[Senate Report 107-237]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 546
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-237
_______________________________________________________________________



                   REAL INTERSTATE DRIVER EQUITY ACT

                                OF 2001

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                               H.R. 2546




                 August 1, 2002.--Ordered to be printed
                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
99-010                    WASHINGTON : 2002

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                      one hundred seventh congress
                             second session

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
                     Kevin D. Kayes, Staff Director
                       Moses Boyd, Chief Counsel
                      Gregg Elias, General Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Ann Begeman, Republican Deputy Staff Director

                                                       Calendar No. 546
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-237

======================================================================



 
               REAL INTERSTATE DRIVER EQUITY ACT OF 2001

                                _______
                                

                 August 1, 2002.--Ordered to be printed

                                _______
                                

      Mr. Hollings, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                        [To accompany H.R. 2546]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (H.R. 2546) to amend title 49, 
United States Code, to prohibit States from requiring a license 
or fee on account of the fact that a motor vehicle is providing 
interstate pre-arranged ground transportation service, and for 
other purposes, having considered the same, reports favorably 
thereon with amendments and recommends that the bill as amended 
do pass.

                          Purpose of the Bill

  The purpose of this bill, as reported, is to prohibit a 
State, a political subdivision of a State, or an interstate 
agency of two or more States, other than the home licensing 
State, from enacting or enforcing any law, rule, or regulation 
requiring a license or fee on a motor vehicle that is providing 
prearranged interstate ground transportation service.

                          Background and Needs

      Limousines, airport shuttles, executive sedans, black 
cars, and some taxicabs provide pre-arranged ground 
transportation services. Often in many metropolitan regions, 
not all points along a trip's route, including the origin, 
intermediate stops, and destination, are located in the same 
State. Currently, if a taxicab or limousine provides pre-
arranged interstate service, a State or municipality in which 
the service operator is not licensed may require registration 
or licensing fees and may enforce these requirements through 
fines and vehicle impoundment. In short, these for-hire 
vehicles are subject not only to the laws and regulations of 
the State in which they are licensed or domiciled, but also to 
certain requirements that may be imposed by other States or 
municipalities in which fares originate or intermediate stops 
are made.
      The Taxicab, Limousine, and Paratransit Association 
(TLPA) estimates that there are 18,600 companies in the United 
States that provide local, for-hire passenger transportation 
services using taxicabs, black cars, airport shuttles, 
executive sedans, or limousines. Limousines and taxicabs make 
up the largest portion of the for-hire passenger vehicle 
industry. According to TLPA, the companies that provide for-
hire passenger transportation services operate a total of 
293,000 vehicles and transport over 2 billion passengers each 
year. Of these, 10,000 limousine companies operate some 83,000 
vehicles and transport over 400 million passengers per year, 
and 6,300 taxicab companies operate approximately 171,000 
taxicabs and transport 1.4 billion passengers per year.
      Limousine companies serve metropolitan areas nationwide 
with a heavy concentration of service in the northeast. 
According to TLPA, New York City alone has 5,700 limousines. 
Most limousine companies operate a small number of limousine 
vehicles, and the 50 largest limousine companies in the country 
have a combined fleet of only 6,500 vehicles. Typically, 
limousine services that are licensed by a State as a 
``limousine'' operate relatively new luxury model vehicles and 
charge the customer based on time. These vehicles include 
limousines, luxury vans, luxury buses, and executive sedans. 
TLPA refers to the limousine industry as a $4 billion-a-year 
business.
      Taxicabs, which are typically licensed by a municipality 
as a ``taxicab,'' charge the customer primarily based on 
distance traveled, and are generally brightly colored vehicles 
with the company name prominently displayed on the exterior. 
The average fleet size for these companies is just under 27 
taxicab vehicles per company. The annual gross revenue of the 
United States taxicab industry is estimated to be approximately 
$10 billion.
      The Constitution grants the Federal government the 
authority to regulate interstate commerce, including interstate 
passenger transportation by motor carrier. As such, an operator 
performing interstate passenger transportation by motor carrier 
must obtain interstate operating authority from the United 
States Department of Transportation. Licensing of businesses 
providing intrastate transportation by limousines or taxicabs 
is performed largely by individual States. Limousines are 
typically licensed and regulated by State agencies; taxicabs 
are usually licensed and regulated at the municipal level. This 
has led to situations where a taxicab or limousine service 
operating intrastate as part of an interstate movement is 
required to comply with licensing requirements of the various 
States in and through which it operates. For example, some 
cities require that the pick up of any passenger within city 
limits for pre-arranged ground transportation service to a 
point in another State occur only by a for-hire vehicle 
licensed in the city. Another such restriction may be a 
requirement for the driver to be licensed in the State in which 
the trip originates.
      H.R. 2546 would amend Federal transportation law to 
clarify that no State or political subdivision of a State, 
other than the home licensing State, may require a license or 
fee of a motor car-rier or driver providing pre-arranged ground 
transportation service beginning in one State and ending in 
another, or beginning and ending in the same State with 
intermediate stops in or routing through another State. This 
limited exercise of Federal preemption authority is intended to 
allow operators of ground transportation services to provide 
interstate service under certain conditions without having to 
comply with licensing requirements of each State on the 
interstate trip. These conditions are: (1) the trip must be 
pre-arranged; and (2) the driver must comply with permissible 
criminal background check or drug testing requirements of any 
jurisdiction where pickups are made along the interstate trip 
which would otherwise require such measures as a prerequisite 
to obtaining a license in that State or municipality.

