Rule2024-03782
Exemption From Operating Authority Regulations for Providers of Recreational Activities
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 26, 2024
Effective
April 26, 2024
Issuing agencies
Transportation DepartmentFederal Motor Carrier Safety Administration
Abstract
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).
Full Text
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<title>Federal Register, Volume 89 Issue 38 (Monday, February 26, 2024)</title>
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[Federal Register Volume 89, Number 38 (Monday, February 26, 2024)]
[Rules and Regulations]
[Pages 13984-13998]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-03782]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Part 372
[Docket No. FMCSA-2023-0007]
RIN 2126-AC57
Exemption From Operating Authority Regulations for Providers of
Recreational Activities
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), Department
of Transportation (DOT).
ACTION: Final rule.
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SUMMARY: FMCSA amends its regulations to implement the statutory
exemption from its operating authority registration requirements for
providers of recreational activities. The exemption applies to motor
carriers operating a motor vehicle designed or used to transport
between 9 and 15 passengers (including the driver), whether operated
alone or with a trailer attached to the transport vehicle, if the motor
vehicle is operated by a person that provides recreational activities
within a 150 air-mile radius of the location at which passengers
initially boarded the motor vehicle at the beginning of the trip. FMCSA
also defines recreational activities to clarify the exemption,
adopting, in response to a comment, a definition modified from that
proposed in the notice of proposed rulemaking (NPRM).
DATES: This final rule is effective April 26, 2024.
Petitions for Reconsideration of this final rule must be submitted
to the FMCSA Administrator no later than March 27, 2024.
FOR FURTHER INFORMATION CONTACT: Mr. Antonio Harris, Registration,
Licensing and Insurance Division, Office of Research and Registration,
FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001; (202) 366-
2964; <a href="/cdn-cgi/l/email-protection#55343b213a3b3c3a7b3d3427273c2615313a217b323a23"><span class="__cf_email__" data-cfemail="e2838c968d8c8b8dcc8a8390908b91a2868d96cc858d94">[email protected]</span></a>. If you have questions on viewing or
submitting material to the docket, call Dockets Operations at (202)
366-9826.
[[Page 13985]]
SUPPLEMENTARY INFORMATION: FMCSA organizes this final rule as follows:
I. Availability of Rulemaking Documents
II. Executive Summary
A. Purpose and Summary of the Regulatory Action
B. Costs and Benefits
III. Abbreviations
IV. Legal Basis
V. Discussion of Proposed Rulemaking and Comments
A. Proposed Rulemaking
B. Comments and Responses
VI. Changes From the NPRM
VII. Severability
VIII. Section-by-Section Analysis
IX. Regulatory Analyses
A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563
(Improving Regulation and Regulatory Review), E.O. 14094
(Modernizing Regulatory Review), and DOT Regulatory Policies and
Procedures
B. Congressional Review Act
C. Regulatory Flexibility Act
D. Assistance for Small Entities
E. Unfunded Mandates Reform Act of 1995
F. Paperwork Reduction Act
G. E.O. 13132 (Federalism)
H. Privacy
I. E.O. 13175 (Indian Tribal Governments)
J. National Environmental Policy Act of 1969
I. Availability of Rulemaking Documents
To view any documents mentioned as being available in the docket,
go to <a href="https://www.regulations.gov/docket/FMCSA-2023-0007/document">https://www.regulations.gov/docket/FMCSA-2023-0007/document</a> and
choose the document to review. To view comments, click this final rule,
then click ``Browse Comments.'' If you do not have access to the
internet, you may view the docket online by visiting Dockets Operations
at U.S. Department of Transportation, 1200 New Jersey Avenue SE,
Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays. To be sure someone is there to help
you, please call (202) 366-9317 or (202) 366-9826 before visiting
Dockets Operations.
II. Executive Summary
A. Purpose and Summary of the Regulatory Action
Section 23012 of the Infrastructure Investment and Jobs Act (IIJA)
(Pub. L. 117-58, 135 Stat. 429 (H.R. 3684, Nov. 15, 2021)) amended 49
United States Code (U.S.C.) 13506 by adding, in paragraph (b)(4), a new
exemption from FMCSA's operating authority registration requirements.
FMCSA adds new regulatory text implementing this statutory exemption.
The exemption from operating authority registration applies to motor
carriers operating a motor vehicle designed or used to transport
between 9 and 15 passengers (including the driver), whether operated
alone or with a trailer attached to the transport vehicle, if the motor
vehicle is operated by a person \1\ that provides recreational
activities and the transportation is provided within a 150 air-mile
radius of the location at which passengers initially boarded the motor
vehicle at the outset of the trip.
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\1\ While the statute refers to a ``person,'' that term can
refer both to an individual or to a motor carrier under the
definitions of that term in 49 U.S.C. 13102(18) and 1 U.S.C. 1.
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FMCSA also defines recreational activities to clarify the
exemption. The statute, which requires that the motor vehicle be
operated ``by a person that provides recreational activities,'' does
not define recreational activities. The Agency's definition clarifies
the types of recreational activities FMCSA has determined would qualify
for the exemption in 49 U.S.C. 13506(b)(4). FMCSA adopts a definition
of recreational activities consistent with the activities that Congress
outlined in another section of the IIJA that uses this term. Section
11512 of the IIJA provided examples of ``groups representing
recreational activities and interests'' in subsection (c)(4) which
provided some insight as to legislative intent for the term
recreational activities in section 23012. The definition FMCSA adopts
in implementing section 23012 includes activities Congress mentions in
section 11512 and also describes activities that fall outside the
intended scope of the term. This language is intended to illustrate
which activities are within the exemption, based on the intent of
Congress, and to allow sufficient flexibility for analysis of the
term's applicability to activities not specified in the regulation.
B. Costs and Benefits
The cost savings associated with this rulemaking include changes in
paperwork, fees, and insurance costs associated with maintaining for-
hire operating authority. Because there is no pre-existing definition
of recreational activities, motor carriers previously may have been
interpreting their eligibility for the operating authority exemption in
varying ways. Through this rulemaking, there will be increased costs
for motor carriers that inappropriately interpreted their eligibility
for the exemption, and decreased costs for those carriers that now have
clear regulatory language to support use of the exemption. The
differing interpretations by regulated entities and enforcement
officials may have hindered consistent enforcement practices, thereby
impacting business-related decisions in providing transportation for
recreational activities. The clarification in this rule may resolve
possible information asymmetry and enforcement differences by creating
a common understanding between FMCSA and motor carriers. Because this
rule may also lead to an increase in exemption use, it will benefit
carriers by improving the efficiency of their business operations and
increase both consumer and producer surplus.
III. Abbreviations
AOA America Outdoors Association
AWM AWM Associates, LLC
BEA Bureau of Economic Analysis
BLS Bureau of Labor Statistics
CE Categorical Exclusion
CFR Code of Federal Regulations
DOL U.S. Department of Labor
DOT Department of Transportation
E.O. Executive Order
FMCSA Federal Motor Carrier Safety Administration
FMCSRs Federal Motor Carrier Safety Regulations
FR Federal Register
FRFA Final Regulatory Flexibility Analysis
GDP Gross Domestic Product
ICR Information Collection Request
IRFA Initial Regulatory Flexibility Analysis
IIJA Infrastructure Investment and Jobs Act
MCMIS Motor Carrier Management Information System
NAICS North American Industry Classification System
NAMIC National Association of Mutual Insurance Companies
NPRM Notice of Proposed Rulemaking
OEWS Occupational Employment and Wage Statistics
OMB Office of Management and Budget
PIA Privacy Impact Assessment
PTA Privacy Threshold Assessment
RIA Regulatory Impact Analysis
Secretary The Secretary of the Department of Transportation
SBA Small Business Administration
UMRA Unfunded Mandates Reform Act of 1995
URS Unified Registration System
U.S.C. United States Code
USDOT United States Department of Transportation
Vehicle Associations Motorcycle Industry Council, Specialty Vehicle
Institute of America, and Recreational Off-Highway Vehicle
Association
IV. Legal Basis
Section 23012 of the IIJA amended 49 U.S.C. 13506 by adding a new
exemption from the requirement to obtain operating authority
registration for ``providers of recreational activities'' operating
passenger vehicles designed or used to transport between 9 and 15
passengers (including the driver) (see 49 U.S.C. 13506(b)(4)). The
statute, which requires that the motor vehicle be operated ``by a
person that provides recreational activities,'' does not define
[[Page 13986]]
recreational activities. This final rule defines recreational
activities to clarify the exemption's applicability.
Under Title 49, Code of Federal Regulations (CFR) 1.87(a)(5), the
authority of the Secretary of the Department of Transportation (the
Secretary) to carry out the functions relating to the registration
requirements in 49 U.S.C. 13901 and 13902 is delegated to the FMCSA
Administrator. Sections 13901 and 13902 generally require that any
person wishing to provide transportation subject to jurisdiction under
subchapter I of chapter 135 \2\ must be registered as a motor carrier,
defined in 49 U.S.C. 13102(14) as ``a person providing motor vehicle
transportation for compensation.'' The requirements of these sections,
which are enforced under Sec. 392.9a (``Operating authority''), are
the basis for the rules governing applications for operating authority
registration in 49 CFR part 365.
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\2\ Absent an exemption, the Secretary has jurisdiction over
transportation by motor carrier and the procurement of that
transportation, to the extent that passengers, property, or both,
are transported by motor carrier in interstate commerce (49 U.S.C.
13501). This authority has been delegated to the FMCSA Administrator
under 49 CFR 1.87(a)(3).
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Under 49 CFR 1.87(a)(3), the authority of the Secretary to carry
out the functions related to the jurisdiction requirements in 49 U.S.C.
13506 is delegated to the FMCSA Administrator. Section 13506 provides
miscellaneous motor carrier transportation exemptions, including the
exemption from operating authority for providers of recreational
activities added by the IIJA. The statutory exemption provided in
section 13506 provides the basis for the regulatory exemption added
under this rule in 49 CFR 372.113, including the definition of
recreational activities added to 49 CFR 372.107.
