7/26/2019 5_31_83 Bus NPRM
1/9
Federal Register Vol.
48,
No. 105 Tuesday, May 31, 1983 Proposed Rules
specific
data on
the
numbers
of
shipments by
other shipper
(such as
distributers
and by other
carriers
it is
believed
that the annual
savings on
these shipments would
also
be
substantial. MTB
solicits comments from
interested
parties on.the cost
savings
and burden reduction
associated with
this
proposal,
including specific
data to
quantify
these savings.
Under
existing
regulations,
small arms
ammunition
is not required
to
be in
specification
packaging and
is
not
required
to be labeled.
This proposal
would permit
a different marking on the
packages
and
would
eliminate the need
for
shipping
papers
for surface
transportation.
List
of Subjects
49 CFR Part172
Hazardous
materials transportation,
Labeling,
Packaging,
Containers.
49 CFR
Part
173
Hazardous
materials
transportation,
Packaging, Containers.
In
consideration of the foregoing,
Parts 172 and
173 of
Title 49
of
the
Code
of
Federal
Regulations
would be
amended
as follows:
PART
172-HAZARDOUS MATERIALS
TABLES
AND
HAZARDOUS
MATERIALS
COMMUNICATIONS
REGULATIONS
1.
In
172.101, the Hazardous
Materials
Table
would be amended
by
adding
the following entry:
172.101
Hazardous Materials
Table.
1) 2)
3)
3A)
4)
5)
6)
7)
Packaging Maximum
net quantity
in Water
shipments
one
package
Hazardoua
materialsonpakg
+EAW
descriptions
andtproper Hazard
class
Identification Label s)
required
spignmsnumber
it not
excepted)
Escep-
Specific
Passeniger
Cargo
Pas Other
sipin peato-
require-
carrying Cargo
only yes-
senger require-
ments
aircraft
or
aircraft sel vessel
mants
railcar
a)
b)
a) b)
a)
b)
c)
Small arms
ammunition .........
ORM-O
None
None
173.1201
65
pounds 65 pounds 1,3
1,3
gross. gross.
2.
Section
173.101
would
be
amended
by adding
paragraph g)
to
read as
follows:
173.101 Small-arms
ammunition.
(g) Special
exceptions
for
shipment
of
certain types
of
small
arms
ammunition
in
the
ORM-D class
are provided
in
Subpart N of
this part.
3.
Subpart N of
Part
173
would
be
amended
by adding
a new
173.1201 as
follows:
173.1201 Small
arms ammunition.
Small
arms
ammunition
offered for
transportation under provision
of
this
section
may only be ammunition
for
rifle, pistol, or
shotgun
containing
either
inert
projectiles-or
blank
ammunition.
Small arms ammunition
offered
for
transportation under provision
of
this
section
may not have any
tear
gas,
incendiary
or
detonating explosive
components,
and
may
not
be larger than
10 gauge
for
shot shells
and 45 caliber
for rifle and
pistol ammunition.
It must
be
packed
in pasteboard or other
inside
boxes,
in partitions designed
to fit
snugly
in
the
outside packaging, or
in
metal
clips. Partitions
and metal
clips
must be so designed
as
to protect
the
primers
from accidental
initiation. Inside
boxes,
partitions,
and metal
clips must
be
packed in securely
closed
strong
outside wooden or
fiberboard
boxes.
(49 U.S.C. 1803, 1804,
1808; 49 CFR
1.53,
App.
A to Part
1
and paragraph
(a)[3) of
App. A.
to
Part 106)
Note.-The
MTB
has
determined that
this
document'will not result
in a
major rule
under
the
terms
of
Executive
Order 12291 or
a
significant
regulation under
DOT's regulatory
policy and
procedures
(44
CFR
11034 and
does not
require an
environmental
impact
statement
under the
National
Environmental
Policy
Act 49
U.S.C. 4321 et
seq. . I
certify
that
this document
will not have a
significant
economic impact
on
a substantial
number
of
small
entities
because
the overall
economic
impact of
this document
will be
minimal.
A
regulatory
evaluation and
environmental
assessment are available
for
review
in the
docket.
Issued in
Washington, D.C.,
on
May
3
1983.
Alan
I.
Roberts,
AssociateDirectoror
afzardous
Materials
Regulation
MaterialsTransportation
ureau
[FR
Doc.
83-14329
Filed 5 27 3; 0:45 am)
BILLING
ODE 4910-60-U
Federal Highway
Administration
49
CFR Part
387
[BMCS
Docket
No. MC-107;
Notice
No.
82-14]
Minimum Levels
of
Financial
Responsibility
for Motor
Carriers of
Passengers
AGENCY: Federal
Highway
Administration
FHWA), DOT.
ACTION:
Notice of
proposed rulemaking.
SUMMARY:
This
document
proposes to
amend 49
CFR 387
by
adding
a new
subpart B to
establish
minimum
levels
of
financial
responsibility
for
for-hire
motor carriers
of
passengers
involved
in
interstate and
foreign transportation.
This
action is
in
accord
with
the
provisions
of Section
18 of
the Bus
Regulatory
Reform Act
of 1982.
This
document further
provides
for the
implementation
and
enforcement
of the
proposed
standards.
DATE:
Comments must
be
received
on or
before August
1,
1983.
ADDRESS:
All comments
should refer to
the docket and notice
number that
appears at
the
top
of
this document
and
should be submitted preferably
in
triplicate,
to
Room
3404,
Bureau
of
Motor Carrier
Safety (BMCS),
400
Seventh
Street,
SW.,
Washington,
D.C.
