7/26/2019 5_31_83 Bus NPRM

1/9

Federal Register Vol.

48,

No. 105 Tuesday, May 31, 1983 Proposed Rules

specific

data on

the

numbers

of

shipments by

other shipper

(such as

distributers

and by other

carriers

it is

believed

that the annual

savings on

these shipments would

also

be

substantial. MTB

solicits comments from

interested

parties on.the cost

savings

and burden reduction

associated with

this

proposal,

including specific

data to

quantify

these savings.

Under

existing

regulations,

small arms

ammunition

is not required

to

be in

specification

packaging and

is

not

required

to be labeled.

This proposal

would permit

a different marking on the

packages

and

would

eliminate the need

for

shipping

papers

for surface

transportation.

List

of Subjects

49 CFR Part172

Hazardous

materials transportation,

Labeling,

Packaging,

Containers.

49 CFR

Part

173

Hazardous

materials

transportation,

Packaging, Containers.

In

consideration of the foregoing,

Parts 172 and

173 of

Title 49

of

the

Code

of

Federal

Regulations

would be

amended

as follows:

PART

172-HAZARDOUS MATERIALS

TABLES

AND

HAZARDOUS

MATERIALS

COMMUNICATIONS

REGULATIONS

1.

In

172.101, the Hazardous

Materials

Table

would be amended

by

adding

the following entry:

172.101

Hazardous Materials

Table.

1) 2)

3)

3A)

4)

5)

6)

7)

Packaging Maximum

net quantity

in Water

shipments

one

package

Hazardoua

materialsonpakg

+EAW

descriptions

andtproper Hazard

class

Identification Label s)

required

spignmsnumber

it not

excepted)

Escep-

Specific

Passeniger

Cargo

Pas Other

sipin peato-

require-

carrying Cargo

only yes-

senger require-

ments

aircraft

or

aircraft sel vessel

mants

railcar

a)

b)

a) b)

a)

b)

c)

Small arms

ammunition .........

ORM-O

None

None

173.1201

65

pounds 65 pounds 1,3

1,3

gross. gross.

2.

Section

173.101

would

be

amended

by adding

paragraph g)

to

read as

follows:

173.101 Small-arms

ammunition.

(g) Special

exceptions

for

shipment

of

certain types

of

small

arms

ammunition

in

the

ORM-D class

are provided

in

Subpart N of

this part.

3.

Subpart N of

Part

173

would

be

amended

by adding

a new

173.1201 as

follows:

173.1201 Small

arms ammunition.

Small

arms

ammunition

offered for

transportation under provision

of

this

section

may only be ammunition

for

rifle, pistol, or

shotgun

containing

either

inert

projectiles-or

blank

ammunition.

Small arms ammunition

offered

for

transportation under provision

of

this

section

may not have any

tear

gas,

incendiary

or

detonating explosive

components,

and

may

not

be larger than

10 gauge

for

shot shells

and 45 caliber

for rifle and

pistol ammunition.

It must

be

packed

in pasteboard or other

inside

boxes,

in partitions designed

to fit

snugly

in

the

outside packaging, or

in

metal

clips. Partitions

and metal

clips

must be so designed

as

to protect

the

primers

from accidental

initiation. Inside

boxes,

partitions,

and metal

clips must

be

packed in securely

closed

strong

outside wooden or

fiberboard

boxes.

(49 U.S.C. 1803, 1804,

1808; 49 CFR

1.53,

App.

A to Part

1

and paragraph

(a)[3) of

App. A.

to

Part 106)

Note.-The

MTB

has

determined that

this

document'will not result

in a

major rule

under

the

terms

of

Executive

Order 12291 or

a

significant

regulation under

DOT's regulatory

policy and

procedures

(44

CFR

11034 and

does not

require an

environmental

impact

statement

under the

National

Environmental

Policy

Act 49

U.S.C. 4321 et

seq. . I

certify

that

this document

will not have a

significant

economic impact

on

a substantial

number

of

small

entities

because

the overall

economic

impact of

this document

will be

minimal.

A

regulatory

evaluation and

environmental

assessment are available

for

review

in the

docket.

Issued in

Washington, D.C.,

on

May

3

1983.

Alan

I.

Roberts,

AssociateDirectoror

afzardous

Materials

Regulation

MaterialsTransportation

ureau

[FR

Doc.

83-14329

Filed 5 27 3; 0:45 am)

BILLING

ODE 4910-60-U

Federal Highway

Administration

49

CFR Part

387

[BMCS

Docket

No. MC-107;

Notice

No.

82-14]

Minimum Levels

of

Financial

Responsibility

for Motor

Carriers of

Passengers

AGENCY: Federal

Highway

Administration

FHWA), DOT.

ACTION:

Notice of

proposed rulemaking.

SUMMARY:

This

document

proposes to

amend 49

CFR 387

by

adding

a new

subpart B to

establish

minimum

levels

of

financial

responsibility

for

for-hire

motor carriers

of

passengers

involved

in

interstate and

foreign transportation.

This

action is

in

accord

with

the

provisions

of Section

18 of

the Bus

Regulatory

Reform Act

of 1982.

This

document further

provides

for the

implementation

and

enforcement

of the

proposed

standards.

DATE:

Comments must

be

received

on or

before August

1,

1983.

ADDRESS:

All comments

should refer to

the docket and notice

number that

appears at

the

top

of

this document

and

should be submitted preferably

in

triplicate,

to

Room

3404,

Bureau

of

Motor Carrier

Safety (BMCS),

400

Seventh

Street,

SW.,

Washington,

D.C.