V. Discussion of Proposed Rulemaking and Comments
A. Proposed Rulemaking
On June 21, 2023, FMCSA published in the Federal Register (Docket
No. FMCSA-2023-0007, 88 FR 40146) an NPRM titled ``Exemption from
Operating Authority Regulations for Providers of Recreational
Activities.'' The NPRM proposed a new Sec. 372.113 that outlines the
exemption from operating authority registration for providers of
recreational activities in 49 U.S.C. 13506(b)(4). This new section
would reflect the statutory language and incorporate the exemption into
the FMCSRs. The NPRM also proposed adding a definition of recreational
activities to Sec. 372.107 which would provide a clear description of
the types of activities that qualify for the exemption in 49 U.S.C.
13506(b)(4). The proposed definition set out the meaning of
recreational activities, provided a non-exhaustive list of included
activities, and identified two types of excluded activities. The NPRM
asked for comments addressing whether the last part of the definition,
excluding certain types of activities, should be retained or removed.
B. Comments and Responses
FMCSA solicited comments concerning the NPRM for 60 days ending
August 21, 2023, and by that date four comments were received. AWM
Associates, LLC (AWM), the National Association of Mutual Insurance
Companies (NAMIC), and a private citizen each submitted a comment, and
a joint comment was submitted by the Motorcycle Industry Council,
Specialty Vehicle Institute of America, and Recreational Off-Highway
Vehicle Association (the ``Vehicle Associations'').
FMCSA did not receive any comments regarding the portion of the
recreational activities definition that excludes certain types of
activities. The exclusions are provided to clarify that certain
activities are exempt activities where the service provided by the
motor carriers mainly focuses on transportation from one location to
another. In such cases, the motor carrier's business is in fact selling
transportation--not providing recreational activities. FMCSA has
received inquiries illustrative of these types of activities. For
example, a bus company offering scheduled route service with multiple
stops would not fall within the exemption merely because one of the
scheduled stops was at or near a water park or a horseback riding
stable. Likewise, motor carriers that advertise and provide alcohol,
music, or other ``party'' activities on board the vehicle as the
principal activity or purpose of the transportation would not be
eligible for the exemption. In these situations, the activity cannot be
completed and has no purpose without the transportation. The
transportation in such circumstances is integral to the activities,
rather than incidental. Accordingly, the definition in Sec. 372.107
explicitly excludes any activity: (1) for which the activity offered or
sold is occurring simultaneously with the transportation; or (2) for
which the transportation is the primary service offered for sale.
AWM
Comment: AWM objected to the creation of an exemption from the
operating authority registration rules for providers of recreational
activities and questioned whether the cost of compliance for providers
of recreational activities under the current regulations is burdensome.
Going beyond the exemption at issue, AWM stated that the FMCSRs are
unclear regarding which motor carriers are required to apply for
operating authority under part 365. AWM also questioned whether the
providers of recreational activities would be required to obtain
operating authority under part 365.
Response: The exemption being added to Sec. 372.113 simply
reflects the statutory language in 49 U.S.C. 13506(b)(4) that is
currently in effect and incorporates the statutory exemption from
operating authority registration into the FMCSRs for convenient
reference. FMCSA is not determining through this rulemaking whether
there should be an exemption from the operating authority registration
rules for providers of recreational activities; that decision was made
by Congress when it passed the IIJA which created a statutory
exemption. FMCSA's role in this rulemaking is to define the term
recreational activities and consider the regulatory and economic
impacts of clarifying the definition. The Agency considers the
objection to the creation of the exemption outside the scope of the
rule and declines to make any changes to the rule based on it.
AWM's comment questions whether the cost of obtaining and
maintaining operating authority is burdensome, and it critiques
portions of the comment from the America Outdoors Association (AOA)
relating to this issue. The AOA comment, which relates to operating
authority for recreational activity providers, predates both the IIJA
and this rule, and AOA submitted it in response to a DOT notice
requesting that the public identify and provide input on the
Department's existing guidance documents that are good candidates for
repeal, replacement, or modification.\3\ The Agency added AOA's comment
to the docket for this rulemaking and cited it in the NPRM in support
of its proposed definition of the term recreational activities.
However, the Agency did not rely on AOA's comment in the regulatory
impact analysis (RIA). The Agency's analysis accounts for the impact of
the statutory exemption, which was enacted after AOA's
[[Page 13987]]
comment was submitted to FMCSA. The Agency's RIA considers the impact
of codifying and clarifying the statutory exemption currently in
effect, whereas AWM's comment is directed towards AOA's comments on
cost and the impact of establishing the exemption as an initial matter.
Therefore, the Agency considers this portion of AWM's comment outside
the scope of the rule and declines to make any changes to the rule
based on it.
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\3\ AOA's comment was submitted in response to DOT's Notice of
Review of Guidance, 84 FR 1820, Feb. 5, 2019.
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Regarding the applicability of operating authority requirements in
part 365, 49 U.S.C. 13901 and 13902 generally require that any person
that wishes to provide transportation subject to jurisdiction under
subchapter I of chapter 135 be registered as a motor carrier, defined
in 49 U.S.C. 13102(14) as ``a person providing motor vehicle
transportation for compensation.'' The requirements of these sections,
which are enforced under Sec. 392.9a (``Operating authority''), are
the basis for the rules governing applications for operating authority
registration in 49 CFR part 365. Part 365 states that the rules
governing applications for operating authority apply to motor carriers
of property or passengers.\4\ Congress established the operating
authority registration exemption for providers of recreational
activities carrying 9 to 15 passengers when it passed the IIJA. This
rulemaking seeks only to clarify the statutory exemption by defining
the term recreational activities. This rulemaking does not make any
changes to the operating authority provisions in 49 CFR part 365. The
Agency considers this portion of AWM's comment outside the scope of the
rule and declines to change the rule based on it.
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\4\ Further explanation of the regulations applicable to
passenger motor carriers is provided in Appendix A to Part 390--
Applicability of the Registration, Financial Responsibility, and
Safety Regulations to Motor Carriers of Passengers.
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The Vehicle Associations
Comment: The Vehicle Associations generally supported the proposed
exemption but proposed a modification to the definition of recreational
activities. They proposed modifying the definition to state that
recreational activities means motorized and non-motorized activities,
and to add off-highway vehicle driving and riding to the list of
activities expressly included. The Vehicle Associations stated that
this modification is supported by the inclusion of off-highway
motorcycling, all-terrain vehicles, and other off-road motorized
vehicle activities in section 11512 of the IIJA, which is the IIJA
section the Agency cited in the NPRM in support of the proposed
definition. The Vehicle Associations also stated that the modified
definition would be consistent with recreation-related terms defined
elsewhere in Federal statute, as well as lists of recreational
activities provided as examples by Federal land management agencies.
Response: The Agency adopts the Vehicle Associations' proposed
modification in part. The Agency agrees that adding ``off-highway
vehicle driving and riding'' to the non-exhaustive list of covered
activities will help clarify the exemption. As the Vehicle Associations
note, inclusion of these activities is supported by the list of
recreational activities in section 11512 of the IIJA. Although that
section appears in a separate division and title of the IIJA from the
motor carrier safety provisions in Division B, Title III, and does not
conclusively define the scope of the exemption in section 23012, it
does provide some insight into the legislative intent, as explained in
the NPRM. The Agency adopts the addition of ``off-highway vehicle
driving and riding'' to align with that intent. The Agency considers
the other part of the proposed modification, the addition of the phrase
``motorized and non-motorized,'' unnecessary and declines to adopt it.
NAMIC
Comment: NAMIC raised a concern that ``expanding eligibility for an
exemption from federal requirements for insurance coverage . . . could
create confusion for policyholders and may not be administratively
possible for insurers.'' NAMIC raised a further concern that differing
State and Federal requirements for insurance coverage risk confusion
and underinsurance among motor carriers. NAMIC suggested further
investigation into the availability of ``coverage on a monthly basis
and for which coverage can be stopped and started at reasonable notice
periods,'' and whether ``states will permit similar staggering of
insurance coverage for such vehicles.''
Response: As explained in response to AWM's comment, this rule
codifies and clarifies in the CFR an existing statutory exemption from
operating authority requirements. Although operating authority is
linked to insurance through financial responsibility requirements, this
rule does not create or expand any exemption to Federal insurance
requirements more broadly because motor carriers eligible for the
operating authority exemption may still be required to maintain
financial responsibility under other regulations in the FMCSRs (see,
e.g., 49 CFR 387.31(a)). The Agency declines to make any changes to the
final rule based on NAMIC's concern regarding expansion of an exemption
from Federal insurance requirements.
Regarding potential confusion with State insurance requirements,
the Agency believes this rule will alleviate confusion. The rule
provides a definition for recreational activities, consistent with the
Agency's understanding of congressional intent when establishing the
exemption, to create a common understanding among motor carriers and
enforcement officials about the exemption. The rule should clarify the
Federal requirements and has no impact on the applicable State
requirements. The Agency disagrees that the rule increases the risk of
confusion as compared to the statutory exemption in 49 U.S.C.
13506(b)(4) standing alone, and it declines to make any changes to the
exemption based on NAMIC's comment. State insurance requirements are
relevant to two scenarios in the RIA, because a seasonal motor carrier
eligible for the exemption may still have to carry insurance in the
off-season to satisfy State requirements, depending on its particular
circumstances. The Agency has added a statement in the RIA to clarify
that cost impacts will vary depending on State insurance coverage
requirements.
Whether certain insurance policies are available to motor carriers
providing recreational activities eligible for the operating authority
exemption, where such policies offer cost savings to the motor carriers
due to the exemption, is a separate concern from the applicability of
the exemption. Changing the extent of the exemption is outside the
Agency's authority, and the Agency declines to make any changes to the
exemption based on this portion of NAMIC's comment but does consider it
in relation to the RIA for the rule.
In the NPRM, the Agency's RIA included an estimate of potential
insurance cost savings, among other potential cost savings, for
eligible motor carriers.\5\ The Agency requested comments on its
estimates of liability insurance costs and the administrative costs of
researching liability insurance or other financial responsibility
options,
[[Page 13988]]
but the Agency did not receive any comments on this issue. NAMIC
suggested further research into the availability of monthly insurance
coverage options for exemption-eligible motor carriers, but otherwise
the Agency did not receive any data or other information regarding its
insurance cost estimates.
