Regulation of Group and Party Carriers; Doc. No. P-00981458 Commissioners Present: John M. Quain, Chairperson; Robert K. Bloom, Vice Chairperson; David W. Rolka; Nora Mead Brownell; Aaron Wilson, Jr.
[29 Pa.B. 515] Public Meeting held
December 17, 1998Final Decision By the Commission:
On June 9, 1998, the Transportation Equity Act for the 21st Century, Pub. L. No. 105-178 (TEA Act), was signed into law. The TEA Act, inter alia, modified 49 U.S.C.A. § 14501 by preempting State regulation ''relating to the authority to provide intrastate or interstate charter bus transportation.'' Section 4016, TEA Act.1 The preemption is applicable to only charter bus transportation, not commuter bus operations. Further, the Conference Report accompanying the TEA Act, Report 105-550, explicitly notes ''that the [preemption] does not limit a state's ability to regulate taxicab service or limousine livery service.'' Conference Report, p. 496.2 Finally, the TEA Act specifically authorizes continuing state oversight of safety and financial responsibility for charter bus carriers.
Historically, this Commission has regulated entry into the charter bus market in order to ensure continued viability. Pursuant to the statutory mandate found at 66 Pa.C.S. § 1103(a), the Commission developed a three part test to determine whether to grant a carrier authority. That test required: 1) that an applicant demonstrate that the proposed service was responsive to a public demand or need; 2) that an applicant demonstrate that it has the technical and financial ability to provide the service safely and legally; and 3) that the entry of a new carrier into the market would not endanger operations of existing carriers in contravention of the public interest. See 52 Pa. Code § 41.14.
Due to the TEA Act's preemption, we issued a Tentative Decision on August 20, 1998, wherein we indicated that we will no longer use this three part test to regulate entry into the charter bus industry. In the Tentative Decision, we proposed applying the TEA Act's preemption to all group and party carriers; i.e., charter, tour/sightseeing, and special excursion. Further, we proposed applying the preemption to vehicles with seating capacities of 10 or more. Finally, we proposed a continuing registration requirement for group and party carriers in order to continue our regulation of the industry in the areas of safety and insurance.
The Tentative Decision was published for comment in the September 5, 1998 edition of the Pennsylvania Bulletin, 28 Pa.B. 4583. Comments were filed by the Pennsylvania Bus Association, William M. Barnes, Esquire, and by Tropiano Royal Transportation Service, Inc., et al.
The Pennsylvania Bus Association (PBA) generally supports the regulatory proposals contained in the Tentative Decision. The PBA comments include suggestions regarding the Commission's bus safety program. The PBA requests the Commission compile and periodically publish the results of its safety and audit programs. Further, the PBA requests the Commission notify it of new applications and certifications as well as suspensions.
In response to the PBA's comments, we will forward its suggestions regarding our safety program to the Bureau of Transportation and Safety for its consideration. We do note that the Tentative Decision did envision many of the safety-related suggestions offered by the PBA.
As for the PBA's requests for publication and notification, we decline to embark upon this course. We do not believe that placing these additional burdens on Commission personnel will enhance our regulation of the bus industry.
Mr. Barnes comments that our Tentative Decision does not extend preemption far enough. Mr. Barnes suggests that Commission regulation of all passenger carriers, with the exception of taxicabs, is preempted by the TEA Act.
We disagree with Mr. Barnes' comment. As noted in the Conference Report, the TEA Act's preemption was not intended to apply to taxicab or limousine service. The ultimate touchstone of preemption analysis is the congressional intent underlying a statute. Here, the congressional intent is clear. While Mr. Barnes cites to the language of the statute itself as controlling, his reliance is misplaced since, by its own terms, the TEA Act's preemption is limited to ''charter bus transportation.''
The final commentator, Tropiano Royal Transportation Service, Inc., et al. (Tropiano), generally agrees with the Commission's Tentative Decision, but takes issue with the extent of the preemption proposed. Specifically, Tropiano comments that the TEA Act's preemption should be limited to charter service, not tour/sightseeing or special excursion services. Also, Tropiano comments that the preemption should apply only to vehicles designed to carry more than 15 passengers, including the driver.
In our Tentative Decision, we recognized that the TEA Act's preemption was limited to ''charter service.'' However, we determined that extending the preemption to ''tour/sightseeing'' and ''special excursion'' services was desirable. The rationale for our voluntary extension of the preemption was two-fold. First, ''tour/sightseeing'' and ''special excursion'' services are ancillary to ''charter service'' and do not require independent evidence of necessity in the application process. Secondly, there are pragmatic enforcement problems involved in continued economic regulation of ''tour/sightseeing'' and ''special excursion'' services, given that these services are provided in vehicles that also provide ''charter service.''