20590.

All

comments received

will

be

available

for

examination at

the

above

address between

7:45 a.m.

and 4:15

p.m.

e.t.,

Monday through Friday.

FOR FURTHER INFORMATION

CONTACT:

Mr.

Neill

L.

Thomas, Bureau of

Motor

Carrier

Safety,

(202)

426-9767; or

Mrs.

Kathleen S.

Markman,

Office of the

Chief

Counsel,

(202)

426-0346;

Federal

Highway

Administration,

400 Seventh

Street,

SW., Washington,

D.C. 20590.

Office hours are

from 7:45

a.m.

to

4:15

p.m. e.t., Monday

through Friday.

__

II II

24 47

Citation: 48 Fed. Reg. 24147 1983

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7/26/2019 5_31_83 Bus NPRM

2/9

Federal Register Vol. 48,

No.

105 / Tuesday, May

31,

1983 Proposed

Rules

INFORMATION The

has determined that this

does

not contain a

major

rule

Executive

Order 12291. It has

that

it

contains

significant

regulation under

the

policies of the

Department of

A draft

regulatory

evaluation and

a

Analysis are

for

review

in the public

A copy may be obtained

by

Mr. Neill

L. Thomas

at the

above under

the

FOR

FURTHER

INFORMATION

of

this document. The FHWA

requests

information upon

to

determine whether

of

Section 18

of

the Act

a

significant

economic

on a substantial

number

of small

On

September

20,

1982,

the

President

the

Bus

Regulatory

Reform

Act

of

Pub.

L. 97-261 (the Act). Section

18

the Act establishes

minimum

levels of

covering public

damage

for

the

of passengers

by for-hire

vehicles

in

interstate

or

foreign

The

Act

establishes minimum

levels

financial responsibility that must be

by

affected persons as

of

November

1983

unless

the

Secretary issues

that require

higher

or

lower

The Secretary

may promulgate

to require higher levels

the Secretary s

authority to

reduce

levels

is limited.

The

statute

the

Secretary from reducing

minimum levels

below specified

and provides that the

authority to

reduced levels

applies only

to

a

of

up

to 2

years

beginning

either

(1)

The effective

date of

the

rule

the rule

is made effective

19, 1983,

or

(2)

the 366th

the effective date

of

Section

18

provided

a rule is made

1 year after enactment

or

later.

The

purpose

of the financial

provision

of the Bus

Reform

Act

of 1982

is to

incentives to

motor

to

operate their buses ina safe

and to

assure that they maintain

levels

of

financial

sufficient to satisfy

claims

public

liability and property

The legislative

history

of

18 indicates

a Congressional

that

the establishment of

levels of

financial

to

enhance safety

will

that adequate

sources of

are

available to

compensate those who may be injured

while

traveling

by bus. It

is

also

believed, given

the

interstate

nature of

many motor carrier operations, a single

Federal

standard for

financial

responsibility coverage will be more

efficient

for carriers and

more

equitable

and certain for consumers.

Also

appearing in today s

Federal

Register are

the

delegations

of

authority

necessary for

the

issuance

of this

notice

of

proposed rulemaking

(NPRM). The

Bus Regulatory

Reform Act

of 1982 vests

the Secretary

with

the

authority

to

prescribe

minimum

financial

responsibility

levels. This authority

is

delegated to the FHWA,

and, in turn, the

FHWA is

delegating the authority

to the

Director, Bureau

of

Motor

Carriers

Safety (BMCS).

Minimum Levels

of

Financial

Responsibility

Required

The

current limits of liability

required

of

motor

carriers

of

passengers

subject

to regulation

by

the

Interstate

Commerce

Commission

(ICC)

are:

(1)

100,000/ 500,000/ 50,000

for

vehicles having a

seating

capacity of

more

than

12 passengers;

an d

(2) 100,000/ 300,000/ 50,000 for

vehicles having

a

seating capacity of

12

passengers

or less. These levels will

remain

in

effect until

final rules are

promulgated

by

the

FHWA or

changed

by the

ICC.

The minimum

levels of financial

responsibility

set forth

in

the Act

that

will

take

effect 1 year

after

the effective

date of the Act

unless the

Secretary

exercises

the

statutory authority

to

establish different

levels, are as

follows:

(1) 5 million for

vehicles

having

a

seating capacity of

16

or more

passengers; an d

(2)

1.5

million for

vehicles having a

seating

capacity of

15

passengers or

less.

The

Secretary s authority

to

change

the requirements

for the 2-year

phase-in

period

allows reductions as follows:

(1)

The

5

million statutory

requirement

to no less

than

2.5 million

for

vehicles having

a

seating

capacity of

16

or

more passengers; and

(2)The 1.5 million

statutory

requirement

to no

less

than

750,000

for

vehicles

having

a seating

capacity of 15

or less

passengers.

Generally, the Secretary

may

make

these reductions provided

the

Secretary

finds that such

reductions (1) will not

adversely affect public safety

and

(2)

will prevent

a serious disruption

in

transportation service.

Financial responsibility

may

be

established

under Section

18

of the Act

by any one

or

combination of

the

following methods

acceptable to

the

Secretary

(1)

Evidence

of insurance,

including

high

self-retention;

(2) Guarantee;

or

(3) Surety bond.