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\5\ Whether a motor carrier eligible for the operating authority
exemption in this rule sees an impact to their insurance costs as a
result of this rule depends on a number of factors: (1) whether the
motor carrier operates year-round, (2) whether they operate only
seasonally, but maintain year-round insurance coverage to satisfy
other Federal or State requirements, or (3) whether they are already
using the statutory operating authority exemption. Although the
exemption in this rule will not impact the insurance costs for all
carriers, they may realize other benefits such as administrative
cost savings, as described elsewhere in the rule.
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Based on the information gathered and the Agency's experience
administering the relevant regulations, FMCSA believes it is possible
for a motor carrier providing recreational activities on a seasonal
basis to carry an insurance policy during its operating season,
terminate the policy at the end of the season, and obtain a new policy
at the beginning of its next operating season.\6\ The NPRM RIA used the
forgone insurance premiums in the offseason as an estimate of insurance
cost savings for motor carriers in this scenario. The Agency maintains
that this method provides a reasonable estimate of the potential
insurance cost savings, even though the actual insurance cost savings
realized by motor carriers in this scenario may differ depending on
their specific insurer, policy, location, and other particular
circumstances. The Agency has added a statement in the RIA to clarify
that cost impacts will vary depending on State insurance coverage
requirements and has removed quantified estimates of insurance cost
savings. For further assumptions made on insurance coverage, refer to
the section labeled ``Insurance'' in the RIA.
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\6\ For example, Progressive offers policyholders the option to
adjust coverage based on seasonal changes (Progressive Commercial
Auto Insurance, available at <a href="https://www.progressivecommercial.com/commercial-auto-insurance/">https://www.progressivecommercial.com/commercial-auto-insurance/</a> (accessed Sept. 20, 2023)).
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Comments Outside the Scope of the Rulemaking
Comment: A private citizen objected to the creation of an exemption
from the operating authority registration rules for providers of
recreational activities.
Response: As explained in response to AWM's comment, the exemption
that is being added to Sec. 372.113 reflects the statutory language in
49 U.S.C. 13506(b)(4) and incorporates the statutory exemption into the
FMCSRs. FMCSA is not determining through this rulemaking whether there
should be an exemption from the operating authority registration rules
for providers of recreational activities. The Agency considers this
comment outside the scope of the rule and declines to make any changes
to the rule based on it.
VI. Changes From the NPRM
In response to a comment, FMCSA is changing the definition of
recreational activities in this final rule from that proposed in the
NPRM. The Agency is modifying the definition of recreational activities
in Sec. 372.107 to include off-highway vehicle driving and riding in
the non-exhaustive list of activities provided as examples within the
definition. The Agency is also making a grammatical change to the last
sentence of the definition to give the numbered clauses parallel
structure.
VII. Severability
Congress created an exemption from FMCSA's operating authority
registration rules for ``providers of recreational activities.'' (49
U.S.C. 13506(b)(4)). This final rule adds new regulatory text
implementing this statutory exemption and defines the term recreational
activities. This final rule is meant to operate holistically in
addressing a range of issues necessary to ensure the implementation of
the exemption. However, FMCSA recognizes that certain provisions focus
on unique topics. Therefore, FMCSA finds that the various provisions
within this rule are severable and able to operate functionally if one
or more provisions were rendered null or otherwise eliminated. The
remaining provision or provisions within the rule will continue to
operate functionally if any one or more provisions were invalidated and
any other provision(s) remained. In the event a court were to
invalidate one or more of this final rule's unique provisions, the
remaining provisions should stand, thus allowing this congressionally
mandated exemption to continue to operate.
VIII. Section-by-Section Analysis
This section-by-section analysis describes the proposed changes in
numerical order.
Section 372.107 Definitions
As proposed in the NPRM, FMCSA adds a new paragraph (i), which
defines recreational activities.
Section 372.113 Providers of Recreational Activities
As proposed in the NPRM, FMCSA adds a new Sec. 372.113 to subpart
A of 49 CFR 372. This new section outlines the exemption from operating
authority registration in 49 U.S.C. 13506(b)(4).
IX. Regulatory Analyses
A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O.
13563 (Improving Regulation and Regulatory Review), E.O. 14094
(Modernizing Regulatory Review), and DOT Regulatory Policies and
Procedures
FMCSA has considered the impact of this final rule under E.O. 12866
(58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, E.O. 13563
(76 FR 3821, Jan. 21, 2011), Improving Regulation and Regulatory
Review, and E.O. 14094 (88 FR 21879, Apr. 11, 2023), Modernizing
Regulatory Review. The Office of Information and Regulatory Affairs
within the Office of Management and Budget (OMB) determined that this
final rule is not a significant regulatory action under section 3(f) of
E.O. 12866, as supplemented by E.O. 13563, and does not require an
assessment of potential costs and benefits under section 6(a)(3) of
that order. Accordingly, OMB has not reviewed it under that E.O.
Purpose
This final rule codifies the exemption for providers of
recreational activities in regulation and defines recreational
activities to clarify this exemption by providing a clear description
of what types of recreational activities do and do not qualify for the
exemption in 49 U.S.C. 13506(b)(4). This ensures that providers of
recreational activities are aware of their eligibility for the
exemption from filing for operating authority that FMCSA is adding in
new Sec. 372.113. Specifically, this rule affects motor carriers
operating a motor vehicle designed or used to transport between 9 and
15 passengers (including the driver), whether operated alone or with a
trailer attached to the transport vehicle, if the motor vehicle is
operated by a person that provides recreational activities and the
transportation is provided within a 150 air-mile radius of the location
at which passengers initially boarded the motor vehicle at the outset
of the trip.
This rule provides clarity to both motor carriers and enforcement
officials regarding which carriers qualify for the new exemption in
section 23012 of the IIJA as of November 15, 2021. Because Congress did
not define recreational activities and there is no pre-existing
definition of recreational activities in statute or regulation, FMCSA
is bringing the FMCSRs into alignment with the IIJA's exemption by
adding a new definition of that term. This clarity resolves possible
information asymmetry currently affecting the regulated industry and
enforcement
[[Page 13989]]
officials as to which carriers qualify for the operating authority
exemption.
Baseline
For the purposes of this analysis, the changes in this rule are
compared to the baseline established by section 23012 of the IIJA and
the current requirements for providers of recreational activities under
49 U.S.C. 13901 and 13902 and 49 CFR part 365. As discussed above, the
IIJA created a new exemption from the requirement to obtain FMCSA
operating authority registration for providers of recreational
activities. Accordingly, this exemption has been available to these
motor carriers since the IIJA was enacted on November 15, 2021.
Therefore, the incremental impacts of this rule relative to the
baseline lie in how the affected industry and enforcement officials
have been interpreting the term in the absence of a definition in the
FMCSRs.
Uncertainties
The Agency relies on the Motor Carrier Management Information
System (MCMIS) database to obtain information on commercial motor
carriers subject to the FMCSRs. While MCMIS does contain data on
passenger vehicle size (e.g., weight and capacity) and type, it does
not track industry type, nor whether an operating authority exemption
is applicable. Consequently, the Agency knows neither the magnitude of
the population affected by this rule, nor the degree to which passenger
carriers are currently taking advantage of the exemption. Therefore,
FMCSA estimates how different carriers will be impacted by costs and
benefits on a per-unit basis, depending on their current behavior.
In the NPRM, the Agency invited the public to provide information
to address uncertainty surrounding the size of the affected population
and the frequency of exemption use. While FMCSA did not receive such
information, a comment from AWM provided questions about whether an
exemption from the current requirements for obtaining and maintaining
operating authority was necessary. However, FMCSA is not determining
through this rulemaking whether there should be an exemption from the
operating authority registration rules for providers of recreational
activities. This decision was made by Congress when it passed the IIJA
in 2021, which created a statutory exemption. FMCSA's role in this
rulemaking is only to define the term recreational activities and
consider the impacts of clarifying the exemption. The Agency will
therefore not revise the rule in response to comments outside of that
scope.
Carrier Cost Components
The resulting cost impacts of the definitional clarification in
this rule include changes in paperwork, fees, and insurance costs
associated with maintaining operating authority. Because there is no
pre-existing definition of recreational activities, motor carriers may
be interpreting their eligibility for the operating authority exemption
in varying ways. Depending on current interpretations, this rule will
either increase, decrease, or have no incremental impact on the degree
to which the operating authority exemptions are used relative to the
baseline. Because FMCSA is unable to ascertain how various carriers
interpreted this exemption set forth by section 23012 of the IIJA in
2021, the Agency estimates the impacts of this rule based on four
hypothetical scenarios of exemption use. These four scenarios make use
of the forms and insurance cost analyses set forth below, in advance of
the scenarios.
Forms
Currently, there are several forms that providers of recreational
activities are responsible for submitting to FMCSA in order to maintain
operating authority registration. As detailed later in this analysis,
the use of these forms, as explained in Table 1, may change as a result
of this rule, depending on how the affected carriers are interpreting
this exemption.
Table 1--Forms Currently Used in Maintaining Operating Authority
------------------------------------------------------------------------
Form Affected groups
------------------------------------------------------------------------
Motor Carrier Automobile Bodily Injury Carriers that must provide
and Property Damage Liability proof of liability insurance
Certificate of Insurance (BMC-91 or meeting the minimum levels of
BMC-91X). financial responsibility.
Motor Carrier Records Change (MCSA- Carriers reinstating operating
5889). authority.
Request for Revocation of Authority Carriers voluntarily revoking
Granted (OCE-46). operating authority.
Application for Motor Passenger Carrier Carriers with an existing USDOT
Authority (OP-1(P)). number wishing to expand to an
operation requiring operating
authority.