Notwithstanding Tropiano's comments, we are not persuaded to limit the TEA Act's preemption to ''charter service.'' We believe that we are authorized to extend that preemption to ''tour/sightseeing'' and ''special excursion'' services in light of the ancillary nature of those services.3 Further, we believe that extending the preemption to ''tour/sightseeing'' and ''special excursion'' services is in the public's best interest, since we can now focus our energies on safety.
Tropiano also comments that the TEA Act's preemption should be limited to 15 passenger vehicles, (including the driver) rather than 10 passenger vehicles (excluding the driver), as proposed in our Tentative Decision. As noted in our Tentative Decision, the extent of the preemption created by the TEA Act is somewhat ambiguous due to its failure to define ''charter bus transportation.'' While the TEA Act fails to define ''bus,'' it is defined at 49 CFR 393.5 as a vehicle designed to carry more than 15 passengers, including the driver.4 Current Commission regulations provide that charter bus service must be provided in vehicles with seating capacities of ten passengers or more, excluding the driver. 52 Pa. Code § 29.323.
In light of the inconsistency between the Federal and State definition of ''bus,'' we chose to adopt the State definition in our Tentative Decision. While we recognized that the effect of our action would be to broaden the preemption created by the TEA Act, we opined that adopting the Federal definition would prove unmanageable. Adoption of the Federal definition of ''bus'' would bifurcate current group and party carriers into two groups, one which would be subject to economic regulation (vehicles with seating capacities of 10--15), and one which would not (vehicles with seating capacities greater than 15). This result was not palatable and, therefore, we chose to apply the TEA Act's preemption to our existing definition of bus, that is, vehicles with seating capacities of 10 or greater, excluding the driver.
Upon further review, we agree with Tropiano's comment that our proposal unnecessarily broadened the TEA Act's preemption by applying the Commission's definition of ''bus.'' The effect of our proposal would be to deregulate a portion of limousine service as well as group and party service, a result not intended.5 Further, it is consistent with our statutory charge to regulate public utilities that we do not enlarge the preemption created by the TEA Act beyond what is necessary. Therefore, we will limit the preemption to group and party service operated in vehicles with seating capacities of more than 15 passengers, including the driver.
We note that adopting the Federal definition of ''bus'' will not create unmanageable enforcement problems, since all passenger carriers operating in vehicles with seating capacities of 15 or less, including the driver, will be subject to continued economic regulation. Group and party carriers operating in these vehicles will need specific authority from the Commission as historically granted.
Finally, we note that in our Tentative Decision, we indicated that we would no longer require any rate filings for group and party carriers. In light of our decision to continue economic regulation over that portion of group and party carriers operating in vehicles with seating capacities of 15 or less, including the driver, we will also continue our tariff filing requirement for that segment of group and party carriers only.6
After careful review of the Public Utility Code, the TEA Act and the Conference Report, as well as the comments to our Tentative Decision, we will implement the following regulatory scheme for group and party carriers.
Implementation
Given the TEA Act's reservation to states of continuing oversight in the areas of safety and insurance, a continuing registration requirement is necessary. The registration requirement for group and party carriers operating vehicles designed to carry more than 15 passengers, including the driver, will be similar to that utilized for property carriers following deregulation. See Regulation of Motor Common Carriers of Property, Docket No. P-00940884, (Order entered December 20, 1994). It will be an expedited process designed to ensure compliance and familiarity with Commission safety and insurance requirements. The traditional requirement of demonstration of need for a proposed service is abolished. Further, given our inability to restrict entry, all carriers (charter, tour/sightseeing, special excursion), new and existing, will have authority to operate group and party service in vehicles with seating capacities of more than 15 passengers, including the driver between points in Pennsylvania.
Procedure for New Entrants Following entry of a final order in this matter, all applicants for authority to provide group and party service will follow the following procedure:
A. Group and party applicants whose operations will be limited to vehicles with seating capacities of more than 15, including the driver.
1. A new applicant will file an application on an appropriate form provided by the Commission.
2. The filing fee for new applicants will be reduced from $350 to $100.
3. Notice of the application will not be published in the Pennsylvania Bulletin.7
4. No protests to applications for group and party authority will be considered.8
5. If an applicant's safety fitness to provide service is at issue, the application will be referred to the Office of Administrative Law Judge for hearing and decision.
6. If an applicant's safety fitness to provide service is not at issue, a compliance letter will be issued immediately. The compliance letter will direct applicant to file proper evidence of insurance. Temporary evidence of insurance may be filed in the form of (a) a declaration page of the insurance policy or (b) a copy of a valid binder of insurance. Temporary evidence of insurance shall be replaced by permanent evidence of insurance within 60 days. A carrier may begin operations upon filing acceptable evidence of insurance.
7. Once acceptable evidence of insurance has been filed, a certificate of public convenience will be issued authorizing the transportation of persons, in group and party service, in vehicles with seating capacities of more than 15, including the driver, between points in Pennsylvania.