The Act requires that any bond filed

shall be

issued

by

a bonding

company

authorized to

do

business in the

United

States

Discussion

The

following

is a

discussion of

the

proposed

rules developed

by the FHWA.

For the

sake of clarity

the

rules

concerning the minimum levels of

financial

responsibility

for motor

carriers

of

passengers

will

be

designated

as

Subpart B

of 49

CFR 387. The FHWA

intends to

designate existing

sections

387.1 thru 387.17

concerning financial

responsibility

for motor

carriers

of

property,

as

Subpart

A.

Purpose Scope

and

Applicability

387.25-Subpart

B)

The minimum levels

of financial

responsibility,

covering public liability

and property damage,

as proposed

in

this document, would apply

to for-hire

motor

carriers of passengers involved in

interstate and foreign commerce.

Section 18 of

the

Act does

not

apply

to: 1. A motor

vehicle

transportinglonly

school

children

and teachers to

or

from

school;

2.

A motor vehicle

providing

taxicab

service

and

having

a

seating

capacity

of

less than

7passengers

and

not

operated

on a regular route

or between

specified

points; and

3. A motor vehicle

carrying 15 or less

individuals in a

single, daily round trip

to commute

to

and

from work.

It should be noted

that

the

language

of

the

Act

clearly indicates that

motor

vehicles for-hire,

carrying

16 or

more

individuals,

even in

a single,

daily round

trip to commute

to and from work are

subject

to

the

law.

As previously

discussed,

the

purpose

of

requiring

increased levels

of

financial

responsibility is

to enhance safety. It

is

believed that

the

public will be

better

served by

the

proposed limits,

especially

considering

that

motor

carriers

would

have

greater incentives to create and

maintain more effective

safety programs

to help keep their

premiums lower. This

belief

is

based

on

the

observation that

carriers

having

good

safety

records are

usually

evaluated

in

a favorable

light by

iniurance companies

since

generally

the

premiums

that insurance companies

charge are directly

related to their

insureds

loss experience.

Equally

important to safety in

considering minimum

levels of financial

7/26/2019 5_31_83 Bus NPRM

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ederal egister

/ Vol. 48,

No.

105 Tuesday, May 31, 1983 Proposed Rules

responsibility is the economic

conditions

under which

the motor

carrier industry

operates.

Such

consideration

is required

not only by

Section

18 which

directs the

Secretary of

Transportation

to

focus on

safety

without

creating

undue

economic

burdens

on

the motor carrier

and

insurance

industries,

but

also

by

Executive

Order

12291,

dated February

17, 1981.

Further,

the Regulatory

Flexibility

Act

of

1980

(Pub. L.

96-354,

September 19, 1980; 5 U.S.C.

60;

et-seq.)

requires more

flexible

regulatory

approaches

for small

business entities.

In accordance

with

these requirements,

a draft

regulatory

evaluation/regulatory

flexibility analysis has

been prepared.

Initial findings

contained

in

this

document

will be

discussed in

the

section

of this

preamble entitled

Financial

Responsibility,

Minimum

Levels (387.33).

efinitions 387 29

The

proposed definitions

for

this

subpart,

particularly

those

referencing

terminology

commonly

used in the

insurance

industry,

are based on

definitions

found in 49

CFR 387.5.

These

definitions

were developed

with

the

assistance

of the

insurance and

motor

carrier industries

during

an earlier

rulemaking

action concerning

liability

requirements

for motor

carriers of

property and are

discussed

in detail in a

notice of proposed

rulemaking

published

January

26, 1981,

46 FR 8186.

Other

definitions, such

as

those specifically

relating to

motor carriers

of property,

have been adjusted

to

reflect the

transportation

of

passengers.

One

term

introduced in

Section 18 of

the Act which has

not

previously

been

defined in the

FMCSR is

seating

capacity.

It is

believed that this term

is

generallly

self-explanatory

since

manufacturers

designate

the

seating

capacity

for most vehicles.

However, in

the case of a

custom

made

vehicle, or

any other vehicle

not

having

a

designated

seating

capacity, the

seating

capacity

will be

determined

in

accordance with

the

National Highway

Traffic

Safety Administration's

(NHTSA)

definition of

designated

seating

position

49,CFR 571.3). The

NHTSA

defines,

designated seating

position

as any plan

view location

capable

of accommodating

a person

at

least

as large

as a th percentile

adult

female,

if the

overall seat configuration

and

design and vehicle

design

is such

that

the position

is likely to

be used

as a

seating

position while

the

vehicle is in

motion,

except

for auxiliary seating

accomodations

such as

temporary or

folding jump seats.

Any

bench or split

bench seat

in a passenger

car, truck

or

multi-purpose

passenger

vehicle

with a

GVWR less than

10,000 pounds,

having

greater

than 50

inches

of

hip room

(measured in accordance

with

SA E

Standards

11100 a))

shall have

not

less

than three

designated

seating positions,

unless the seat design

or

vehicle design

is such

that

the center

position cannot

be used

for seating.

Financial

Responsibility

Required

387 31

This notice

proposes that

policies of

insurance,

surety bonds,

and

endorsements

required

under

this

section shall

remain

in

effect

continuously

until terminated.

Cancellation

may

be effected

by

the

insurer

or

the

insured

motor carrier

giving

35 days

notice in writing

to the

other.

An

analysis

of comments

received in

reponse to

BMCS

Docket

No.