------------------------------------------------------------------------
Tables 2 and 3 display the paperwork burden of these forms to
private entities and to the Government, respectively. These estimates
are based on the Information Collection Request (ICR) supporting
statements associated with each form. For example, Table 2 shows that
Forms BMC-91 and BMC-91X are estimated to take 10 minutes to complete
by an insurance claims and policy processing clerk at a wage rate \7\
of $39.36, leading to a paperwork burden of $7 (10 minutes x $39.36 =
$7).<SUP>8 9</SUP>
---------------------------------------------------------------------------
\7\ DOL, BLS. Occupational Employment and Wage Statistics
(OEWS). National. May 2022. 43-9041 Insurance Claims and Policy
Processing Clerks. Available at <a href="https://www.bls.gov/oes/current/oes439041.htm">https://www.bls.gov/oes/current/oes439041.htm</a> (accessed Sept. 1, 2023).
\8\ This estimate is based on the calculations used in the ICR
titled, ``Financial Responsibility Motor Carriers, Freight
Forwarders and Brokers,'' covered by OMB Control Number 2126-0017.
\9\ The supporting statement for the ``Financial Responsibility
Motor Carriers, Freight Forwarders and Brokers'' ICR estimates
Government costs for Forms BMC-91 and BMC-91X at $0, as they are
filed electronically.
Table 2--Paperwork Costs to Private Sector
[2022$]
----------------------------------------------------------------------------------------------------------------
Hours to
Paperwork Wage submit form Cost per form Filing fee Total cost
----------------------------------------------------------------------------------------------------------------
Forms BMC-91 or BMC-91X by $39.36 0.17 $7 .............. $7
insurance claims processer.....
Form MCSA-5889 by office clerk.. 31.99 0.25 8 $80 88
[[Page 13990]]
Form OCE-46 by office clerk..... 31.99 0.25 8 .............. 8
Form OP-1(P) by office clerk.... 31.99 2 64 300 364
----------------------------------------------------------------------------------------------------------------
Estimates may not total due to rounding.
Table 3--Paperwork Costs to Government
[2023$]
----------------------------------------------------------------------------------------------------------------
GS-9, Step 5 Hours to
Paperwork wage process form Cost per form
----------------------------------------------------------------------------------------------------------------
Form MCSA-5889.................................................. $73.71 0.25 $18
Form OCE-46..................................................... 73.71 0.25 18
Form OP-1(P).................................................... 73.71 6.5 479
----------------------------------------------------------------------------------------------------------------
Estimates may not total due to rounding.
FMCSA computes its estimates of labor costs using data gathered
from several sources. Labor costs comprise wages, fringe benefits, and
overhead. Fringe benefits include paid leave, bonuses and overtime pay,
health and other types of insurance, retirement plans, and legally
required benefits (Social Security, Medicare, unemployment insurance,
and workers compensation insurance). Overhead includes any expenses to
a firm associated with labor that are not part of employees'
compensation; this typically includes many types of fixed costs of
managing a body of employees, such as management and human resource
staff salaries or payroll services. The economic costs of labor to a
firm should include the costs of all forms of compensation and labor-
related expenses. For this analysis, costs of labor to a firm have been
calculated relative to total compensation (base wages, plus fringe
benefits, plus overhead).
The primary source for industry wages is the median hourly wage
data (May 2022) from the U.S. Department of Labor (DOL), Bureau of
Labor Statistics (BLS), Occupational Employment and Wage Statistics
(OEWS).\10\
---------------------------------------------------------------------------
\10\ DOL, BLS. Occupational Employment and Wage Statistics
(OEWS). National. May 2022. Available at: <a href="https://www.bls.gov/oes/current/oes_nat.htm">https://www.bls.gov/oes/current/oes_nat.htm</a> (accessed Sept. 1, 2023).
---------------------------------------------------------------------------
BLS does not publish data on fringe benefits for specific
occupations, but it does for the broad industry groups in its Employer
Costs for Employee Compensation release. For office clerk employees,
this analysis uses an average hourly wage of $28.89 and average hourly
benefits of $14.85 for private industry workers in ``transportation and
warehousing'' \11\ to estimate that fringe benefits are equal to 51.4
percent ($14.85 / $28.89) of wages. For insurance claims processors,
this RIA uses an average hourly wage of $37.31 and average hourly
benefits of $18.92 for private industry workers in ``financial
activities'' \12\ to estimate that fringe benefits are equal to 50.7
percent ($18.92 / $37.31) of wages.
---------------------------------------------------------------------------
\11\ DOL, BLS. Table 4: Employer costs for Employee Compensation
for private industry workers by occupation and industry group, Dec
2022. Available at: <a href="https://www.bls.gov/news.release/archives/ecec_03172023.htm">https://www.bls.gov/news.release/archives/ecec_03172023.htm</a> (accessed Sept. 1, 2023).
\12\ Ibid.
---------------------------------------------------------------------------
For estimating the overhead rates on wages, the Agency used
industry data gathered for the Truck Costing Model developed by the
Upper Great Plains Transportation Institute, North Dakota State
University as a proxy for the overhead cost of employees in the
transportation intermediary and surety and trustee industries.\13\
Research conducted for this model found an average cost of $0.107 per
mile of commercial motor vehicle operation for management and overhead,
and $0.39 per mile for labor, indicating an overhead rate of 27 percent
(27 percent = $0.107 / $0.39, rounded to the nearest whole percent).
---------------------------------------------------------------------------
\13\ Berwick, Farooq. Truck Costing Model for Transportation
Managers. North Dakota State University. Upper Great Plains
Transportation Institute. August 2003. Appendix A, pp. 42-47.
Available at: <a href="https://www.ugpti.org/resources/reports/downloads/mpc03-152.pdf">https://www.ugpti.org/resources/reports/downloads/mpc03-152.pdf</a> (accessed Jan. 5, 2024).
---------------------------------------------------------------------------
It is assumed that FMCSA reviewers will be Federal government
employees located in the Washington, DC region at the GS-9 Step 5 wage
rate.\14\ OPM does not publish annual rates that include fringe
benefits or overhead. OMB does publish an object class analysis of the
budget of the U.S. Government. The Object Class Analysis estimates
that, in 2021, DOT spent $6,351 million in employee compensation and
$2,840 million in employee benefits. FMCSA estimates a fringe benefit
rate of 45 percent ($2,840 / $6,351) for FMCSA personnel. FMCSA uses
the DOT Volpe Center overhead rate of 64 percent for Federal
personnel.\15\ The Volpe Center is a Federal fee-for-service research
and innovation center in the DOT. Unlike most Federal agencies, Volpe
receives no direct appropriation from Congress and must cover direct
and indirect expenses through agreements with project
sponsors.<SUP>16 17</SUP> These indirect costs are recovered through
the overhead rate charged on direct labor costs. Volpe employees are
compensated according to the Federal locality pay tables used for all
Federal employees and their labor costs include the same employee
benefits. Therefore, FMCSA believes that the overhead rate for Volpe
personnel is similar to the rate for all DOT personnel.
---------------------------------------------------------------------------
\14\ OPM Pay & Leave Salaries & Wages. Salary Table 2023-DCB,
Hourly Basic (B) Rates by Grade and Step. Available at <a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/23Tables/html/DCB_h.aspx">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/23Tables/html/DCB_h.aspx</a> (accessed Sept. 5, 2023).
\15\ DOT, Volpe Center. Volpe Project Costs. Available at:
<a href="https://www.volpe.dot.gov/work-with-us/volpe-project-costs">https://www.volpe.dot.gov/work-with-us/volpe-project-costs</a> (accessed
Jan. 4, 2024).
\16\ DOT, Volpe Center. How to Initiate Work. Available at:
<a href="https://www.volpe.dot.gov/work-with-us/how-initiate-work">https://www.volpe.dot.gov/work-with-us/how-initiate-work</a> (accessed
Jan. 4, 2024).
\17\ DOT, Volpe Center. Volpe Project Costs. Available at:
<a href="https://www.volpe.dot.gov/work-with-us/volpe-project-costs">https://www.volpe.dot.gov/work-with-us/volpe-project-costs</a> (accessed
Jan. 4, 2024).
---------------------------------------------------------------------------
[[Page 13991]]
Insurance
In addition to submitting forms to FMCSA, providers of recreational
activities wishing to maintain a valid operating authority registration
must also have proof of liability insurance filed with FMCSA. The
Agency estimates that such liability insurance currently costs entities
an average of $190 per month for one vehicle, or $2,280 per year ($190
x 12 = $2,280).\18\ Using a range of fleet sizes for illustrative
purposes, Table 4 presents the estimated costs currently associated
with maintaining liability insurance by fleet size.
---------------------------------------------------------------------------
\18\ Insuranks Online Insurance Comparison Marketplace. <a href="https://www.insuranks.com/commercial-van-insurance">https://www.insuranks.com/commercial-van-insurance</a> (accessed Sept. 12,
2023). These estimates are quoted from 12 different insurance
companies, including Geico, Progressive, State Farm, and others. The
monthly quotes were summed and then divided by 12 to obtain an
estimated monthly average for the industry: ($115 + $120 + $130 +
$183 + $165 + $180 + $195 + $210 + $221 + $232 + $254 + $270) / 12 =
$190.
Table 4--Current Insurance Estimates by Fleet Size
[2022$]
----------------------------------------------------------------------------------------------------------------
Number of vehicles in fleet Monthly premium Yearly premium
----------------------------------------------------------------------------------------------------------------
1............................................................. $190 $2,280
5............................................................. 950 11,400
10............................................................ 1,900 22,800
----------------------------------------------------------------------------------------------------------------
Exemption Use Scenarios for Analyzing Carrier Costs
The following four scenarios build on the forms and insurance cost
analyses detailed above and examine how the impact of this rule on
carrier costs may vary under different exemption use conditions. The
scenarios are an increase in exemption use by carriers, a decrease in
exemption use by carriers, no change in exemption use, and exemption
use by new carriers entering the industry.
Scenario One: Increase in Exemption Use
Scenario One includes providers of recreational activities that
have been eligible for the operating authority exemption established by
section 23012 of the IIJA in 2021 but are not utilizing it due to the
definitional ambiguity of recreational activities. If there are such
carriers, after publication of this final rule they will understand
they are classified as providers of recreational activities and are,
therefore, eligible for this exemption. This would lead to an
incremental increase in the number of operational authority exemptions
being used relative to the baseline. As explained in detail below,
these carriers will be impacted in different ways by the following
costs and cost savings: financial responsibility compliance costs,
operating authority registration fees, and paperwork costs.