20590.
All
comments received
will
be
available
for
examination at
the
above
address between
7:45 a.m.
and 4:15
p.m.
e.t.,
Monday through Friday.
FOR FURTHER INFORMATION
CONTACT:
Mr.
Neill
L.
Thomas, Bureau of
Motor
Carrier
Safety,
(202)
426-9767; or
Mrs.
Kathleen S.
Markman,
Office of the
Chief
Counsel,
(202)
426-0346;
Federal
Highway
Administration,
400 Seventh
Street,
SW., Washington,
D.C. 20590.
Office hours are
from 7:45
a.m.
to
4:15
p.m. e.t., Monday
through Friday.
__
II II
24 47
Citation: 48 Fed. Reg. 24147 1983
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7/26/2019 5_31_83 Bus NPRM
2/9
Federal Register Vol. 48,
No.
105 / Tuesday, May
31,
1983 Proposed
Rules
INFORMATION The
has determined that this
does
not contain a
major
rule
Executive
Order 12291. It has
that
it
contains
significant
regulation under
the
policies of the
Department of
A draft
regulatory
evaluation and
a
Analysis are
for
review
in the public
A copy may be obtained
by
Mr. Neill
L. Thomas
at the
above under
the
FOR
FURTHER
INFORMATION
of
this document. The FHWA
requests
information upon
to
determine whether
of
Section 18
of
the Act
a
significant
economic
on a substantial
number
of small
On
September
20,
1982,
the
President
the
Bus
Regulatory
Reform
Act
of
Pub.
L. 97-261 (the Act). Section
18
the Act establishes
minimum
levels of
covering public
damage
for
the
of passengers
by for-hire
vehicles
in
interstate
or
foreign
The
Act
establishes minimum
levels
financial responsibility that must be
by
affected persons as
of
November
1983
unless
the
Secretary issues
that require
higher
or
lower
The Secretary
may promulgate
to require higher levels
the Secretary s
authority to
reduce
levels
is limited.
The
statute
the
Secretary from reducing
minimum levels
below specified
and provides that the
authority to
reduced levels
applies only
to
a
of
up
to 2
years
beginning
either
(1)
The effective
date of
the
rule
the rule
is made effective
19, 1983,
or
(2)
the 366th
the effective date
of
Section
18
provided
a rule is made
1 year after enactment
or
later.
The
purpose
of the financial
provision
of the Bus
Reform
Act
of 1982
is to
incentives to
motor
to
operate their buses ina safe
and to
assure that they maintain
levels
of
financial
sufficient to satisfy
claims
public
liability and property
The legislative
history
of
18 indicates
a Congressional
that
the establishment of
levels of
financial
to
enhance safety
will
that adequate
sources of
are
available to
compensate those who may be injured
while
traveling
by bus. It
is
also
believed, given
the
interstate
nature of
many motor carrier operations, a single
Federal
standard for
financial
responsibility coverage will be more
efficient
for carriers and
more
equitable
and certain for consumers.
Also
appearing in today s
Federal
Register are
the
delegations
of
authority
necessary for
the
issuance
of this
notice
of
proposed rulemaking
(NPRM). The
Bus Regulatory
Reform Act
of 1982 vests
the Secretary
with
the
authority
to
prescribe
minimum
financial
responsibility
levels. This authority
is
delegated to the FHWA,
and, in turn, the
FHWA is
delegating the authority
to the
Director, Bureau
of
Motor
Carriers
Safety (BMCS).
Minimum Levels
of
Financial
Responsibility
Required
The
current limits of liability
required
of
motor
carriers
of
passengers
subject
to regulation
by
the
Interstate
Commerce
Commission
(ICC)
are:
(1)
100,000/ 500,000/ 50,000
for
vehicles having a
seating
capacity of
more
than
12 passengers;
an d
(2) 100,000/ 300,000/ 50,000 for
vehicles having
a
seating capacity of
12
passengers
or less. These levels will
remain
in
effect until
final rules are
promulgated
by
the
FHWA or
changed
by the
ICC.
The minimum
levels of financial
responsibility
set forth
in
the Act
that
will
take
effect 1 year
after
the effective
date of the Act
unless the
Secretary
exercises
the
statutory authority
to
establish different
levels, are as
follows:
(1) 5 million for
vehicles
having
a
seating capacity of
16
or more
passengers; an d
(2)
1.5
million for
vehicles having a
seating
capacity of
15
passengers or
less.
The
Secretary s authority
to
change
the requirements
for the 2-year
phase-in
period
allows reductions as follows:
(1)
The
5
million statutory
requirement
to no less
than
2.5 million
for
vehicles having
a
seating
capacity of
16
or
more passengers; and
(2)The 1.5 million
statutory
requirement
to no
less
than
750,000
for
vehicles
having
a seating
capacity of 15
or less
passengers.
Generally, the Secretary
may
make
these reductions provided
the
Secretary
finds that such
reductions (1) will not
adversely affect public safety
and
(2)
will prevent
a serious disruption
in
transportation service.
Financial responsibility
may
be
established
under Section
18
of the Act
by any one
or
combination of
the
following methods
acceptable to
the
Secretary
(1)
Evidence
of insurance,
including
high
self-retention;
(2) Guarantee;
or
(3) Surety bond.