MC-94,

concerning

minimum levels

of

financial

responsibility for

motor

carriers of

property, indicated

that:

(1)

35

days

constitutes

a reasonable

amount

of time

for

cancellation of policies

of

insurance,

surety

bonds, and

endorsements, (2)

it is

sufficient

time for

a

motor carrier to

obtain replacement

coverage,

unless

the

carrier's

performance record is

extremely

poor, (3) it is

also sufficient

time for

an insurance company

to be

relieved

of further

liability since

normally

there

is enough

premium

deposit

to

cover

that

period, and (4) 35

days is ample time

to prepare

cancellation

papers. It is

also

important

to

note that

the 35 days notice

of

cancellation

would

commence

on the

day that

such

notice

is

mailed with

proof or mailing

sufficient

proof of

notice.

Further, the

proposed rule

allows

the

motor carrier the right to

obtain

adequate

coverage

for a

finite period

e.g., coverage

by

binder) of time

to

cover

any lapse in continuous

compliance

without triggering

the

35-day

cancellation

requirement. This will

afford

assurance

that the

public will

be

prote ted

The

proposed

regulations would

require that

an

endorsement(s)

be

attached

to

insurance policies

for the

purpose of

assuring the

insured that all

the

criteria

of Section

18

of

the

Act

have

been met in the

policy.

Further, surety

bonds, on

a prescribed form,

using

prescribed

language,

would

be permitted

in

lieu of the policy

of

insurance and

required

endorsement.

The

required endorsements

Se e

Illustrations

I and II)

would

alleviate the

often

times

confusing translation

and

interpretation

of

an insurance policy

or

surety

bond.

It is believed that this

requirement

would not create

an undue

24149

4 49

7/26/2019 5_31_83 Bus NPRM

4/9

Federal Register Vol. 48, No. 105 Tuesday,

May 31 1983 Proposed. Rules

on the

insurance

it

consists of a single

page

using simple language. Further,

the

reflects the

Department s

belief

the

benefits of

having

endorsement

to policy far

outweigh

any

it,

since it would

of

full

coverage to

motor

carrier and

the

public at

a

endorsement

is

to motor carriers of

in accordance

with 49 CFR

and

to motor

carriers

o

by

the

Commerce

Commission.

The proof of

financial

responsibility,

it be an

endorsement

attached

a

policy of

insurance

or a

surety

would be kept at a motor carrier s

business. This proof

be

available to the public

upon

reqt est

for review. Such

is

in

keeping with the intent

Congress

to

provide

protection

to

the

It

would also provide

the

by

a

lessor of

a

motor

that the

minimum

levels of

responsibility have

been

me t

a

motor carrier.

Responsibility

Minimum

387 33

As previously discussed, a draft

evaluation/regulatory

analysis

has been prepared.

preliminary findings of

the

in

light of

Order

12291

indicate that the

safety

will not be

adversely

by reducing

the

mandated

of financial

responsibility

to the

levels permitted

for the

full two-

period provided for in the Act.

The

draft

regulatory

evaluation

that the

accident rate for the

bus

industry

is less

than

on e

of

that

for

the interstate trucking

A comparative analysis

trucks and buses shows

by number

fatalities

and

injuries,

and property

for

buses

are low.

Passenger

is

superior

in

buses compared

to

driver/co-driver safety; from

1.4 to

times

as safe fatality

wise and, while

number of injuries in bus and truck

is

considerably

closer,

this

attributed to

the

passenger-

factor

on buses. This

with

accident

cost

which

shows that the

lowest

levels

adequate to

cover liability

claims n

majority

of cases, indicates that the

phase-in

period may be

While

the data

used

to

prepare the

regulatory

evaluation has

been

to BMCS accident

statistics, it is

believed that this- information is

very

reliable and

accurate.

It is understood

however that more detailed information,

which

will hopefully, be

obtained from

the

regulated industry in response to

this

notice,

may indicate that the lowest

levels may not be

adviseable.

The information which is solicited

from

the

regulated industry

is needed to

assist

the FHWA inits assessment of

what

limits will

best protect

the public's

safety without seriously disrupting

transportation service.

The

regulatory

evaluation

also

indicates

that

the. cost

of

the

highest

levels, may not

represent

significantly

higher

costs.for the insured

when

compared to the expense of

current limits. If the comments reflect

such marginal

increases in premiums,

the FHWA may permit limifts higher

than

the

absolute

minimum to 'take

effect

for

protection of

the

public.

without

placing

significant burdens

on

the bus

industry.

Should the

comments

t

this

notice

warrant it, consideration

will

also be

given

to

the

option ofi layering

the.

required levels depending on such

variables as

fleet

size

or

annual

mileage.

The option

of permitting

a graduated

phase-in over

the

two-year period is

also

considered feasible

Such-

considerations

would' be in keeping with

the intent of

the Regulatory

Flexibility

Act

of

1980

Pub.

L..96-354, which

addresses-

regulatory

burden

on

small

businesses.

In order

to

assist

the FHWA

in its

final evaluation, it

is

requested

that

small bus

companies (Class II

and

III)

and small commuter companies,

including vanpool

operations

where

vans carry 16 or more

individuals,.

submit their financial statements-

or

aggregation and use in the final

evaluation.

The financial data should

cover the years

1977-1981 and

provide

particular attention to insurance.

premium information, number of

vehicles operated in each year, as well

as type

of services offered.

Interstate

bus companies are also

requested to

submit

their

accounting of total costs

(itemized,

if

possible) of serious

accidents

involving

fatalities,,

personal.

injuries,

and property damage.