Carriers under Scenario One that are currently maintaining their
operating authority registration year-round would experience cost
savings associated with maintaining financial responsibility. In the
NPRM, the Agency invited the public to provide additional information
on the scenarios presented in the RIA, and the estimated insurance
premiums. While no data were provided on these estimates, NAMIC
suggested that the Agency further research the availability of
insurance policies that provide coverage on a monthly basis, and
whether States would permit similar staggering of required insurance
coverage.
As detailed above in section V.B. Comments and Responses, based on
the information gathered and the Agency's experience administering the
relevant regulations, FMCSA believes it is possible for a motor carrier
providing recreational activities on a seasonal basis to carry an
insurance policy during its operating season, terminate the policy at
the end of the season, and obtain a new policy at the beginning of its
next operating season.\19\ The Agency declines to make any
modifications to this analysis based on this comment.
---------------------------------------------------------------------------
\19\ For example, Progressive offers policyholders the option to
adjust coverage based on seasonal changes (Progressive Commercial
Auto Insurance, available at <a href="https://www.progressivecommercial.com/commercial-auto-insurance/">https://www.progressivecommercial.com/commercial-auto-insurance/</a> (accessed Sept. 20, 2023)).
---------------------------------------------------------------------------
Regarding the second part of NAMIC's comment, the Agency concurs
that the degree of insurance cost savings is dependent on several
factors, including other Federal or State insurance requirements. FMCSA
amends this RIA by removing quantified estimates of insurance cost
savings and acknowledging the varying impacts State insurance
requirements will have on the degree of cost savings.
As described above, FMCSA estimates average monthly insurance
premiums of $190 per vehicle. The Agency maintains that certain motor
carriers will experience insurance cost savings; however, the
quantified amount of those savings may be offset by the need to satisfy
other Federal or State insurance requirements. Motor carriers that do
not have to meet other Federal or State insurance requirements would
save on insurance costs during months they are not in operation.
There may also be cost savings as a result of avoided insurance-
related administrative requirements. Currently, carriers must choose an
insurance plan or other acceptable form of financial responsibility,
and have proof filed with FMCSA whenever they apply for or reinstate
operating authority. The Agency estimates that it takes carriers 8
hours to research and identify which insurance company, financial
surety, or bond provider they will use. Assuming this task is performed
by an office clerk, this activity is estimated to cost each carrier
$256 ($31.99 x 8 hours = $256).\20\
---------------------------------------------------------------------------
\20\ DOL, BLS. Occupational Employment and Wage Statistics
(OEWS). National. May 2022. 43-4071 Office Clerks, General.
Available at: <a href="https://www.bls.gov/oes/current/oes434071.htm">https://www.bls.gov/oes/current/oes434071.htm</a>
(accessed Sept. 9, 2023).
---------------------------------------------------------------------------
As displayed in Table 2, carriers under Scenario One were also
required to ensure that their financial responsibility provider submit
Forms BMC-91 or BMC-91X to FMCSA at a cost of $7 per form. These
administrative requirements for insurance were no longer required after
the enactment of the IIJA in 2021; therefore, the definitional
clarification in this rule may lead to cost savings of $256 to the
carrier and $7 to the insurance company.
Some carriers under Scenario One were filing Form OCE-46 to
voluntarily revoke their operating authority registrations during the
off-season months so that they did not need to maintain insurance at
FMCSA's minimum prescribed levels during those months. To resume
operations, the providers were then required to submit Form MCSA-5889
to reinstate their operating authority registrations during the months
when they were operating. As displayed in Tables 2 and 3, it is
estimated to cost $8 to submit Form
[[Page 13992]]
MCSA-5889, plus a fee of $80 to carriers, and $18 in costs to
FMCSA.\21\ Form OCE-46 is also estimated to cost $8 per carrier and $18
for FMCSA processing time.\22\ As a result of this rule, if there are
carriers under this scenario, they would no longer be subject to the
costs associated with submitting Form MCSA-5889 or Form OCE-46.
---------------------------------------------------------------------------
\21\ This estimate is based on the calculations used in the ICR
titled, ``Motor Carrier Records Change Form'' (Form MCSA-5889),
covered by OMB Control Number 2126-0060. The cost of a paper
submission is $7 and the cost of an electronic submission is $0.
\22\ This estimate is based on the calculations used in the ICR
titled ``Request for Revocation of Authority Granted,'' covered by
OMB Control Number 2126-0018.
---------------------------------------------------------------------------
Scenario Two: Decrease in Exemption Use
It is also possible that this rule will limit the use of this
exemption for certain carriers. Because neither FMCSA nor Congress
provided a definition of recreational activities, there may be carriers
that incorrectly believed they are providers of recreational
activities, but upon issuance of this rule, would realize they are not.
These carriers may currently be incorrectly utilizing this exemption
and revoking their operating authority when they were not eligible to
do so. Therefore, if such carriers exist, they may incur a cost of $88
to submit Form MCSA-5889 as a result of this rulemaking for
reinstatement of their operating authority (Table 2). They would also
need to resume paying for financial responsibility in order to maintain
valid operating authority. Illustrative examples of possible insurance-
related costs are displayed in Tables 4 and 5.
Scenario Three: No Incremental Change in Exemption Use
There may also be eligible carriers that correctly interpreted
Congress' intent and have been utilizing the exemption correctly since
the IIJA's enactment. These carriers are not expected to be impacted by
this rule relative to the baseline. They have already gone through the
steps of voluntarily revoking their operating authority with FMCSA, are
maintaining financial responsibility only while in operation, and are
not paying fees or completing paperwork associated with maintaining
operating authority.
Scenario Four: New Providers
This rule may also affect eligible providers considering engaging
in providing recreational activities in the future. If there are new
carriers considering entering this field that were not aware of the
IIJA exemption, they would no longer need to account for the following
costs as a result of this rule: year-round financial responsibility
premiums required by FMCSA, financial responsibility-related
administrative costs, and operating authority fees and paperwork.
Prior to the enactment of the IIJA, new providers of recreational
activities had to submit the ``Application for Motor Passenger Carrier
Authority'' (Form OP-1(P)).\23\ The Agency estimates that this form
costs $64 with a $300 fee for carriers, and $479 in Government costs
(Tables 2 and 3, respectively).\24\ Additionally, as described in the
Financial Responsibility under Scenario One section, the avoided
insurance-related administrative costs would be $7 for insurance
companies and $256 for carriers. An illustrative example of potential
avoided insurance premium costs is presented in Table 5.
---------------------------------------------------------------------------
\23\ Applicants that have never held a USDOT number or any other
registration issued by FMCSA must file the URS online application
(Form MCSA-1) to obtain a USDOT number and register for operating
authority.
\24\ This estimate is based on calculations used in the ICR
titled ``Licensing Applications for Motor Carrier Operating
Authority,'' covered by OMB Control Number 2126-0016.
---------------------------------------------------------------------------
Government Costs
In addition to the cost to carriers analyzed in the four scenarios
above, this rule may have government costs. The changes implemented by
this rule will not require additional training for enforcement
personnel. The Agency expects that the definitional clarification set
forth in this rule will be communicated to FMCSA personnel and the
Agency's State-based enforcement partners through existing means, such
as policy updates and ongoing training. The Agency will be impacted by
the costs and cost savings associated with this rule, as outlined in
Table 3 ($479 for Form OP-1(P), $18 for Form OCE-46 and Form MCSA-
5889).
Benefits
The affected entities are providers of recreational activities that
typically consist of physically demanding outdoor experiences or
excursions that do not have transportation as an integral part of the
activity itself. Overall, the outdoor recreation economy accounted for
1.9 percent ($454 billion) of current-dollar gross domestic product
(GDP) for the nation in 2021.\25\ Hawaii, Montana, Vermont, Alaska, and
Maine are among the States where outdoor recreation as a percent of
that States' GDP ranks the highest. For example, in 2021, outdoor
recreation accounted for $4.4 billion of Hawaii's $91.1 billion overall
GDP, or 4.8 percent--the highest proportion of any State. In terms of
actual levels, the States that produced the highest outdoor recreation
GDP in 2021 were California ($54.7 billion), Florida ($41.9 billion),
and Texas ($37.5 billion).
---------------------------------------------------------------------------
\25\ DOL, Bureau of Economic Analysis (BEA). BEA Data, Special
Topics, Outdoor Recreation Satellite Account, U.S. and States, 2021.
Current release Nov. 9, 2022. Available at <a href="https://www.bea.gov/data/special-topics/outdoor-recreation">https://www.bea.gov/data/special-topics/outdoor-recreation</a> (accessed Sept 13, 2023).
---------------------------------------------------------------------------
Differences in interpretation between regulated entities and
enforcement officials may be hindering consistent enforcement
practices, thereby impacting business-related decisions in providing
transportation for recreational activities. This rule may resolve this
information asymmetry by creating a common understanding between FMCSA
and motor carriers. Because this rule may also lead to an increase in
exemption use, it will benefit carriers by improving the efficiency of
their business operations and therefore increase both consumer and
producer surplus.
B. Congressional Review Act
This rule is not a major rule as defined under the Congressional
Review Act (5 U.S.C. 801-808).\26\
---------------------------------------------------------------------------
\26\ A major rule means any rule that OMB finds has resulted in
or is likely to result in (a) an annual effect on the economy of
$100 million or more; (b) a major increase in costs or prices for
consumers, individual industries, geographic regions, Federal,
State, or local government agencies; or (c) significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export
markets (5 U.S.C. 802(4)).
---------------------------------------------------------------------------
C. Regulatory Flexibility Act (Small Entities)
The Regulatory Flexibility Act of 1980, Public Law 96-354, 94 Stat.