The Act requires that any bond filed
shall be
issued
by
a bonding
company
authorized to
do
business in the
United
States
Discussion
The
following
is a
discussion of
the
proposed
rules developed
by the FHWA.
For the
sake of clarity
the
rules
concerning the minimum levels of
financial
responsibility
for motor
carriers
of
passengers
will
be
designated
as
Subpart B
of 49
CFR 387. The FHWA
intends to
designate existing
sections
387.1 thru 387.17
concerning financial
responsibility
for motor
carriers
of
property,
as
Subpart
A.
Purpose Scope
and
Applicability
387.25-Subpart
B)
The minimum levels
of financial
responsibility,
covering public liability
and property damage,
as proposed
in
this document, would apply
to for-hire
motor
carriers of passengers involved in
interstate and foreign commerce.
Section 18 of
the
Act does
not
apply
to: 1. A motor
vehicle
transportinglonly
school
children
and teachers to
or
from
school;
2.
A motor vehicle
providing
taxicab
service
and
having
a
seating
capacity
of
less than
7passengers
and
not
operated
on a regular route
or between
specified
points; and
3. A motor vehicle
carrying 15 or less
individuals in a
single, daily round trip
to commute
to
and
from work.
It should be noted
that
the
language
of
the
Act
clearly indicates that
motor
vehicles for-hire,
carrying
16 or
more
individuals,
even in
a single,
daily round
trip to commute
to and from work are
subject
to
the
law.
As previously
discussed,
the
purpose
of
requiring
increased levels
of
financial
responsibility is
to enhance safety. It
is
believed that
the
public will be
better
served by
the
proposed limits,
especially
considering
that
motor
carriers
would
have
greater incentives to create and
maintain more effective
safety programs
to help keep their
premiums lower. This
belief
is
based
on
the
observation that
carriers
having
good
safety
records are
usually
evaluated
in
a favorable
light by
iniurance companies
since
generally
the
premiums
that insurance companies
charge are directly
related to their
insureds
loss experience.
Equally
important to safety in
considering minimum
levels of financial
7/26/2019 5_31_83 Bus NPRM
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ederal egister
/ Vol. 48,
No.
105 Tuesday, May 31, 1983 Proposed Rules
responsibility is the economic
conditions
under which
the motor
carrier industry
operates.
Such
consideration
is required
not only by
Section
18 which
directs the
Secretary of
Transportation
to
focus on
safety
without
creating
undue
economic
burdens
on
the motor carrier
and
insurance
industries,
but
also
by
Executive
Order
12291,
dated February
17, 1981.
Further,
the Regulatory
Flexibility
Act
of
1980
(Pub. L.
96-354,
September 19, 1980; 5 U.S.C.
60;
et-seq.)
requires more
flexible
regulatory
approaches
for small
business entities.
In accordance
with
these requirements,
a draft
regulatory
evaluation/regulatory
flexibility analysis has
been prepared.
Initial findings
contained
in
this
document
will be
discussed in
the
section
of this
preamble entitled
Financial
Responsibility,
Minimum
Levels (387.33).
efinitions 387 29
The
proposed definitions
for
this
subpart,
particularly
those
referencing
terminology
commonly
used in the
insurance
industry,
are based on
definitions
found in 49
CFR 387.5.
These
definitions
were developed
with
the
assistance
of the
insurance and
motor
carrier industries
during
an earlier
rulemaking
action concerning
liability
requirements
for motor
carriers of
property and are
discussed
in detail in a
notice of proposed
rulemaking
published
January
26, 1981,
46 FR 8186.
Other
definitions, such
as
those specifically
relating to
motor carriers
of property,
have been adjusted
to
reflect the
transportation
of
passengers.
One
term
introduced in
Section 18 of
the Act which has
not
previously
been
defined in the
FMCSR is
seating
capacity.
It is
believed that this term
is
generallly
self-explanatory
since
manufacturers
designate
the
seating
capacity
for most vehicles.
However, in
the case of a
custom
made
vehicle, or
any other vehicle
not
having
a
designated
seating
capacity, the
seating
capacity
will be
determined
in
accordance with
the
National Highway
Traffic
Safety Administration's
(NHTSA)
definition of
designated
seating
position
49,CFR 571.3). The
NHTSA
defines,
designated seating
position
as any plan
view location
capable
of accommodating
a person
at
least
as large
as a th percentile
adult
female,
if the
overall seat configuration
and
design and vehicle
design
is such
that
the position
is likely to
be used
as a
seating
position while
the
vehicle is in
motion,
except
for auxiliary seating
accomodations
such as
temporary or
folding jump seats.
Any
bench or split
bench seat
in a passenger
car, truck
or
multi-purpose
passenger
vehicle
with a
GVWR less than
10,000 pounds,
having
greater
than 50
inches
of
hip room
(measured in accordance
with
SA E
Standards
11100 a))
shall have
not
less
than three
designated
seating positions,
unless the seat design
or
vehicle design
is such
that
the center
position cannot
be used
for seating.
Financial
Responsibility
Required
387 31
This notice
proposes that
policies of
insurance,
surety bonds,
and
endorsements
required
under
this
section shall
remain
in
effect
continuously
until terminated.
Cancellation
may
be effected
by
the
insurer
or
the
insured
motor carrier
giving
35 days
notice in writing
to the
other.
An
analysis
of comments
received in
reponse to
BMCS
Docket
No.