                          Legislative History

      H.R. 2546, introduced by Rep. Roy Blunt (R-MO) on July 
18, 2001, with 21 co-sponsors, passed the House of 
Representatives by voice vote under suspension of the rules on 
November 13, 2001. It was referred to the Senate on November 
14, 2001, and, upon receipt in the Senate, was read twice and 
referred to the Committee on Commerce, Science, and 
Transportation.
      On April 18, 2002, the Committee on Commerce, Science, 
and Transportation ordered H.R. 2546 to be reported favorably 
with amendments. The amendments were offered by Senators Ernest 
F. Hollings and John McCain, and provided three changes: (1) to 
add a definition of ``intermediate stop''; (2) to clarify the 
definition of transportation by motor carrier to distinguish it 
from part of certain combined air/ground intermodal movements; 
and (3) to clarify that this legislation does not prevent a 
State from enforcing in a non-discriminatory manner drug and 
alcohol testing requirements on drivers of motor carriers 
operating in pre-arranged interstate commerce.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 1, 2002.
Hon. Ernest F. Hollings,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2546, the Real 
Interstate Driver Equity Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Rachel 
Milberg (for federal costs), and Susan Sieg Tompkins (for state 
and local costs).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director.)
    Enclosure.

               Congressional Budget Office Cost Estimate


H.R. 2546--Real Interstate Driver Equity Act of 2001

    H.R. 2546 would prohibit states from requiring limousine or 
shuttle operators to obtain a license or pay a fee to provide 
interstate service. CBO estimates that H.R. 2546 would not have 
a significant effect on the federal budget because the act 
would not expand the regulatory or enforcement authorities of 
federal agencies. The legislation would not affect direct 
spending or receipts; therefore, pay-as-you-go procedures would 
not apply.
    Prohibiting state and local governments from requiring 
certain licenses and fees would be an intergovernmental mandate 
as defined in the Unfunded Mandates Reform Act (UMRA). CBO 
estimates that the cost of this mandate, primarily lost 
revenues from fees and penalties, would be well below the 
threshold established in UMRA ($58 million in 2002, adjusted 
annually for inflation). This act contains no new private-
sector mandates as defined in UMRA.
    On November 9, 2001, CBO transmitted a cost estimate for 
H.R. 2546 as ordered reported by the House Committee on 
Transportation and Infrastructure on November 7, 2002. CBO 
estimates that neither version of the legislation would have a 
significant effect on the federal budget, and that both 
versions contain an intergovernmental mandate with costs below 
the UMRA threshold.
    The CBO staff contacts for this estimate are Rachel Milberg 
(for federal costs), and Susan Sieg Tompkins (for the state and 
local costs). This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:
    The legislation would have no further effect on the number 
or types of individuals and businesses regulated, the economic 
impact of such regulation, the personal privacy of affected 
individuals, or the paperwork required from such individuals 
and businesses.

                      Summary of Major Provisions

    The bill, as amended, would relieve certain motor carriers 
providing pre-arranged interstate transportation service from 
complying with licensing requirements imposed by States other 
than its home licensing State. The legislation also would 
clarify that it does not: (1) subject taxicab service to 
regulation under chapter 135 or section 31138; (2) prohibit or 
restrict an airport, train, or bus terminal operator from 
contracting to provide preferential access or facilities to one 
or more providers of pre-arranged ground transportation; or (3) 
restrict the right of a State to require pre-licensing drug 
testing or background investigations of individuals operating 
vehicles providing prearranged ground transportation service 
originating in that State.
    The Committee envisions that, in order to minimize 
administrative burdens, drivers will have in their possession 
official copies of their criminal background check before 
providing pre-arranged interstate transportation in a 
jurisdiction which requires such criminal background checks as 
a prerequisite to obtaining a license. This would allow local 
law enforcement authorities to be provided with immediate 
documentation upon request. The Committee also envisions the 
same approach would be followed with respect to jurisdictions 
which require drug testing of drivers. The driver would be 
expected to have in his or her possession documentation of 
passage of a drug test prior to providing pre-arranged 
interstate service within that jurisdiction.

                      Section-by-section Analysis


Section 1. Short title.

    This Act may be cited as the ``Real Interstate Driver 
Equity Act of 2001.''

Section 2. Regulation of interstate pre-arranged ground transportation 
        service.