1164 (5 U.S.C. 601-612), as amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857, March
29, 1996) and the Small Business Jobs Act of 2010 (Pub. L. 111-240, 124
Stat. 2504, September 27, 2010), requires Federal agencies to consider
the effects of the regulatory action on small business and other small
entities and to minimize any significant economic impact. The term
small entities comprises small businesses and not-for-profit
organizations that are independently owned and operated and are not
dominant in their fields, and governmental jurisdictions with
populations of less than 50,000. Accordingly, DOT policy requires an
analysis of the impact of all regulations on small entities, and
mandates that
[[Page 13993]]
agencies strive to lessen any adverse effects on these businesses.
FMCSA has not determined whether this final rule will have a
significant economic impact on a substantial number of small entities.
Therefore, FMCSA prepared an initial regulatory flexibility analysis
(IRFA) for the NPRM and a final regulatory flexibility analysis (FRFA)
for the final rule.
A FRFA must contain the following:
1. A statement of the need for, and objectives of, the rule.
2. A statement of the significant issues raised by the public
comments in response to the IRFA, a statement of the assessment of
the agency of such issues, and a statement of any changes made in
the proposed rule as a result of such comments.
3. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration (SBA) in
response to the proposed rule, and a detailed statement of any
change made to the proposed rule in the final rule as a result of
the comments.
4. A description of and an estimate of the number of small
entities to which the rule will apply or an explanation of why no
such estimate is available.
5. A description of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of
the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record.
6. A description of the steps the agency has taken to minimize
the significant economic impact on small entities consistent with
the stated objectives of applicable statutes, including a statement
of the factual, policy, and legal reasons for selecting the
alternative adopted in the final rule and why each of the other
significant alternatives to the rule considered by the agency which
affect the impact on small entities was rejected.
7. Description of steps taken by a covered agency to minimize
costs of credit for small entities.
1. A statement of the need for, and objectives of, the rule.
Section 23012 of the IIJA amended 49 U.S.C. 13506 by adding a new
exemption in paragraph (b)(4) from the operating authority registration
requirements. FMCSA is adding a new regulatory section incorporating
that statutory exemption and also including a definition for the exempt
operations. The exemption from operating authority registration applies
to motor carriers operating a motor vehicle designed or used to
transport between 9 and 15 passengers (including the driver) whether
operated alone or with a trailer attached to the transport vehicle, if
the motor vehicle is operated by a person that provides recreational
activities and the transportation is provided within a 150 air-mile
radius of the location at which passengers initially boarded the motor
vehicle at the outset of the trip. The new statutory exemption did not
include a definition of recreational activities, creating some
ambiguity in the exemption's applicability. The Agency is codifying the
exemption in regulation and removing ambiguity by defining recreational
activities.
2. A statement of the significant issues raised by the public
comments in response to the IRFA, a statement of the assessment of the
agency of such issues, and a statement of any changes made in the
proposed rule as a result of such comments.
The public comments raised no significant issues in response to the
IRFA. The Agency received four comments from AWM, NAMIC, the Vehicle
Associations, and a private citizen.
In response to the Vehicle Associations' comment, the Agency is
modifying the definition of recreational activities in Sec. 372.107 to
include off-highway vehicle driving and riding in the non-exhaustive
list of activities provided as examples within the definition. As
detailed in section V. Discussion of Proposed Rulemaking and Comments
of this final rule, the Vehicle Associations proposed modifying
recreational activities to include motorized and non-motorized
activities, such as off-highway vehicle driving and riding. The Agency
adopts the Vehicle Associations' proposed modification in part.
As detailed in paragraph 4 of this FRFA, FMCSA provided a wide
range of North American Industry Classification System (NAICS) codes of
the recreational activities industry in the IRFA, in order to capture
all of the potential sectors that providers of recreational activities
may operate under. The addition of ``off-highway vehicle driving and
riding'' to the list of examples is intended for additional
clarification and will not expand the list of affected NAICS codes that
were estimated in the IRFA, as presented in Table 6.
As described in section IX.A Regulatory Analyses, the Agency's
preliminary RIA included quantified estimates of potential insurance
cost savings, among other potential cost savings, for eligible motor
carriers and the Agency invited the public to provide additional
information on these estimates. While no data were provided as to the
estimated premiums, NAMIC suggested that the Agency further research
the availability of insurance policies that provide coverage on a
monthly basis. The Agency maintains that certain motor carriers may
save on insurance costs as a result of this rule, depending on their
particular circumstances as detailed in section IX.A, but the Agency
removes the quantified estimates of that savings from the RIA.
The Agency concurs that the degree of insurance cost savings is
dependent on several factors, including other Federal or State
insurance requirements. Therefore, FMCSA amends this RIA by removing
quantified estimates of insurance cost savings and acknowledging the
varying impacts State insurance requirements will have on the degree of
cost savings. The quantified amount of those savings may be offset by
the need to satisfy other Federal or State insurance requirements.
Motor carriers that do not have to meet other Federal or State
insurance requirements would save on insurance costs during months they
are not in operation.
The remaining comments from AWM and the private citizen did not
relate to the clarification of the recreational activities exemption.
AWM questioned the magnitude of the burden associated with obtaining
and maintaining operating authority, and the private citizen raised
concerns about effects on public land usage. As detailed in section V.
Discussion of Proposed Rulemaking and Comments, FMCSA is not
determining through this rulemaking whether there should be an
exemption from the operating authority registration rules for providers
of recreational activities. This decision was made by Congress when it
passed the IIJA in 2021, which created a statutory exemption. FMCSA's
scope in this rulemaking is only to define the term recreational
activities and consider the impacts of providing that definition to
clarify the exemption. The Agency considers the objections to the
creation of the exemption outside the scope of the rule and declines to
make any changes to the rule based on them.
3. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the SBA in response to the proposed rule, and a
detailed statement of any change made to the proposed rule in the final
rule as a result of the comments.
The Chief Counsel for Advocacy of the SBA filed no comments to the
proposed rule. Thus, FMCSA has nothing to respond to from the Chief
Counsel for Advocacy of the SBA.
4. A description of and an estimate of the number of small entities
to which the rule will apply or an explanation of why no such estimate
is available.
Small entity is defined in 5 U.S.C. 601. Section 601(3) defines a
small entity as having the same meaning as
[[Page 13994]]
small business concern under section 3 of the Small Business Act. This
includes any small business concern that is independently owned and
operated and is not dominant in its field of operation. Section 601(4),
likewise includes within the definition of small entities not-for-
profit enterprises that are independently owned and operated and are
not dominant in their fields of operation. Additionally, section 601(5)
defines small entities as governments of cities, counties, towns,
townships, villages, school districts, or special districts with
populations less than 50,000.
This final rule affects motor carriers operating a motor vehicle
designed or used to transport between 9 and 15 passengers (including
the driver) whether operated alone or with a trailer attached to the
transport vehicle, if the motor vehicle is operated by a person that
provides recreational activities and the transportation is provided
within a 150 air-mile radius of the location at which passengers
initially boarded the motor vehicle at the outset of the trip.
Providers of recreational activities affected by this rule operate
under many different NAICS \27\ codes with differing size standards.
The SBA has released updated small entity size standards since the
publication of the IRFA. The new size standards became effective March
17, 2023.\28\ FMCSA has updated the estimates and size standards in
this FRFA where needed.
---------------------------------------------------------------------------
\27\ More information about NAICS is available at <a href="http://www.census.gov/naics">http://www.census.gov/naics</a> (accessed Sept. 13, 2023).
\28\ SBA Table of Small Business Size Standards Matched to NAICS
effective Mar. 17, 2023, located at <a href="https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf">https://www.sba.gov/sites/sbagov/files/2023-06/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%282%29.pdf</a> (accessed Sept. 13, 2023).
---------------------------------------------------------------------------
In the IRFA for the proposed rule, FMCSA provided a wide range of
NAICS codes in the recreational activities industry, in order to
capture all of the potential NAICS codes that providers of recreational
activities may operate under. In doing so, FMCSA highlighted many
entities that perform various other functions beyond transporting
passengers to and from recreational activities. The Agency also
requested public comment on the NAICS codes analyzed in the IRFA but
did not receive any such comments. Therefore, the Agency assumes the
NAICS codes analyzed in the IRFA are representative of the composition
of the affected industries and is retaining those codes for the
purposes of this FRFA.
As shown in Table 6 below, the SBA size standards for providers of
recreational activities range from $9 million in revenue per year for
the All Other Amusement Recreation Industries NAICS national industry,
to $47 million in revenue per year for Racetracks.
Table 6--SBA Size Standards for Selected Industries
[in millions of 2023$]
------------------------------------------------------------------------
SBA size standard
NAICS code NAICS industry description in millions
------------------------------------------------------------------------
Subsector 487--Scenic and Sightseeing Transportation
------------------------------------------------------------------------
487110................... Scenic and Sightseeing $20.5
Transportation, Land.
487210................... Scenic and Sightseeing 14.0
Transportation, Water.
487990................... Scenic and Sightseeing 25.0
Transportation, Other.
------------------------------------------------------------------------
Subsector 561--Administrative and Support Services
------------------------------------------------------------------------
561520................... Tour Operators............ 25.0
------------------------------------------------------------------------
Subsector 711--Performing Arts, Spectator Sports, and Related Industries
------------------------------------------------------------------------
711212................... Racetracks................ 47.0
711219................... Other Spectator Sports.... 16.5
------------------------------------------------------------------------
Subsector 713--Amusement, Gambling, and Recreation Industries
------------------------------------------------------------------------
713910................... Golf Courses and Country 19.0
Clubs.
713920................... Skiing Facilities......... 35.0
713940................... Fitness and Recreational 17.5
Sports Centers.
713990................... All Other Amusement 9.0
Recreation Industries.
------------------------------------------------------------------------
FMCSA examined data from the 2017 Economic Census, the most recent
Census for which data were available, to determine the percentage of
firms that have revenue at or below SBA's thresholds within each of the
NAICS industries.\29\ Boundaries for the revenue categories used in the
Economic Census do not precisely coincide with the SBA thresholds.
Instead, the SBA threshold generally falls between two different
revenue categories. However, FMCSA was able to make reasonable
estimates as to the percent of small entities within each NAICS code.