State Authorityand

Designation

of

Agent

387 35 ]

Section 18 of the Act

states

that

financial

reponsibility may

be

established

under this section by any

one or combination of the following

methods acceptable to the Secretary:

evidence of insurance, including

high

self-retention, guarantee,

or surety bond.

Any bond filed shall be issued

by a

bonding company

authorized

to do

business in

the

United States.

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1983

Proposed Rules

Based

on

comments

received

in

response

to Docket MC-94

on

this same

matter,

it is

proposed that

both policies

of

insurance

and surety bonds will

satisfy

the financial

responsibility

requirements

of this part

if

the

insurer or

surety furnishing

the

policy

or bond

is

(a)

Legally authorized

to

issue

such

policies

or bonds in each

State

in

which

the

motor

carrier operates;

or

(b) Legally

authorized to

issue such

policies

or bonds in the

State

in

which

the

motor carrier

has its principal

place

of business

or domicile,

and

designates

a person

upon whom

process,

issued by

or

under

the

authority of

any

court

having

jurisdiction

of the subject matter,

may be

served in

any proceeding at

law

or

equity brought in

any

State

in

which

the motor carrier

operates; or

(c) Legally

authorized

to

issue

such

policies

or bonds

in any

State of the

United States

and eligible

as an excess

or surplus lines insurer in

any

State

in

which

business is written,

and

designates a person

upon

whom

process, issued

by or

under

the authority

of

any court having

jurisdiction

of the

subject matter,

may be served in

any

proceeding

at

law

or

equity brought in

any State

in which the

motor

carrier

operates.

It

should be noted

that even though

the Act

provides

for

guarantees

as

an

acceptable

method of meeting the

financial

requirements, this

method

has

not been

provided

for

in

this

proposed

rule.

This

is

due to the

fact that our

research

shows no

evidence that

motor

carriers

regulated by the

ICC consider

this

method

a

viable

tool for

meeting

financial

responsibility

requirements.

Further, neither

the

ICC nor

the

respondents

to Docket MC-94

were able

to

enlighten

the Department

as

to how a

guarantee

can

be practically

applied

to

the financial

responsibility

requirements

for

motor

carriers. Comments,

data

or

detailed

information concerning this

matter are welcome.

Violation

and

Penalty

387 41

To

additionally

strengthen

the

incentives for

motor

carriers

to

concentrate

more

rigorously

on safety,

Congress

included a

civil

penalty

of up

to

10,000

per violation

to

be

assessed

against

any

motor carrier proven

to be

in

violation of the

final

regulations

implementing

Section 18.

ist

of Subjects in 49

CFR

Part

387

Highways

and

roads,

Motor

carriers,

Motor

vehicles Financial

responsibility,

Insurance, Penalties.

(Catalog of

Federal Domestic

Assistance

Program Number 20.217

Motor

Carrier

Safety)

Issued

on: May 20, 1983.

Kenneth

L. ierson,

Director

ureauof

Motor

Carrier

afety

Federal

Highway Administration.

In

consideration of

the foregoing

and

under the

authority

of

18

of the Bus

Regulatory

Reform

Act

of

1982,

Pub. L.

97-261;

23

U.S.C. 315;

and 49

CFR 1.48

and

301.60,

the

Federal

Highway

Administration

proposes

to amend

Title

49,

Code

of Federal Regulations,

Subtitle

B,

Chapter

III,

by

revising

Part 387

as

set

forth

below.

PART

387 MINIMUM

LEVELS OF

FINANCIAL RESPONSIBILITY

FOR

MOTOR

CARRIERS

1. Sections

387.1

through

387.17

are

designated

as

Subpart A with the

title

Motor

Carriers of

Property.

2. Subpart

B is added

to Part 387

to

read

as follows:

Subpart B Motor

Carriers of

Passengers

Sec.

387.25

Purpose

and scope.

387.27 Applicability.

387.29 Definitions.

387.31

Financial

responsibility required.

387.33

Financial

responsibility,

minimum

levels.

387.35

State of Authority

and designation

of

agents.

387.37

Fiduciaries.

387.39

Forms.

387.41

Violation

and penalty.

Authority:

Sec. 18,

Pub. L. 97-261,

96 Stat.

1102

(23 U.S.C.

315);

49

CFR

1.48 and 301.60.

Subpart

B Motor Carriers

of

Passengers

387.25

Purpose and scope.

This

subpart

prescribes

the

minimum

levels of

financial

responsibility

required to

be

maintained by

for-hire

motor

carriers

of

passengers

operating

motor vehicles

in interstate

or

foreign

commerce.

The

purpose

of

these

regulations is to

create additional

incentives

to

carriers to operate

their

buses in a safe

manner

and

to assure

that

they maintain

adequate levels

of

financial

responsibility.

387.27 Applicability.

(a)

This subpart applies

to

for'hire

motor carriers

operating

motor vehicles

transporting

passengers in

interstate or

foreign

commerce.

(b)

Exception.

The rules

in

this

subpart

do

not apply to-

1)

A

motor vehicle transporting

only

school

children

and

teachersto

or from

school;

(2) A motor

vehicle providing

taxicab

service

and having a seating

capacity of

less

than

7

passengers

and not

operated

24 5

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1983

/ Proposed Rules

a regular route or between specified

and

3)A

motor vehicle carrying less than

individuals

in a single, daily round

to commute to and

from

work.

Definitions.

