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 (
FOOTNOTE 25 DOL,
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/
FOOTNOTE 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
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,
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
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
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
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 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
FOOTNOTE 27 More information about NAICS is available at http://www.census.gov/naics (accessed
FOOTNOTE 28 SBA Table of Small Business Size Standards Matched to NAICS effective
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
See table in Original Document.
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.
FOOTNOTE 29
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).
FOOTNOTE 30
The Scenic and Sightseeing Transportation, Land NAICS national industry (487110) has a revenue size standard of
For Scenic and Sightseeing Transportation, Water (487210), the
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
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
FOOTNOTE 31
Tour Operators (561520) focuses on arranging and assembling tours, including travel or wholesale tour operators. The SBA size standard for this national industry is
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,
FOOTNOTE 32
The industry groups under the
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
FOOTNOTE 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
Other
FOOTNOTE 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
The industry groups under the Amusement, Gambling, and
FOOTNOTE 35
FOOTNOTE 36
Entities falling under
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
FOOTNOTE 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
The Agency estimates that the majority of entities affected by this Final Rule would fall under the
Table 7 below shows the complete estimates of the number of small entities within the national industries affected by this rule.
Table 7-Estimates of Numbers of Small Entities
NAICS code Description Total number of firms Number of Percent of all firms
small entities
487110 Scenic and Sightseeing Transportation, Land 520 512 98
487210 Scenic and Sightseeing Transportation, Water 1,129 1,097 97
487990 Scenic and Sightseeing Transportation, Other 169 165 98
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 Clubs 8,076 7,712 99
713920 Skiing Facilities 203 189 93
713990 All Other Amusement Recreation Industries 12,688 7,629 60
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
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
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).
FOOTNOTE 38 Public Law 108-447, 118 Stat. 2809, 3268, note following 5 U.S.C. 552a (
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.
FOOTNOTE 39 Public Law 107-347, sec. 208, 116 Stat. 2899, 2921 (
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
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
1. The authority citation for part 372 continues to read as follows:
Authority:49 U.S.C. 13504 and 13506; Pub. L. 105-178, sec. 4031, 112 Stat. 418; and 49 CFR 1.87.
2. Amend
*****
(i) Recreational activities. The term "recreational activities" means activities consisting of an outdoor experience or excursion typically of a physical or athletic nature which require transportation for the sole purpose of moving customers to another location or locations where the outdoor experience or excursion will take place and collecting those customers to transport them back to the place of initial boarding or another outpost of the motor carrier. Recreational activities include but are not limited to hiking, biking, horseback riding, canoeing, whitewater rafting, water trails, tubing, skiing, snowshoeing, snowmobiling, hunting, fishing, mountain climbing, swimming, and off-highway vehicle driving and riding. The term does not include any activity:
(1) for which the activity offered or sold is occurring simultaneously with the transportation; or
(2) for which the transportation is the primary service offered for sale.
3. Add
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;
(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.
Acting Deputy Administrator.
[FR Doc. 2024-03782 Filed 2-23-24;
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