---------------------------------------------------------------------------
\29\ U.S. Census Bureau. 2017 Economic Census. Available at
<a href="https://data.census.gov/cedsci/table?q=EC1700&n=48-49&tid=ECNSIZE2017.EC1700SIZEREVEST&hidePreview=true">https://data.census.gov/cedsci/table?q=EC1700&n=48-49&tid=ECNSIZE2017.EC1700SIZEREVEST&hidePreview=true</a> (accessed Sept.
13, 2023).
---------------------------------------------------------------------------
The Agency estimates that many entities affected by this rule fall
under the Scenic and Sightseeing Transportation NAICS subsector (487).
Firms in this subsector utilize transportation equipment to provide
recreation and entertainment. These operations are distinct from
passenger transportation carried out for other types of for-hire
transportation. The recreational activities involved are local in
nature, usually involving a same-day return to the point of
departure.\30\ Industry groups under this subsector include Scenic and
Sightseeing Transportation, Land (4871), Scenic and Sightseeing
Transportation, Water (4872), and Scenic and Sightseeing
Transportation, Other (4879).
---------------------------------------------------------------------------
\30\ U.S. Census Bureau 2022 NAICS Definition. Available at
<a href="https://www.census.gov/naics/?input=48&year=2022&details=487">https://www.census.gov/naics/?input=48&year=2022&details=487</a>
(accessed Sept. 13, 2023).
---------------------------------------------------------------------------
The Scenic and Sightseeing Transportation, Land NAICS national
industry (487110) has a revenue size standard of $20.5 million, which
falls between two Economic Census revenue
[[Page 13995]]
categories, $10 million and $25 million. This industry comprises firms
engaged in various outdoor excursions, including horse-drawn
sightseeing rides. The percentages of Scenic and Sightseeing
Transportation, Land with revenue less than these amounts ranged from
97 percent to 98 percent. Because the SBA threshold is closer to the
higher of these two boundaries, FMCSA has assumed that the percent of
Scenic and Sightseeing Transportation, Land entities that are small
will be closer to 98 percent and is using that figure.
For Scenic and Sightseeing Transportation, Water (487210), the $14
million SBA threshold falls between two Economic Census revenue
categories, $10 million and $25 million. Entities in this national
industry are primarily engaged in providing scenic and sightseeing
transportation on water, such as fishing boat charter operation. The
percentages of Scenic and Sightseeing Transportation, Water with
revenue less than these amounts ranged from 97 percent to 99 percent.
Because the SBA threshold is closer to the lower of these two
boundaries, FMCSA has assumed that the percent of these entities that
are small will be closer to 97 percent and is using that figure.
Scenic and Sightseeing Transportation, Other (487990) focuses on
all other scenic and sightseeing transportation, such as hot air
balloon rides and glider excursions. The SBA size standard for this
national industry is $25 million. The $25 million SBA threshold falls
between two Economic Census revenue categories, $10 million and $25
million. The percentages of these entities with revenue less than these
amounts were 93 percent and 98 percent. Because the SBA threshold
coincides with the higher of these two boundaries, FMCSA has assumed
that the percent of these providers that are small will be closer to 98
percent and is using that figure.
Firms falling under the Travel Arrangement and Reservation Services
industry group (5615) may also be impacted by this NPRM. This industry
group comprises the Travel Agencies (561510), Tour Operators (561520),
and Convention and Visitors Bureaus (561591) national industries.\31\
The Agency assumes that providers of recreational activities fall under
the Tour Operators national industry.
---------------------------------------------------------------------------
\31\ US Census Bureau 2022 NAICS Definition. Available at
<a href="https://www.census.gov/naics/?input=56&year=2022&details=5615">https://www.census.gov/naics/?input=56&year=2022&details=5615</a>
(accessed Sept. 14, 2023).
---------------------------------------------------------------------------
Tour Operators (561520) focuses on arranging and assembling tours,
including travel or wholesale tour operators. The SBA size standard for
this national industry is $25 million, which falls between two Economic
Census revenue categories, $25 million and $100 million. The
percentages of Tour Operators with revenue less than these amounts were
92 percent and 100 percent. The Agency presents a high-end estimate of
100 percent due to limitations in Economic Census data availability.
Revenue data for firms with revenue less than $100,000, which would be
considered small, are suppressed by the Economic Census to avoid
disclosing for individual companies. Because the Agency is unable to
ascertain the revenue for the suppressed firms, the high-end estimate
assumes that all such firms fall under the $25 million SBA threshold
and would be considered small. The low-end estimate assumes the
suppressed firms are not small. Because the SBA threshold is closer to
the lower of these two boundaries, FMCSA has assumed that the percent
of Tour Operators that is small will be closer to 92 percent and is
using that figure.
The Agency estimates that many providers of recreational activities
affected by this NPRM would also fall under the Arts, Entertainment,
and Recreation sector (71). This sector includes a wide range of firms
operating facilities that meet varied cultural, entertainment, and
recreational interests of patrons.\32\ Subsectors under this group
include Performing Arts, Spectator Sports, and Related Industries
(711), Amusement, Gambling, and Recreational Industries (713), and
others.
---------------------------------------------------------------------------
\32\ US Census Bureau 2022 NAICS Definition. Available at
<a href="https://www.census.gov/naics/?input=71&year=2022&details=71">https://www.census.gov/naics/?input=71&year=2022&details=71</a>
(accessed Sept. 5, 2023).
---------------------------------------------------------------------------
The industry groups under the Spectator Sports and Related
Industries (711) subsector cover Spectator Sports (7112). Spectator
Sports includes the Racetracks (711212) and Other Spectator Sports
(711219) national industries.
Racetracks (711212) focuses on firms operating racetracks without
casinos, such as auto, motorcycle, snowmobile, and horse races. The SBA
size standard for this national industry is $47 million. The $47
million SBA threshold falls between two Economic Census revenue
categories, $25 million and $100 million. The percentages of these
entities with revenue less than these amounts were 83 percent and 100
percent.\33\ Because the SBA threshold is closer to the lower of these
two boundaries, FMCSA has assumed that the percent of Racetracks
entities that are small will be closer to 83 percent and is using that
figure.
---------------------------------------------------------------------------
\33\ The Agency presents a high-end estimate of 100 percent due
to limitations in Economic Census data availability. Revenue data
for firms with revenue less than $100,000, which would be considered
small, are suppressed by the Economic Census to avoid disclosing for
individual companies. Because the Agency is unable to ascertain the
revenue for the suppressed firms, the high-end estimate assumes that
all such firms fall under the $47 million SBA threshold. The low-end
estimate assumes the suppressed firms are not small.
---------------------------------------------------------------------------
Other Spectator Sports (711219) focuses on independent athletes,
owners of racing participants (such as cars, dogs, and horses), and
firms engaged in specialized services in support of said participants.
The SBA size standard for this national industry is $16.5 million,
which falls between two Economic Census revenue categories, $10 million
and $25 million. The percentages of these entities with revenue less
than these amounts were 82 percent and 100 percent.\34\ Because the SBA
threshold is closer to the lower of these two boundaries, FMCSA has
assumed that the percent of Other Spectator Sports entities that are
small will be closer to 82 percent and is using that figure.
---------------------------------------------------------------------------
\34\ The Agency presents a high-end estimate of 100 percent due
to limitations in Economic Census data availability. Revenue data
for firms with revenue less than $100,000, which would be considered
small, are suppressed by the Economic Census. Because the Agency is
unable to ascertain the revenue for the suppressed firms, the high-
end estimate assumes that all such firms fall under the $16.5
million SBA threshold. The low-end estimate assumes the suppressed
firms are not small.
---------------------------------------------------------------------------
The industry groups under the Amusement, Gambling, and Recreation
Industries (713) subsector include Amusement Parks and Arcades (7131),
Gambling Industries (7132), and Other Amusement and Recreation
Industries (7139).\35\ The Agency estimates the entities affected by
this NPRM would fall into the third industry group, Other Amusement and
Recreation Industries (7139). This group, as detailed below, covers
firms operating golf courses and country clubs, skiing facilities, and
all other amusement and recreation activities.\36\
---------------------------------------------------------------------------
\35\ US Census Bureau 2022 NAICS Definition. Available at
<a href="https://www.census.gov/naics/?input=71&year=2022&details=713">https://www.census.gov/naics/?input=71&year=2022&details=713</a>
(accessed Sept. 5, 2023).
\36\ US Census Bureau 2022 NAICS Definition. Available at
<a href="https://www.census.gov/naics/?input=71&year=2022&details=7139">https://www.census.gov/naics/?input=71&year=2022&details=7139</a>
(accessed Sept. 5, 2023).
---------------------------------------------------------------------------
Entities falling under Golf Courses and Country Clubs (713910)
primarily engage in operating such facilities, and providing food and
beverage services, equipment rental, or golf instruction. The SBA size
standard for this national industry is $19 million, which falls between
two Economic Census revenue categories, $10 million and $25 million.
The percentages of Golf Courses and
[[Page 13996]]
Country Clubs with revenue less than these amounts were 95 percent and
99 percent. In the IRFA, FMCSA presented the estimated percent of small
entities using a low-end estimate of 95 percent. However, the SBA size
standard for this national industry increased from $16.5 million in
2022 to $19 million in 2023, making the new threshold closer to the
higher of the revenue boundaries. Therefore, FMCSA has assumed that the
percent of these entities that are small will be closer to 99 percent
and is using that figure in the FRFA.
Skiing Facilities (713920) industries primarily operate downhill,
cross country, or related skiing areas, and provide food and beverage
services, equipment rental, and ski instruction. The SBA size standard
for this national industry is $35 million, which falls between two
Economic Census revenue categories, $25 million and $100 million. The
percentages of Skiing Facilities with revenue less than these amounts
were 93 percent and 98 percent.\37\ Because the SBA threshold is closer
to the lower of these two boundaries, FMCSA has assumed that the
percent of these facilities that are small will be closer to 93 percent
and is using that figure.
---------------------------------------------------------------------------
\37\ The Agency presents a high-end estimate of 98 percent which
includes assumptions about limitations in Economic Census data. Some
revenue data for firms that would be considered small (revenue
categories of $100,000 or more and $250,000 to $499,999) are
suppressed by the Economic Census. Because the Agency is unable to
ascertain the revenue for the suppressed firms, the high-end
estimate assumes that all such firms fall under the $35 million SBA
threshold. The low-end estimate assumes the suppressed firms are not
small.