MC-94,
concerning
minimum levels
of
financial
responsibility for
motor
carriers of
property, indicated
that:
(1)
35
days
constitutes
a reasonable
amount
of time
for
cancellation of policies
of
insurance,
surety
bonds, and
endorsements, (2)
it is
sufficient
time for
a
motor carrier to
obtain replacement
coverage,
unless
the
carrier's
performance record is
extremely
poor, (3) it is
also sufficient
time for
an insurance company
to be
relieved
of further
liability since
normally
there
is enough
premium
deposit
to
cover
that
period, and (4) 35
days is ample time
to prepare
cancellation
papers. It is
also
important
to
note that
the 35 days notice
of
cancellation
would
commence
on the
day that
such
notice
is
mailed with
proof or mailing
sufficient
proof of
notice.
Further, the
proposed rule
allows
the
motor carrier the right to
obtain
adequate
coverage
for a
finite period
e.g., coverage
by
binder) of time
to
cover
any lapse in continuous
compliance
without triggering
the
35-day
cancellation
requirement. This will
afford
assurance
that the
public will
be
prote ted
The
proposed
regulations would
require that
an
endorsement(s)
be
attached
to
insurance policies
for the
purpose of
assuring the
insured that all
the
criteria
of Section
18
of
the
Act
have
been met in the
policy.
Further, surety
bonds, on
a prescribed form,
using
prescribed
language,
would
be permitted
in
lieu of the policy
of
insurance and
required
endorsement.
The
required endorsements
Se e
Illustrations
I and II)
would
alleviate the
often
times
confusing translation
and
interpretation
of
an insurance policy
or
surety
bond.
It is believed that this
requirement
would not create
an undue
24149
4 49
7/26/2019 5_31_83 Bus NPRM
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Federal Register Vol. 48, No. 105 Tuesday,
May 31 1983 Proposed. Rules
on the
insurance
it
consists of a single
page
using simple language. Further,
the
reflects the
Department s
belief
the
benefits of
having
endorsement
to policy far
outweigh
any
it,
since it would
of
full
coverage to
motor
carrier and
the
public at
a
endorsement
is
to motor carriers of
in accordance
with 49 CFR
and
to motor
carriers
o
by
the
Commerce
Commission.
The proof of
financial
responsibility,
it be an
endorsement
attached
a
policy of
insurance
or a
surety
would be kept at a motor carrier s
business. This proof
be
available to the public
upon
reqt est
for review. Such
is
in
keeping with the intent
Congress
to
provide
protection
to
the
It
would also provide
the
by
a
lessor of
a
motor
that the
minimum
levels of
responsibility have
been
me t
a
motor carrier.
Responsibility
Minimum
387 33
As previously discussed, a draft
evaluation/regulatory
analysis
has been prepared.
preliminary findings of
the
in
light of
Order
12291
indicate that the
safety
will not be
adversely
by reducing
the
mandated
of financial
responsibility
to the
levels permitted
for the
full two-
period provided for in the Act.
The
draft
regulatory
evaluation
that the
accident rate for the
bus
industry
is less
than
on e
of
that
for
the interstate trucking
A comparative analysis
trucks and buses shows
by number
fatalities
and
injuries,
and property
for
buses
are low.
Passenger
is
superior
in
buses compared
to
driver/co-driver safety; from
1.4 to
times
as safe fatality
wise and, while
number of injuries in bus and truck
is
considerably
closer,
this
attributed to
the
passenger-
factor
on buses. This
with
accident
cost
which
shows that the
lowest
levels
adequate to
cover liability
claims n
majority
of cases, indicates that the
phase-in
period may be
While
the data
used
to
prepare the
regulatory
evaluation has
been
to BMCS accident
statistics, it is
believed that this- information is
very
reliable and
accurate.
It is understood
however that more detailed information,
which
will hopefully, be
obtained from
the
regulated industry in response to
this
notice,
may indicate that the lowest
levels may not be
adviseable.
The information which is solicited
from
the
regulated industry
is needed to
assist
the FHWA inits assessment of
what
limits will
best protect
the public's
safety without seriously disrupting
transportation service.
The
regulatory
evaluation
also
indicates
that
the. cost
of
the
highest
levels, may not
represent
significantly
higher
costs.for the insured
when
compared to the expense of
current limits. If the comments reflect
such marginal
increases in premiums,
the FHWA may permit limifts higher
than
the
absolute
minimum to 'take
effect
for
protection of
the
public.
without
placing
significant burdens
on
the bus
industry.
Should the
comments
t
this
notice
warrant it, consideration
will
also be
given
to
the
option ofi layering
the.
required levels depending on such
variables as
fleet
size
or
annual
mileage.
The option
of permitting
a graduated
phase-in over
the
two-year period is
also
considered feasible
Such-
considerations
would' be in keeping with
the intent of
the Regulatory
Flexibility
Act
of
1980
Pub.
L..96-354, which
addresses-
regulatory
burden
on
small
businesses.
In order
to
assist
the FHWA
in its
final evaluation, it
is
requested
that
small bus
companies (Class II
and
III)
and small commuter companies,
including vanpool
operations
where
vans carry 16 or more
individuals,.
submit their financial statements-
or
aggregation and use in the final
evaluation.
The financial data should
cover the years
1977-1981 and
provide
particular attention to insurance.
premium information, number of
vehicles operated in each year, as well
as type
of services offered.
Interstate
bus companies are also
requested to
submit
their
accounting of total costs
(itemized,
if
possible) of serious
accidents
involving
fatalities,,
personal.
injuries,
and property damage.