As used

in this subpart-

Accident includes

continuotis

or

eiposure

of the same

which results

in

public

which

the

insured neither

nor intended.

Bodily

injury means injury to the

sickness, or disease

to

any person,

death resulting

from

any

of

Endorsement an

amendmet

to an

policy.

Financial

esponsibility the

reserves (e.g., insurance

or surety

bonds) sufficient to

liability amounts

set forth in this

covering public liability.

For hirecarriage-transportation of

by

motor vehicle except

(a) The passengers

are transported by

person engaged in

a

business other

transportation; and

b)

The transportation

is

within

the

of,

and furthers a primary

than transportation) of

person.

Insured and principal themotor

in the policy of

insurance,

or

notice of

the

fiduciary of

carrier.

Insurance

premium the

monetary

an insured pays an insurer

for

of

liability

for

public

liability

against the insured.

Motor

Carrier means

for-hire

of passengers by motor vehicle.

Property damage means

damage to

of

use

of

tangible property.

PublicLiability means liability

for

or

property

damage.

387.31 Financial

responsibility

required.

(a) No motor carrier shall operate

a

vehicle transporting passengers

carrier

has obtained

and

in

effect the minimum

levels of

as

set forth in

387.33

of

this subpart.

b)

Policies

of

insurance, surety bonds,

this

remain in effect

until terminated.

1)

Policies

of

insurance and

bonds may be obtained for a

period

of time

to cover

any lapse

continuous compliance. (2)

may be effected by the

or the insured

motor

carrier

35

days

notice

in writing to the

The 35

days

notice

shall

commence

to

run.

from the

date the

notice

is mailed. Proof of mailing

shall

be sufficient

proof

of notice.

*

c)Policies

of insurance

and surety

bonds required under this section may

be,

eplaced

by

other policies of

insurance

or surety bonds. The; liability

of the retiring insurer or surety, as-to

events

after the

termination date, shall

be

considered

as.

aving

terminated

on

the

effective date: of thereplacement

policy

of insurance

or urety bond or at

the

end' of the 35 day

cancellation period

required in paragraph b) of this, section,

whichever

is

sooner.

d)Proof

of the

required

financial

responsibility shall

be

maintained

at the

motor carrier's principal place

of

business. The proof shall consist of-

1)

Endorsement(s)

for

Motor

Carriers

of Passengers Policies

of

Insurance

for

Public

Liability

Under

Section 18

of the

Bus

Regulatory Reform

Act of

1982

(form MCS-90B).issued by

an

insurer(s); or

2) A Motor

Carrier

of

Passengers

Surety Bond

for

Public

Liability

Under

Section 18 of the Bus:Regulatory

Reform

Act of 1982 (form MCS-82B)

issued

by

a urety.

(e)

The proof

of minimum

levels of

financial responsibility required by

this

section shall be considered public

information

and

be

produced for

review

upon

reasonable

request by

a

member

of

the public.

387.33 Financialresponsiblllty, minimum

levels.

The minimum levels of financial

responsibility

referred to in

387.31 of

this

subpart

are

hereby prescribed

as

follows:

SCHEDULE

OF LIMITS, PUBLIC LI BIUTY FOR

HIRE MOTOR

CARRIERS

OF PASSENGERS

OP-

ERATING IN INTERSTATE OR

FOREIGN

COM-

MERCE.

Effective dates

Vehicle seating capacity [Nov

19 [Nov.

19,

19831

985

1)

[Any vehicle]

with a

seating

capacity of 16 passengers or

more...............

............................$2,500,ooo

to

[ 5,000,0001 S5 000=00

12) Any

vehicle]

with seating

capacity

of S.

assenger

or

tess

..-.... 0...01............

s 1

to

[ 1,500.0001

i

1 5

387.35 State authority

and

designation

ofagent

A policy of insurance or surety bond

does not satisfy the financial

responsibility

requirements of this

subpart unless the insurer or surety

furnishing the policy or bond is-

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1983

Proposed ules

a) legally

authorized

to issue such

policies or bonds in each State in Which

the motor carrier operates; or

b) legally

authorized

to issue such

policies or bonds in the

State

in which

the

motor carrier has

its principal place

of

business

or domicile, and designates

a

person upon

whom

process, issued

by

or

under

the

authority

of any court

having

jurisdiction of.the subject matter,

may

be served

in

any

proceeding

at

law

or equity

brought in

any State

in which

the

motor

carrier

operates;

or

c)

legally authorized

to

issue such

policies or bonds in any State of

the

United States

and eligible-as an

excess

or surplus lines insurer in any State in

which business is written, and

designates a

person

upon whom

process, issued by or under

the

authority

of any

court having

jurisdicition of

the

subject

matter, may be

served in any

proceeding

at

law or equity brought in

any State

in

which the motor carrier

operates.

387.37 Fiduciaries.

The coverage of

fiduciaries shall

attach

at the

moment of succession of

such fiduciaries.

387.39 Forms.

Endorsements

for policies of

insurance Illustration

I

and surety

bonds Illustration

II) must

be

in the

form

prescribed by

the

FHWA and

approved

by the

OMB. Endorsements

to

policies of insurance and surety bonds

shall specify that coverage thereunder

will

remain

in

effect

continuously

until

terminated as required

in

387.31

of

this

subpart. The

endorsement and surety

bond

shall

be

issued

in the

exact

name

of the

motor

carrier.

387.41

Violation

and

penalty.