---------------------------------------------------------------------------
The Agency estimates that the majority of entities affected by this
Final Rule would fall under the All Other Amusement Recreation
Industries (713990) national industry. This includes whitewater
rafting, hunting, horseback riding stables, boating clubs, canoeing,
archery and shooting ranges, hiking, and others. The SBA size standard
for this national industry is $9 million. The $9 million SBA threshold
falls between two Economic Census revenue categories, $5 million and
$10 million. The percentages of these providers with revenue less than
these amounts were 60 percent and 99.6 percent. The Agency estimates a
wide range in estimates due to limitations in Economic Census data for
this NAICS category. Specifically, of the 12,688 firms in this
industry, 12,631 have revenue between $100,000 and $10 million.
However, data on small entities with revenue under $250,000 are
suppressed. There are 7,490 small entities (59 percent) with revenue
between $250,000 and $5 million, and 139 firms with revenue between $5
million and $10 million (1.1 percent). Of the 12,688 firms in All Other
Amusement Recreation Industries, there are 5,002 firms without revenue
data (39.4 percent). The high-end estimate assumes all such firms are
small (99.6 percent) and FMCSA uses that figure.
Table 7 below shows the complete estimates of the number of small
entities within the national industries affected by this rule.
Table 7--Estimates of Numbers of Small Entities
----------------------------------------------------------------------------------------------------------------
Total number Number of Percent of all
NAICS code Description of firms small entities firms
----------------------------------------------------------------------------------------------------------------
487110........................... Scenic and Sightseeing 520 512 98
Transportation, Land.
487210........................... Scenic and Sightseeing 1,129 1,097 97
Transportation, Water.
487990........................... Scenic and Sightseeing 169 165 98
Transportation, Other.
561520........................... Tour Operators............... 2,175 1,991 92
711212........................... Racetracks................... 299 248 83
711219........................... Other Spectator Sports....... 1,916 1,577 82
713910........................... Golf Courses and Country 8,076 7,712 99
Clubs.
713920........................... Skiing Facilities............ 203 189 93
713990........................... All Other Amusement 12,688 7,629 60
Recreation Industries.
----------------------------------------------------------------------------------------------------------------
5. A description of the reporting, recordkeeping, and other
compliance requirements of the final rule, including an estimate of the
classes of small entities subject to the requirements and the type of
professional skills necessary for preparation of the report or record.
This rule will not result in new recordkeeping requirements.
6. A description of the steps the agency has taken to minimize the
significant economic impact on small entities consistent with the
stated objectives of applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the alternative
adopted in the final rule and why each of the other significant
alternatives to the rule considered by the agency which affect the
impact on small entities was rejected.
Given that the recreational activities exemption was statutorily
mandated, FMCSA did not have an alternative or discretion as to whether
to adopt the exemption but did consider whether to clarify a definition
of the term recreational activities or to remain silent. FMCSA also
considered the alternative of adding a definition without including
non-exhaustive examples. However, FMCSA believes that remaining silent
or proposing a definition without such examples could result in
confusion or inconsistent enforcement and that it is better to provide
a definition with examples consistent with the legislative intent to
minimize any significant economic impact on small entities.
7. Description of steps taken by a covered agency to minimize costs
of credit for small entities.
FMCSA is not a covered agency as defined in section 609(d)(2) of
the Regulatory Flexibility Act and has taken no steps to minimize the
additional cost of credit for small entities.
D. Assistance for Small Entities
In accordance with section 213(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857),
FMCSA wants to assist small entities in understanding this final rule
so they can better evaluate its effects on themselves and participate
in the rulemaking initiative. If the final rule will affect your small
business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
consult the person listed under FOR FURTHER INFORMATION CONTACT.
Small businesses may send comments on the actions of Federal
employees who enforce or otherwise determine compliance with Federal
regulations to the Small Business Administration's Small Business and
Agriculture Regulatory Enforcement Ombudsman (Office of the National
Ombudsman, see
[[Page 13997]]
<a href="https://www.sba.gov/about-sba/oversight-advocacy/office-national-ombudsman">https://www.sba.gov/about-sba/oversight-advocacy/office-national-ombudsman</a>) and the Regional Small Business Regulatory Fairness Boards.
The Ombudsman evaluates these actions annually and rates each agency's
responsiveness to small business. If you wish to comment on actions by
employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a
policy regarding the rights of small entities to regulatory enforcement
fairness and an explicit policy against retaliation for exercising
these rights.
E. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
(UMRA) requires Federal agencies to assess the effects of their
discretionary regulatory actions. The Act addresses actions that may
result in the expenditure by a State, local, or Tribal government, in
the aggregate, or by the private sector of $192 million (which is the
value equivalent of $100 million in 1995, adjusted for inflation to
2022 levels) or more in any 1 year. Though this final rule would not
result in such an expenditure, and the analytical requirements of UMRA
do not apply as a result, the Agency discusses the effects of this rule
elsewhere in this preamble.
F. Paperwork Reduction Act
This final rule contains no new information collection requirements
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
G. E.O. 13132 (Federalism)
A rule has implications for federalism under section 1(a) of E.O.
13132 if it has ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.''
FMCSA has determined that this rule will not have substantial
direct costs on or for States, nor would it limit the policymaking
discretion of States. Nothing in this document preempts any State law
or regulation. Therefore, this rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Impact
Statement.
H. Privacy
The Consolidated Appropriations Act, 2005,\38\ requires the Agency
to assess the privacy impact of a regulation that will affect the
privacy of individuals. This rule would not require the collection of
personally identifiable information (PII).
---------------------------------------------------------------------------
\38\ Public Law 108-447, 118 Stat. 2809, 3268, note following 5
U.S.C. 552a (Dec. 4, 2014).
---------------------------------------------------------------------------
The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies
and any non-Federal agency that receives records contained in a system
of records from a Federal agency for use in a matching program.
The E-Government Act of 2002,\39\ requires Federal agencies to
conduct a PIA for new or substantially changed technology that
collects, maintains, or disseminates information in an identifiable
form. No new or substantially changed technology will collect,
maintain, or disseminate information as a result of this rule.
Accordingly, FMCSA has not conducted a PIA.
---------------------------------------------------------------------------
\39\ Public Law 107-347, sec. 208, 116 Stat. 2899, 2921 (Dec.
17, 2002).
---------------------------------------------------------------------------
In addition, the Agency submitted a Privacy Threshold Assessment
(PTA) to evaluate the risks and effects the proposed rulemaking might
have on collecting, storing, and sharing personally identifiable
information. The PTA was adjudicated by DOT's Chief Privacy Officer on
December 15, 2023.
I. E.O. 13175 (Indian Tribal Governments)
This rule does not have Tribal implications under E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, because
it does not have a substantial direct effect on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian Tribes.
J. National Environmental Policy Act of 1969
FMCSA analyzed this rule pursuant to the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and determined this
action is categorically excluded from further analysis and
documentation in an environmental assessment or environmental impact
statement under FMCSA Order 5610.1 (69 FR 9680), Appendix 2, (6)(b).
The categorical exclusion (CE) in paragraph (6)(b) covers regulations
which are editorial or procedural, such as those updating addresses or
establishing application procedures, and procedures for acting on
petitions for waivers, exemptions and reconsiderations, including
technical or other minor amendments to existing FMCSA regulations. The
requirements in this rule are covered by this CE, there are no
extraordinary circumstances present, and the action does not have the
potential to significantly affect the quality of the environment.
List of Subjects in 49 CFR Part 372
Agricultural commodities, Buses, Cooperatives, Freight forwarders,
Motor carriers, Moving of household goods, Seafood.
Accordingly, FMCSA amends 49 CFR chapter III, part 372 as follows:
PART 372--EXEMPTIONS, COMMERCIAL ZONES, AND TERMINAL AREAS
0
1. The authority citation for part 372 continues to read as follows:
Authority: 49 U.S.C. 13504 and 13506; Pub. L. 105-178, sec.
4031, 112 Stat. 418; and 49 CFR 1.87.
0
2. Amend Sec. 372.107 by adding paragraph (i) to read as follows:
Sec. 372.107 Definitions.
* * * * *
(i) Recreational activities. The term ``recreational activities''
means activities consisting of an outdoor experience or excursion
typically of a physical or athletic nature which require transportation
for the sole purpose of moving customers to another location or
locations where the outdoor experience or excursion will take place and
collecting those customers to transport them back to the place of
initial boarding or another outpost of the motor carrier. Recreational
activities include but are not limited to hiking, biking, horseback
riding, canoeing, whitewater rafting, water trails, tubing, skiing,
snowshoeing, snowmobiling, hunting, fishing, mountain climbing,
swimming, and off-highway vehicle driving and riding. The term does not
include any activity:
(1) for which the activity offered or sold is occurring
simultaneously with the transportation; or
(2) for which the transportation is the primary service offered for
sale.
0
3. Add Sec. 372.113 to read as follows:
Sec. 372.113 Providers of recreational activities.
Transportation by a motor vehicle designed or used to transport not
fewer than 9, and not more than 15, passengers (including the driver),
whether operated alone or with a trailer attached for the transport of
recreational equipment, is exempted from regulation promulgated
pursuant to Part B of Title 49 U.S.C. subtitle IV if:
(a) the motor vehicle is operated by a person that provides
recreational activities;
[[Page 13998]]
(b) the transportation is provided within a 150 air-mile radius of
the location at which passengers initially boarded the motor vehicle at
the outset of the trip; and
(c) in the case of a motor vehicle transporting passengers over a
route between a place in a State and a place in another State, the
person operating the motor vehicle is lawfully providing transportation
of passengers over the entire route in accordance with applicable State
law.
Issued under authority delegated in 49 CFR 1.87.
Sue Lawless,
Acting Deputy Administrator.
[FR Doc. 2024-03782 Filed 2-23-24; 8:45 am]
BILLING CODE 4910-EX-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.