State Authorityand
Designation
of
Agent
387 35 ]
Section 18 of the Act
states
that
financial
reponsibility may
be
established
under this section by any
one or combination of the following
methods acceptable to the Secretary:
evidence of insurance, including
high
self-retention, guarantee,
or surety bond.
Any bond filed shall be issued
by a
bonding company
authorized
to do
business in
the
United States.
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Proposed Rules
Based
on
comments
received
in
response
to Docket MC-94
on
this same
matter,
it is
proposed that
both policies
of
insurance
and surety bonds will
satisfy
the financial
responsibility
requirements
of this part
if
the
insurer or
surety furnishing
the
policy
or bond
is
(a)
Legally authorized
to
issue
such
policies
or bonds in each
State
in
which
the
motor
carrier operates;
or
(b) Legally
authorized to
issue such
policies
or bonds in the
State
in
which
the
motor carrier
has its principal
place
of business
or domicile,
and
designates
a person
upon whom
process,
issued by
or
under
the
authority of
any
court
having
jurisdiction
of the subject matter,
may be
served in
any proceeding at
law
or
equity brought in
any
State
in
which
the motor carrier
operates; or
(c) Legally
authorized
to
issue
such
policies
or bonds
in any
State of the
United States
and eligible
as an excess
or surplus lines insurer in
any
State
in
which
business is written,
and
designates a person
upon
whom
process, issued
by or
under
the authority
of
any court having
jurisdiction
of the
subject matter,
may be served in
any
proceeding
at
law
or
equity brought in
any State
in which the
motor
carrier
operates.
It
should be noted
that even though
the Act
provides
for
guarantees
as
an
acceptable
method of meeting the
financial
requirements, this
method
has
not been
provided
for
in
this
proposed
rule.
This
is
due to the
fact that our
research
shows no
evidence that
motor
carriers
regulated by the
ICC consider
this
method
a
viable
tool for
meeting
financial
responsibility
requirements.
Further, neither
the
ICC nor
the
respondents
to Docket MC-94
were able
to
enlighten
the Department
as
to how a
guarantee
can
be practically
applied
to
the financial
responsibility
requirements
for
motor
carriers. Comments,
data
or
detailed
information concerning this
matter are welcome.
Violation
and
Penalty
387 41
To
additionally
strengthen
the
incentives for
motor
carriers
to
concentrate
more
rigorously
on safety,
Congress
included a
civil
penalty
of up
to
10,000
per violation
to
be
assessed
against
any
motor carrier proven
to be
in
violation of the
final
regulations
implementing
Section 18.
ist
of Subjects in 49
CFR
Part
387
Highways
and
roads,
Motor
carriers,
Motor
vehicles Financial
responsibility,
Insurance, Penalties.
(Catalog of
Federal Domestic
Assistance
Program Number 20.217
Motor
Carrier
Safety)
Issued
on: May 20, 1983.
Kenneth
L. ierson,
Director
ureauof
Motor
Carrier
afety
Federal
Highway Administration.
In
consideration of
the foregoing
and
under the
authority
of
18
of the Bus
Regulatory
Reform
Act
of
1982,
Pub. L.
97-261;
23
U.S.C. 315;
and 49
CFR 1.48
and
301.60,
the
Federal
Highway
Administration
proposes
to amend
Title
49,
Code
of Federal Regulations,
Subtitle
B,
Chapter
III,
by
revising
Part 387
as
set
forth
below.
PART
387 MINIMUM
LEVELS OF
FINANCIAL RESPONSIBILITY
FOR
MOTOR
CARRIERS
1. Sections
387.1
through
387.17
are
designated
as
Subpart A with the
title
Motor
Carriers of
Property.
2. Subpart
B is added
to Part 387
to
read
as follows:
Subpart B Motor
Carriers of
Passengers
Sec.
387.25
Purpose
and scope.
387.27 Applicability.
387.29 Definitions.
387.31
Financial
responsibility required.
387.33
Financial
responsibility,
minimum
levels.
387.35
State of Authority
and designation
of
agents.
387.37
Fiduciaries.
387.39
Forms.
387.41
Violation
and penalty.
Authority:
Sec. 18,
Pub. L. 97-261,
96 Stat.
1102
(23 U.S.C.
315);
49
CFR
1.48 and 301.60.
Subpart
B Motor Carriers
of
Passengers
387.25
Purpose and scope.
This
subpart
prescribes
the
minimum
levels of
financial
responsibility
required to
be
maintained by
for-hire
motor
carriers
of
passengers
operating
motor vehicles
in interstate
or
foreign
commerce.
The
purpose
of
these
regulations is to
create additional
incentives
to
carriers to operate
their
buses in a safe
manner
and
to assure
that
they maintain
adequate levels
of
financial
responsibility.
387.27 Applicability.
(a)
This subpart applies
to
for'hire
motor carriers
operating
motor vehicles
transporting
passengers in
interstate or
foreign
commerce.
(b)
Exception.
The rules
in
this
subpart
do
not apply to-
1)
A
motor vehicle transporting
only
school
children
and
teachersto
or from
school;
(2) A motor
vehicle providing
taxicab
service
and having a seating
capacity of
less
than
7
passengers
and not
operated
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/ Proposed Rules
a regular route or between specified
and
3)A
motor vehicle carrying less than
individuals
in a single, daily round
to commute to and
from
work.