Any

person except an

employee who

acts without

knowledge) who

knowingly

violates

the

rules of

this

subpart shall

be

liable to

the

United

States for

civil

penalty of

no

more than

10,000

for each

violation, and if any such violation

is

a

continuing one, each

day

of violation

will constitute a separate offense. The

amount of any

such penalty shall be

assessed by the Director,

Bureau

of

Motor

Carrier

Safety,

by

written

notice.

In determining the

amount of such

penalty,

the

Director shall take into

account

the

nature, circumstances,

extent, the

gravity of

the

violation

committed and,

with

respect

to the

person

found to

have

committed

such

violation,

the degree

of culpability, any

history of prior offenses,

ability

to pay,

effect

on

ability

to continue to

do

business, and such

other

matters as

justice

may

require.

BILLING CODE 4910-22-M

4 53

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Tuesday, May 31, 1983 / Proposed Rules

ILLUSTRATION

I

Expiration Dote

Form

Amro ed

OM No.

ENDORSEMENT

FOR

MOTOR CARRIER POLICIES

OF INSURANCE

FOR PUBLIC LIABILITY

UNDER

SECTION 18 OF

THE

BUS REGULATORY

REFORM ACT OF

1982

at

Policy No.

of

Insurance

Company.

this _ day of

Effective

Date

Countersigned by

Authorized

Company

Representative

policy to

which

this

endorsement

is

attached provides

primary or excessnsurance,

as indicated by

W , for the limits shown:

0 This

insurance

is

primary

and the company

shall not be iable

for amounts in

excess

of S

for each accident.

IJ This

insurance

is excess

and

the

company shall not

be

liable for

amounts

in

excessof S

for

each accident

in

excess

of

the

underlying

limit of S

for each

accident.

required

by the Bureau

or the

ICC,

the

company agrees

to furnish

the

Bureau or the

ICC a

duplicate

of said policy

and

oll

endorsements.

The

company

also agrees, upon

telephone

request

by en

authorized

representative

of

the Bureau

or the ICC. to

the

policy

is

in force as

of a

particular

date.

The

telephone

number

to cell is:

of this endorsement may

be

effected

by the company

or

the

insured by

giving (1) thirty-five

(35)

days

notice in

writing

the other party

(said 35 days notice to

commence from the

date

the

notice

is

mailed, proof

of

mailing shall

be sufficient proof

of

and (2)

if

the insured

is

subject

to

the

ICC s

jurisdiction,

by

providing

thirty

(30)

days

notice

to

the

ICC (said

30

days

notice

commence from the

date the

notice

is

received

by the

ICC at

its

office

in Washington,

D.C.).

DEFINITIONS AS USED IN THIS ENDORSEMENT

includes

continuous or repeated

exposure

to

condi-

which results

in Public Liability which

the insured neither

not intended.

INJURY means injury

to

the

body, sickness, or

disease

any person, including

death resulting

from any of these.

insurance

policy

to

which

this endorsement

Is attached pro-

automobile

liability insurance

and

is

amended

to

assure

insured, within the

limits stated herein.

as a

motor carrier

of

passengers

with

Section 8

of

the

Bus

Reform Act of 1982 and the

rules and regulations

the Federal

Highway Administration s

Bureau

of

Motor

Safety (Bureau)

and the Interstate Commerce

Com-

(ICC).

consideration

of

the premium

stated in the

policy to which

endorsement Is

attached,

the insurer

the

company)

agrees

pay,

within the

limits

of

liability

described

herein,

any final

recovered against

the

insured for public

liability

from

negligence

in

the

operation,

maintenance or

use

motor vehicles

subject

to

financial

responsibility require.

of Section

8 of the

Bus

Regulatory

Reform Act

of 1982

of whether or not

each motor vehicle

is

specifically

In

the policy. and

whether or not

such

negligence

on any

route or in

any

territory

authorized

to be eved

the

insured

or

elsewhere.

Such insurance

as is afforded,

for

liability, does

not

apply to

injury

to

or death of

the

employees

while engaged in the course

of

their

or property transported by

the

insured,

desig-

as cargo. It

is understood and

agreed that no condition,

stipulation,

or limitation contained

In the

policy,

MOTOR CARRIER

means

a

for-hire

carrier of

passengers by

motor

vehicle.

PROPERTY DAMAGE

means damage to

or

loss of use of tan-

gible property.

PUBLIC

LIABILITY means

liability

for bodily

injury

or property

damage.

this endorsement,

or

any other

endorsement thereon, or viola-

tion thereof, shall relieve

the company from

liability

or from

the payment of

any final judgment,

within

the limits

of

liabil-

ity

herein described,

irrespective

of the financial

condition.

Insolvency

or

bankruptcy

of the

insured. However,

all terms,

conditions,

and limitations in the

policy

to

which the

endorse-

ment is attached shall

remain in full foice and

effect asbinding

between the

insured

end

the company.

The insured agrees to

reimburse the company

for any payment

made by the company

on account

of any accident,

claim, or

suit involving a breach of

the terms of

the

policy, and

for any payment

that the company

would

not

have

been obligated

to make under

the

provisions

of the policy except

for the agreement

contained in this

endorse-

ment.

It is further understood and

agreed that, upon

failure of the

company to pay

any final

judgment

recovered

against the Insured

as

provided herein, the judgment

creditor

may

maintain

en action

In any

court of competent jurisdiction against

the company to

compel

such payment.