8. No tariff filings are required for new or existing carriers.
9. Applicants which do not possess a satisfactory safety rating issued by the United States Department of Transportation or a state with safety regulations comparable to the Commonwealth's, shall complete a safety fitness review conducted by Commission staff. See 52 Pa. Code § 3.381(c)(2)(iii).
B. Group and party applicants whose operations will be provided in vehicles with seating capacities of 15 passengers or less, including the driver.
1. A new applicant will file an application on an appropriate form provided by the Commission.
2. The filing fee for new applicants will be $350.
3. The application procedure, including publication and protest, will remain unchanged from existing procedure.
Existing Group and Party Carriers All currently certificated carriers providing group and party services will have the following right, beyond their existing rights9 :
To transport persons, in group and party service, in vehicles with seating capacities of more than 15, including the driver, between points in Pennsylvania.
Assessments Given our continued regulation of group and party carriers in the areas of safety and insurance, the industry will remain subject to our assessment process. The industry will be notified of any changes.
Insurance Commission insurance regulations governing passenger carriers are found at 52 Pa. Code § 32.11. Generally, we have required group and party carriers to maintain insurance coverage of $5 million to cover liability for bodily injury, death, or property damage. On occasion, we have permitted a carrier to carry less coverage if the carrier restricted the vehicles used to vehicles with seating capacities of less than 28 passengers. As a general rule, we will continue to require $5 million coverage for a group and party carrier. If a carrier voluntarily limits the size of the vehicles it operates, it may request a reduction in the mandated coverage limits.
Waiver of Regulations In light of our changed regulatory role over group and party carriers, we will waive all regulations with respect to group and party carriers to the extent they are inconsistent with the new process. Those regulations include, but are not limited to, 52 Pa. Code §§ 3.381, 23.1--23.149. Regulations found at 52 Pa. Code Chapter 29 remain intact, but for 52 Pa. Code § 29.324; Therefore,
It Is Ordered That:
1. The procedures described above shall become effective upon entry of this order.
2. A copy of this Final Order shall be served on all group and party carriers, commentators and forwarded to the Pennsylvania Bulletin for publication.
JAMES J. MCNULTY,
Secretary[Pa.B. Doc. No. 99-139. Filed for public inspection January 22, 1999, 9:00 a.m.] _______
1 Section 4016 of the TEA Act provides:
Section 4016. Authority over charter bus transportation. Section 14501(a) (49 U.S.C.) is amended to read as follows:
(a) Motor carriers of passengers.
(1) Limitation on State Law. No State or political subdivision thereof and no interstate agency or other political agency of 2 or more States shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to
(A) scheduling of interstate or intrastate transportation (including discontinuance or reduction in the level of service) provided by a motor carrier of passengers subject to jurisdiction under subchapter I of chapter 135 of this title on an interstate route;
(B) the implementation of any change in the rates for such transportation or for any charter transportation except to the extent that notice, not in excess of 30 days, of changes in schedules may be required; or
(C) the authority to provide intrastate or interstate charter bus transportation.
This paragraph shall not apply to intrastate commuter bus operations.
(2) Matters not covered. Paragraph (1) shall not restrict the safety regulatory authority of a State with respect to motor vehicles, the authority of a State to impose highway route controls or limitations based on the size or weight of the motor vehicle, or the authority of a State to regulate carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and self-insurance authorization.2 The Conference Report provides:
The conference adopts the Senate provision with modification. A clarifying provision is included to ensure that states may continue to regulate safety with respect to motor vehicles and to impose highway route controls or limitations based on the size or weight of the motor vehicle or with regard to minimum amounts of financial responsibility relating to insurance requirements. The conference also notes that the provision does not limit a state's ability to regulate taxicab service or limousine livery service.3 We emphasize that historically these ancillary services did not require independent proof of need.
4 Tropiano agrees that we properly rejected a broader definition of ''bus'' found at 49 CFR 390.5 (no seating limitation) as being inconsistent with the intent of the TEA Act.
5 Limousine service may be operated in vehicles with seating capacities of 10 passengers or less, excluding the driver. 52 Pa. Code § 29.333(a).
6 We note that this is an expedited process following our adoption of flexible ratemaking. See Investigation of Flexible Ratemaking for the Bus and Limousine Industries, Docket No. I-00960063 (Order entered October 16, 1997).
7 We are deleting the publication requirement established at 52 Pa. Code § 3.381(b) as well as the protest process provided for at 52 Pa. Code § 3.381(c). See Publication and Protests, Motor Carrier Property Applications, Docket No. L-00980133 (Order entered August 18, 1998). We believe that the publication/protest concerns for this segment of group and party carriers are analogous to the concerns for property carriers, given the similar limitation on Commission regulation of these two groups. Therefore, we will expedite the application process for group and party carriers by eliminating the publication/protest process at this juncture.
8 See Footnote 7.
9 Existing rights will, in effect, be applicable only to service provided in vehicles with seating capacities of 15 passengers or less, including the driver.