Definitions.
As used
in this subpart-
Accident includes
continuotis
or
eiposure
of the same
which results
in
public
which
the
insured neither
nor intended.
Bodily
injury means injury to the
sickness, or disease
to
any person,
death resulting
from
any
of
Endorsement an
amendmet
to an
policy.
Financial
esponsibility the
reserves (e.g., insurance
or surety
bonds) sufficient to
liability amounts
set forth in this
covering public liability.
For hirecarriage-transportation of
by
motor vehicle except
(a) The passengers
are transported by
person engaged in
a
business other
transportation; and
b)
The transportation
is
within
the
of,
and furthers a primary
than transportation) of
person.
Insured and principal themotor
in the policy of
insurance,
or
notice of
the
fiduciary of
carrier.
Insurance
premium the
monetary
an insured pays an insurer
for
of
liability
for
public
liability
against the insured.
Motor
Carrier means
for-hire
of passengers by motor vehicle.
Property damage means
damage to
of
use
of
tangible property.
PublicLiability means liability
for
or
property
damage.
387.31 Financial
responsibility
required.
(a) No motor carrier shall operate
a
vehicle transporting passengers
carrier
has obtained
and
in
effect the minimum
levels of
as
set forth in
387.33
of
this subpart.
b)
Policies
of
insurance, surety bonds,
this
remain in effect
until terminated.
1)
Policies
of
insurance and
bonds may be obtained for a
period
of time
to cover
any lapse
continuous compliance. (2)
may be effected by the
or the insured
motor
carrier
35
days
notice
in writing to the
The 35
days
notice
shall
commence
to
run.
from the
date the
notice
is mailed. Proof of mailing
shall
be sufficient
proof
of notice.
*
c)Policies
of insurance
and surety
bonds required under this section may
be,
eplaced
by
other policies of
insurance
or surety bonds. The; liability
of the retiring insurer or surety, as-to
events
after the
termination date, shall
be
considered
as.
aving
terminated
on
the
effective date: of thereplacement
policy
of insurance
or urety bond or at
the
end' of the 35 day
cancellation period
required in paragraph b) of this, section,
whichever
is
sooner.
d)Proof
of the
required
financial
responsibility shall
be
maintained
at the
motor carrier's principal place
of
business. The proof shall consist of-
1)
Endorsement(s)
for
Motor
Carriers
of Passengers Policies
of
Insurance
for
Public
Liability
Under
Section 18
of the
Bus
Regulatory Reform
Act of
1982
(form MCS-90B).issued by
an
insurer(s); or
2) A Motor
Carrier
of
Passengers
Surety Bond
for
Public
Liability
Under
Section 18 of the Bus:Regulatory
Reform
Act of 1982 (form MCS-82B)
issued
by
a urety.
(e)
The proof
of minimum
levels of
financial responsibility required by
this
section shall be considered public
information
and
be
produced for
review
upon
reasonable
request by
a
member
of
the public.
387.33 Financialresponsiblllty, minimum
levels.
The minimum levels of financial
responsibility
referred to in
387.31 of
this
subpart
are
hereby prescribed
as
follows:
SCHEDULE
OF LIMITS, PUBLIC LI BIUTY FOR
HIRE MOTOR
CARRIERS
OF PASSENGERS
OP-
ERATING IN INTERSTATE OR
FOREIGN
COM-
MERCE.
Effective dates
Vehicle seating capacity [Nov
19 [Nov.
19,
19831
985
1)
[Any vehicle]
with a
seating
capacity of 16 passengers or
more...............
............................$2,500,ooo
to
[ 5,000,0001 S5 000=00
12) Any
vehicle]
with seating
capacity
of S.
assenger
or
tess
..-.... 0...01............
s 1
to
[ 1,500.0001
i
1 5
387.35 State authority
and
designation
ofagent
A policy of insurance or surety bond
does not satisfy the financial
responsibility
requirements of this
subpart unless the insurer or surety
furnishing the policy or bond is-
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Proposed ules
a) legally
authorized
to issue such
policies or bonds in each State in Which
the motor carrier operates; or
b) legally
authorized
to issue such
policies or bonds in the
State
in which
the
motor carrier has
its principal place
of
business
or domicile, and designates
a
person upon
whom
process, issued
by
or
under
the
authority
of any court
having
jurisdiction of.the subject matter,
may
be served
in
any
proceeding
at
law
or equity
brought in
any State
in which
the
motor
carrier
operates;
or
c)
legally authorized
to
issue such
policies or bonds in any State of
the
United States
and eligible-as an
excess
or surplus lines insurer in any State in
which business is written, and
designates a
person
upon whom
process, issued by or under
the
authority
of any
court having
jurisdicition of
the
subject
matter, may be
served in any
proceeding
at
law or equity brought in
any State
in
which the motor carrier
operates.
387.37 Fiduciaries.
The coverage of
fiduciaries shall
attach
at the
moment of succession of
such fiduciaries.
387.39 Forms.
Endorsements
for policies of
insurance Illustration
I
and surety
bonds Illustration
II) must
be
in the
form
prescribed by
the
FHWA and
approved
by the
OMB. Endorsements
to
policies of insurance and surety bonds
shall specify that coverage thereunder
will
remain
in
effect
continuously
until
terminated as required
in
387.31
of
this
subpart. The
endorsement and surety
bond
shall
be
issued
in the
exact
name
of the
motor
carrier.
387.41
Violation
and
penalty.