The

limits

of the

company s

liability for

the

amounts prescribed

in

this endorsement

apply separately

to each accident and

any

payment under the policy

because of any one accident shall not

operate

to

reduce the

liability

of

the company

for the payment

of

final

judgments

resulting

from any other accident.

Bus

Regulatory

Reform

Act of 1982 requires

limits of financial

responsibility according

to vehicle seating capacity.

It

is the

CARRIERS

obligation to obtain

the

required

limits of financial

responsibility.

MCS.9oe

411431

SCHEDULE

OF

LIMITS

Public Liability

For.hire motor

carriers

of

passengersperating

in interstate

or foreign commere

Effective tes

Vehicle

ti

ng

Capacity

Nov.

19,1983

Nov.

19.1985

Any

-.ethcle with a

seating

capacity

of

16 passengers or

more.

2,500,000 5,000,000

Any

ehicle with aseating capacity

of

15

passengers

or

less

750,000 1,500,000

19

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Tuesday,

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31 1983 Proposed

Rules 24155

ILLUSTRATION

II

Form Approved

OM No

MOTOR

CARRIER

PUBLIC

LIABILITY SURETY BOND

UNDER SECTION

18

OF

THE BUS

REGULATORY REFORM

ACT

OF 1982-

PARTIES Surety

Company and Principal

Motor

Carrier Principal,

I.CC.

Docket

No.,

Place

of

Business

Address

and Principal

Place

of

Business Address

PURPOS

This is in agreement between the Surety and the

Principal under which the

Surety,

its successors

and

assignees, agree to be

responsible

for the payment of any final

judgment

or

judgments against the Principal

for

public

liability

and property

damage

claims in the sums prescribed herein,

subject to

the governing provisions

and following conditions.

GOVERNING 1) ection

18 of the Bus Regulatory Reform Act of 1982

PROVISIONS (2) ules

and regulations of

the

Federal Highway Administration's Bureau of

Motor

Carrier Safety (Bureau)

(3) ules and regulations of the Interstate Commerce

Commission 1ICC

CONDITIONS The Principal is or intends

to

become

a motor

carrie

of passengers subject to the applicable

governing

provisions relating

to'

financial responsibility for the protection of the public.

This bond assures compliance

by

the Principal with the applicable

governing provisions, and shall inure to the benefit of

any

person or

persons who

shall

recover a final judgment

or

judgments against the Principal

for public liability or property damage

claims excluding injury to

or death

of

the

Principal's

employees

while

engaged in the course

of their employment,

and

loss

of

or

damage

to property

of

the

Principal, and th cargo transported

by

the Principal).

If

every

final

judgment

shell be

paid

for

such claims

resulting from the

negligent

operation,

maintenance,

or

use

of

motor

vehicles

in

transportation

subject

to the

applicable

governing provisions, then this obligation shall

be

void,

otherwise it

will

remain in full effect.

Within the

limits described

herein, the

Surety extends to such losses regardless of whether

such motor vehicles are specificaly

described herein and whether occurring on the route or in the territory

authorized to be served

by

the Principal or elsewhere.

The

liability of the Surety for-each motor vehicle

subject

to the applicable

governing

provisions for

each accident shell not exceed

S_

and shall

be

a ontinuing one notwithstanding any

recovery thereunder.

The surety

agrees, upon telephone request by an

authorized representative of the Bureau or ICC. to verify

that the surety

bond

is in force

as

of

a

particular

date. The telephone number

to call is:_.

This

bond is

effective from (12:01 a.m.,

standard time,

ast

he address of the Principal as stated herein) and

shall

continue in

force

until

terminated asdescribed

herein.

The Principal

or

the

Surety

mayast any time terminate this

bond by giving

41)

hrity

five

35)

days

notice

in

writing to the

other

party

Isaid

35 days

notice

to commence

from

the date

the notice

is

mailed.

proof

of

mailing

shall

be sufficient

proof

of notice), and (2)f

the

Principal is

subject to the ICC s

urisdiction,

by providing

thirty 30) ays

notice

to

th

ICC Isaid 30 days

notice

to commence

from the date notice is received by the ICC at ts

office in

Washington, D.C.).he Surety

shall not

be

liable

for

the payment of any judgment

or judgments

against the

rincipal for public

liability

dr

roperty damage claims

resulting

from

accidents

which occur

after

the termination

6f this bond as escribed herein,

but su h termination shell

not affect

the

liability

of the Surety from

the

payment

of any such

judgment

or judgments resulting

from

accidents

which

occur

during the time

the bond

is

in

effect.

ate

AFFIX CORPORATE

SEAL)

Surety

ity Stale

ACKNOWLEDGMENT OF

SURETY

ST TE OF

COUNTY

OF

On

this _ day

of

19

- before me personally came

who,

being by

me duly

sworn

did

depose

and say

that

he resides in

; hat

he

is

the

of

the

the

corporation

described in

and

which

executed the foregoing

instrument; that

he

knows the

seal of

said

corporation; that

the

seal

affixed to

said

instru-

ment issuch corporate

seal;

that t

as so affixed by

order

of

the board

of

directors of said

corporation;

that he

signed

his name thereto by

like

order, an d

he duly acknowledged to me

that he executed

the same

for

an

on

behalf of

said corporation.

OFFICIAL

SEAL)

Title

of

offical

admlnitering

oath

Surety

Company ie

o

Form MCS

111-83

I R

oc.

83 14251

Filed

5-27-83: 8:45

am]

BILLING

CODE

4910-22-C