FMCSA to End Approvals of Operating Authority Transfers; Move to Notification System
The Federal Motor Carrier Safety Administration will no longer review applications for transfer of operating authority by motor carriers, instead moving to a notification system, said the agency in a Federal Register notice set for publication Aug. 23. Instead of applying for approval of transfers of operating authority, parties to a transfer will simply have to provide information on their business operations. The new policy is effective Oct. 22.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
FMCSA lost legal authority to review transfers of operating authority in 1995, but hasn’t updated its regulations or its practices since. Part of that is because operating authority came to be recognized in industry as a property right that could be bought and sold, FMCSA said. Historically, operating authority was defined by commodity and territorial restrictions. So when the agency tried to change its regulations to reflect the change in law, industry objected because “transfers were an institutionalized part of the regulatory environment.”
But since the Federal Highway Administration first proposed discontinuing the approval process in 1998, motor carrier operating authority has since lost relevance “as an asset of commercial value,” FMCSA said. This is because the industry has moved to “comprehensive service options (e.g., without common and contract carrier service distinctions), unrestricted routes, and nationwide territorial scope,” the agency said.
So effective Oct. 22, FHMCSA will no longer process applications for transfer or operating authority, issue transfer approvals, or require the $300 fee required for these applications. Instead, it will begin a new recordation system, where parties involved in a transfer will have to provide information about their business operations, ownership, and control, such as their name, business form, address, and names of owners and officers. “No application form is required, and no transfer fee applies,” FMCSA said. After the information is entered in FMCSA’s system, the agency will notify the parties of recordation.