Any
person except an
employee who
acts without
knowledge) who
knowingly
violates
the
rules of
this
subpart shall
be
liable to
the
United
States for
civil
penalty of
no
more than
10,000
for each
violation, and if any such violation
is
a
continuing one, each
day
of violation
will constitute a separate offense. The
amount of any
such penalty shall be
assessed by the Director,
Bureau
of
Motor
Carrier
Safety,
by
written
notice.
In determining the
amount of such
penalty,
the
Director shall take into
account
the
nature, circumstances,
extent, the
gravity of
the
violation
committed and,
with
respect
to the
person
found to
have
committed
such
violation,
the degree
of culpability, any
history of prior offenses,
ability
to pay,
effect
on
ability
to continue to
do
business, and such
other
matters as
justice
may
require.
BILLING CODE 4910-22-M
4 53
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ILLUSTRATION
I
Expiration Dote
Form
Amro ed
OM No.
ENDORSEMENT
FOR
MOTOR CARRIER POLICIES
OF INSURANCE
FOR PUBLIC LIABILITY
UNDER
SECTION 18 OF
THE
BUS REGULATORY
REFORM ACT OF
1982
at
Policy No.
of
Insurance
Company.
this _ day of
Effective
Date
Countersigned by
Authorized
Company
Representative
policy to
which
this
endorsement
is
attached provides
primary or excessnsurance,
as indicated by
W , for the limits shown:
0 This
insurance
is
primary
and the company
shall not be iable
for amounts in
excess
of S
for each accident.
IJ This
insurance
is excess
and
the
company shall not
be
liable for
amounts
in
excessof S
for
each accident
in
excess
of
the
underlying
limit of S
for each
accident.
required
by the Bureau
or the
ICC,
the
company agrees
to furnish
the
Bureau or the
ICC a
duplicate
of said policy
and
oll
endorsements.
The
company
also agrees, upon
telephone
request
by en
authorized
representative
of
the Bureau
or the ICC. to
the
policy
is
in force as
of a
particular
date.
The
telephone
number
to cell is:
of this endorsement may
be
effected
by the company
or
the
insured by
giving (1) thirty-five
(35)
days
notice in
writing
the other party
(said 35 days notice to
commence from the
date
the
notice
is
mailed, proof
of
mailing shall
be sufficient proof
of
and (2)
if
the insured
is
subject
to
the
ICC s
jurisdiction,
by
providing
thirty
(30)
days
notice
to
the
ICC (said
30
days
notice
commence from the
date the
notice
is
received
by the
ICC at
its
office
in Washington,
D.C.).
DEFINITIONS AS USED IN THIS ENDORSEMENT
includes
continuous or repeated
exposure
to
condi-
which results
in Public Liability which
the insured neither
not intended.
INJURY means injury
to
the
body, sickness, or
disease
any person, including
death resulting
from any of these.
insurance
policy
to
which
this endorsement
Is attached pro-
automobile
liability insurance
and
is
amended
to
assure
insured, within the
limits stated herein.
as a
motor carrier
of
passengers
with
Section 8
of
the
Bus
Reform Act of 1982 and the
rules and regulations
the Federal
Highway Administration s
Bureau
of
Motor
Safety (Bureau)
and the Interstate Commerce
Com-
(ICC).
consideration
of
the premium
stated in the
policy to which
endorsement Is
attached,
the insurer
the
company)
agrees
pay,
within the
limits
of
liability
described
herein,
any final
recovered against
the
insured for public
liability
from
negligence
in
the
operation,
maintenance or
use
motor vehicles
subject
to
financial
responsibility require.
of Section
8 of the
Bus
Regulatory
Reform Act
of 1982
of whether or not
each motor vehicle
is
specifically
In
the policy. and
whether or not
such
negligence
on any
route or in
any
territory
authorized
to be eved
the
insured
or
elsewhere.
Such insurance
as is afforded,
for
liability, does
not
apply to
injury
to
or death of
the
employees
while engaged in the course
of
their
or property transported by
the
insured,
desig-
as cargo. It
is understood and
agreed that no condition,
stipulation,
or limitation contained
In the
policy,
MOTOR CARRIER
means
a
for-hire
carrier of
passengers by
motor
vehicle.
PROPERTY DAMAGE
means damage to
or
loss of use of tan-
gible property.
PUBLIC
LIABILITY means
liability
for bodily
injury
or property
damage.
this endorsement,
or
any other
endorsement thereon, or viola-
tion thereof, shall relieve
the company from
liability
or from
the payment of
any final judgment,
within
the limits
of
liabil-
ity
herein described,
irrespective
of the financial
condition.
Insolvency
or
bankruptcy
of the
insured. However,
all terms,
conditions,
and limitations in the
policy
to
which the
endorse-
ment is attached shall
remain in full foice and
effect asbinding
between the
insured
end
the company.
The insured agrees to
reimburse the company
for any payment
made by the company
on account
of any accident,
claim, or
suit involving a breach of
the terms of
the
policy, and
for any payment
that the company
would
not
have
been obligated
to make under
the
provisions
of the policy except
for the agreement
contained in this
endorse-
ment.
It is further understood and
agreed that, upon
failure of the
company to pay
any final
judgment
recovered
against the Insured
as
provided herein, the judgment
creditor
may
maintain
en action
In any
court of competent jurisdiction against
the company to
compel
such payment.
