Lease and Interchange of Vehicles by Mexico-Domiciled Motor Carriers

T.F. Scott Darling, III
Federal Motor Carrier Safety Administration
22 November 2016

[Federal Register Volume 81, Number 225 (Tuesday, November 22, 2016)]
[Rules and Regulations]
[Page 83714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28018]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 376


Lease and Interchange of Vehicles by Mexico-Domiciled Motor 
Carriers

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice on applicability.

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SUMMARY: Section 219(d) of the Motor Carrier Safety Improvement Act of 
1999 (MCSIA) restricted Mexico-domiciled motor carriers from leasing 
commercial motor vehicles (CMVs) to U.S. carriers to transport property 
into the United States until the international obligations under the 
North American Free Trade Agreement (NAFTA) chapter on cross-border 
trade in services were met. Given FMCSA's acceptance of applications 
for long-haul operating authority from Mexico-domiciled motor carriers 
following the conclusion of the U.S.-Mexico Cross Border Long-Haul 
Trucking Pilot Program, the obligations are fulfilled and the 
restriction is no longer applicable.

DATES: Effective November 22, 2016.

FOR FURTHER INFORMATION CONTACT: Bryan Price, Chief, North American 
Borders Division, FMCSA, 1200 New Jersey Avenue SE., Washington, DC 
20590-0001. Telephone (202) 366-2995; email bryan.price@dot.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Motor Carrier Safety Improvement Act of 1999 \1\ (MCSIA) 
created FMCSA and transferred authority for motor carrier safety from 
the Federal Highway Administration.
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    \1\ Public Law 106-159, 113 Stat. 1748, 1768, December 9, 1999.
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    Section 219(d) prohibited the leasing by a Mexico-domiciled motor 
carrier (lessor) of its equipment to a U.S. motor carrier (lessee) for 
operation beyond the commercial zones on the U.S.-Mexico border. This 
restriction specifically applied ``Before the implementation of the 
land transportation provisions of NAFTA . . .'' The second clause in 
section 219(d) further states that this prohibition exists ``during any 
period in which a suspension, condition, restriction or limitation 
imposed under section 13902(c) of title 49 . . . applies to a [long-
haul] motor carrier (as defined in section 13902(e)).'' Section 
13902(c) addresses ``Restrictions on motor carriers domiciled in or 
owned or controlled by nationals of a contiguous foreign country.''
    Section 13902(c)(3) provides that only ``The President'' or his 
delegate may ``remove or modify in whole or in part any action taken 
under paragraph (1)(A) if the President or such delegate determines 
that such removal or modification is consistent with the obligations of 
the United States under a trade agreement or with United States 
transportation policy.'' In November 2002, President Bush issued a 
presidential memorandum lifting the moratorium on granting long-haul 
operating authority to qualified Mexico-domiciled motor carriers of 
property and of passengers.\2\ The only limitation that remained 
following this presidential action was the restriction on point-to-
point transportation within the United States, which did not impact the 
NAFTA land transportation provisions.
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    \2\ 67 FR 71795 (November 27, 2002).
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    In March 2002, FMCSA issued Interim Final Rules that fulfilled a 
Congressional mandate to ensure the safe operation of Mexican vehicles 
in the United States. Several organizations filed suit in the U.S. 
Court of Appeals for the Ninth Circuit challenging those rules. The 
Court set aside the rules, and the United States sought Supreme Court 
review of the decision. In 2004, the Supreme Court reversed the Ninth 
Circuit and upheld the Agency's Interim Final Rules (Department of 
Transportation, et al. v. Public Citizen, et al., 541 U.S. 752 (2004)).
    Congress, however, subsequently passed Section 6901 of the U.S. 
Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq 
Accountability Appropriations Act of 2007,\3\ imposing further 
limitations on the Agency's ability to expend appropriated funds to 
issue operating authority to Mexico-domiciled motor carriers. The 
Agency was unable to process applications for long-haul operating 
authority from Mexico-domiciled motor carriers until a pilot program 
was completed pursuant to these new requirements.
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    \3\ Public Law 110-28, 121 Stat. 112, 183, (May 25, 2007).
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    From October 14, 2011, through October 10, 2014, FMCSA conducted a 
pilot program to determine the ability of Mexican motor carriers to 
operate safely in the United States. FMCSA delivered the requisite 
report to Congress in January, 2015. On January 15, 2015 (80 FR 2179), 
FMCSA announced that it would begin accepting and processing 
applications for long-haul operating authority from Mexico-domiciled 
property carriers under 49 U.S.C. 13902.
    Because Mexico-domiciled motor carriers may now apply for and 
receive long-haul operating authority, the land transportation 
provisions of NAFTA for property carriers have been implemented. 
Therefore, the previous leasing restrictions are not applicable, 
consistent with Section 219(d) of MCSIA.
    This notice is being issued to prevent inconsistent enforcement of 
a law that is no longer applicable. It also serves to inform all motor 
carriers and the general public that, in accordance with NAFTA and 
MCSIA, Mexican-domiciled motor carriers (lessors) are allowed to lease 
their equipment to U.S. motor carriers (lessees) regardless of the 
destination of the cargo, as long as the carriers meet the requirements 
of 49 CFR part 376. Included in part 376 are requirements that the 
``authorized carrier'' (in this case, the U.S. motor carrier) assume 
``complete responsibility for the operation of the equipment for the 
duration of the lease'' [49 CFR 376.12(c)]. These types of leasing 
arrangements are compliant with MCSIA and the Agency's regulations.

    Issued on: November 9, 2016.
T.F. Scott Darling, III,
Acting Administrator.
[FR Doc. 2016-28018 Filed 11-21-16; 8:45 am]
BILLING CODE 4910-EX-P