The
limits
of the
company s
liability for
the
amounts prescribed
in
this endorsement
apply separately
to each accident and
any
payment under the policy
because of any one accident shall not
operate
to
reduce the
liability
of
the company
for the payment
of
final
judgments
resulting
from any other accident.
Bus
Regulatory
Reform
Act of 1982 requires
limits of financial
responsibility according
to vehicle seating capacity.
It
is the
CARRIERS
obligation to obtain
the
required
limits of financial
responsibility.
MCS.9oe
411431
SCHEDULE
OF
LIMITS
Public Liability
For.hire motor
carriers
of
passengersperating
in interstate
or foreign commere
Effective tes
Vehicle
ti
ng
Capacity
Nov.
19,1983
Nov.
19.1985
Any
-.ethcle with a
seating
capacity
of
16 passengers or
more.
2,500,000 5,000,000
Any
ehicle with aseating capacity
of
15
passengers
or
less
750,000 1,500,000
19
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31 1983 Proposed
Rules 24155
ILLUSTRATION
II
Form Approved
OM No
MOTOR
CARRIER
PUBLIC
LIABILITY SURETY BOND
UNDER SECTION
18
OF
THE BUS
REGULATORY REFORM
ACT
OF 1982-
PARTIES Surety
Company and Principal
Motor
Carrier Principal,
I.CC.
Docket
No.,
Place
of
Business
Address
and Principal
Place
of
Business Address
PURPOS
This is in agreement between the Surety and the
Principal under which the
Surety,
its successors
and
assignees, agree to be
responsible
for the payment of any final
judgment
or
judgments against the Principal
for
public
liability
and property
damage
claims in the sums prescribed herein,
subject to
the governing provisions
and following conditions.
GOVERNING 1) ection
18 of the Bus Regulatory Reform Act of 1982
PROVISIONS (2) ules
and regulations of
the
Federal Highway Administration's Bureau of
Motor
Carrier Safety (Bureau)
(3) ules and regulations of the Interstate Commerce
Commission 1ICC
CONDITIONS The Principal is or intends
to
become
a motor
carrie
of passengers subject to the applicable
governing
provisions relating
to'
financial responsibility for the protection of the public.
This bond assures compliance
by
the Principal with the applicable
governing provisions, and shall inure to the benefit of
any
person or
persons who
shall
recover a final judgment
or
judgments against the Principal
for public liability or property damage
claims excluding injury to
or death
of
the
Principal's
employees
while
engaged in the course
of their employment,
and
loss
of
or
damage
to property
of
the
Principal, and th cargo transported
by
the Principal).
If
every
final
judgment
shell be
paid
for
such claims
resulting from the
negligent
operation,
maintenance,
or
use
of
motor
vehicles
in
transportation
subject
to the
applicable
governing provisions, then this obligation shall
be
void,
otherwise it
will
remain in full effect.
Within the
limits described
herein, the
Surety extends to such losses regardless of whether
such motor vehicles are specificaly
described herein and whether occurring on the route or in the territory
authorized to be served
by
the Principal or elsewhere.
The
liability of the Surety for-each motor vehicle
subject
to the applicable
governing
provisions for
each accident shell not exceed
S_
and shall
be
a ontinuing one notwithstanding any
recovery thereunder.
The surety
agrees, upon telephone request by an
authorized representative of the Bureau or ICC. to verify
that the surety
bond
is in force
as
of
a
particular
date. The telephone number
to call is:_.
This
bond is
effective from (12:01 a.m.,
standard time,
ast
he address of the Principal as stated herein) and
shall
continue in
force
until
terminated asdescribed
herein.
The Principal
or
the
Surety
mayast any time terminate this
bond by giving
41)
hrity
five
35)
days
notice
in
writing to the
other
party
Isaid
35 days
notice
to commence
from
the date
the notice
is
mailed.
proof
of
mailing
shall
be sufficient
proof
of notice), and (2)f
the
Principal is
subject to the ICC s
urisdiction,
by providing
thirty 30) ays
notice
to
th
ICC Isaid 30 days
notice
to commence
from the date notice is received by the ICC at ts
office in
Washington, D.C.).he Surety
shall not
be
liable
for
the payment of any judgment
or judgments
against the
rincipal for public
liability
dr
roperty damage claims
resulting
from
accidents
which occur
after
the termination
6f this bond as escribed herein,
but su h termination shell
not affect
the
liability
of the Surety from
the
payment
of any such
judgment
or judgments resulting
from
accidents
which
occur
during the time
the bond
is
in
effect.
ate
AFFIX CORPORATE
SEAL)
Surety
ity Stale
ACKNOWLEDGMENT OF
SURETY
ST TE OF
COUNTY
OF
On
this _ day
of
19
- before me personally came
who,
being by
me duly
sworn
did
depose
and say
that
he resides in
; hat
he
is
the
of
the
the
corporation
described in
and
which
executed the foregoing
instrument; that
he
knows the
seal of
said
corporation; that
the
seal
affixed to
said
instru-
ment issuch corporate
seal;
that t
as so affixed by
order
of
the board
of
directors of said
corporation;
that he
signed
his name thereto by
like
order, an d
he duly acknowledged to me
that he executed
the same
for
an
on
behalf of
said corporation.
OFFICIAL
SEAL)
Title
of
offical
admlnitering
oath
Surety
Company ie
o
Form MCS
111-83
I R
oc.
83 14251
Filed
5-27-83: 8:45
am]
BILLING
CODE
4910-22-C
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