    This section would clarify that a State or local government 
or an interstate agency may not regulate pre-arranged 
interstate ground transportation provided by a motor carrier of 
passengers that meets all applicable Federal registration 
requirements for the interstate transportation of passengers 
and all applicable vehicle and intrastate passenger 
transportation licensing requirements of the carrier's home 
State under State law.
    The bill would not prohibit airport, train, or bus terminal 
operators from providing preferential access or facilities to 
one or more transportation providers. In addition, a State or 
local government would not be restricted from requiring, in a 
non-discriminatory manner, a drug test or criminal background 
investigation as a condition of picking up passengers in their 
jurisdiction for an interstate trip.
    Interstate ground transportation includes any trip in which 
one or more passengers are picked up in one State and 
transported to an intermediate or final stop in another State. 
The bill prohibits a jurisdiction in a State different than the 
State in which the carrier is licensed from requiring other 
licenses or permits for pre-arranged interstate ground 
transportation.
    A stop is an intermediate stop only if the driver does not 
perform any service for any other person while waiting to 
resume transport of the first passenger or passengers. In 
addition, an airport shuttle is providing interstate ground 
transportation when it transports unrelated passengers at 
multiple locations while traveling to or from an airport so 
long as at least one stop is in a State other than the one in 
which the airport is located.

Section 3. Definitions.

    Pre-arranged ground transportation service is defined as 
transportation of passengers, arranged in advance, and provided 
in a motor vehicle with a seating capacity not exceeding 15 
passengers, including the driver. This section would clarify 
the extent of the taxicab service exemption from regulation by 
the United States Department of Transportation. Taxicab service 
is defined by reference to local law and functional 
characteristics. The bill would amend existing law to increase 
the vehicle size from six passengers to eight passengers 
(including the driver), to conform to the commercial motor 
vehicle safety provisions of the Transportation Equity Act for 
the 21st Century (P.L. 105-178).

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
material is printed in italic, existing law in which no change 
is proposed is shown in roman):

                        TITLE 49. TRANSPORTATION

                 SUBTITLE IV. INTERSTATE TRANSPORTATION

PART B. MOTOR CARRIERS, WATER CARRIERS, BROKERS, AND FREIGHT FORWARDERS

                    CHAPTER 131. GENERAL PROVISIONS

Sec. 13102. Definitions In this part, the following definitions shall 
                    apply:

          (1) Board.--The term ``Board'' means the Surface 
        Transportation Board.
          (2) Broker.--The term ``broker'' means a person, 
        other than a motor carrier or an employee or agent of a 
        motor carrier, that as a principal or agent sells, 
        offers for sale, negotiates for, or holds itself out by 
        solicitation, advertisement, or otherwise as selling, 
        providing, or arranging for, transportation by motor 
        carrier for compensation.
          (3) Carrier.--The term ``carrier'' means a motor 
        carrier, a water carrier, and a freight forwarder.
          (4) Contract carriage.--The term ``contract 
        carriage'' means--
                  (A) for transportation provided before 
                January 1, 1996, service provided pursuant to a 
                permit issued under section 10923, as in effect 
                on December 31, 1995; and
                  (B) for transportation provided after 
                December 31, 1995, service provided under an 
                agreement entered into under section 14101(b).
          (5) Control.--The term ``control'', when referring to 
        a relationship between persons, includes actual 
        control, legal control, and the power to exercise 
        control, through or by--
                  (A) common directors, officers, stockholders, 
                a voting trust, or a holding or investment 
                company, or
                  (B) any other means.
          (6) Foreign motor carrier.--The term ``foreign motor 
        carrier'' means a person (including a motor carrier of 
        property but excluding a motor private carrier)--
                  (A)(i) that is domiciled in a contiguous 
                foreign country; or
                  (ii) that is owned or controlled by persons 
                of a contiguous foreign country; and
                  (B) in the case of a person that is not a 
                motor carrier of property, that provides 
                interstate transportation of property by motor 
                vehicle under an agreement or contract entered 
                into with a motor carrier of property (other 
                than a motor private carrier or a motor carrier 
                of property described in subparagraph (A)).
          (7) Foreign motor private carrier.--The term 
        ``foreign motor private carrier'' means a person 
        (including a motor private carrier but excluding a 
        motor carrier of property)--
                  (A)(i) that is domiciled in a contiguous 
                foreign country; or
                  (ii) that is owned or controlled by persons 
                of a contiguous foreign country; and
                  (B) in the case of a person that is not a 
                motor private carrier, that provides interstate 
                transportation of property by motor vehicle 
                under an agreement or contract entered into 
                with a person (other than a motor carrier of 
                property or a motor private carrier described 
                in subparagraph (A)).
          (8) Freight forwarder.--The term ``freight 
        forwarder'' means a person holding itself out to the 
        general public (other than as a pipeline, rail, motor, 
        or water carrier) to provide transportation of property 
        for compensation and in the ordinary course of its 
        business--
                  (A) assembles and consolidates, or provides 
                for assembling and consolidating, shipments and 
                performs or provides for break-bulk and 
                distribution operations of the shipments;
                  (B) assumes responsibility for the 
                transportation from the place of receipt to the 
                place of destination; and
                  (C) uses for any part of the transportation a 
                carrier subject to jurisdiction under this 
                subtitle. The term does not include a person 
                using transportation of an air carrier subject 
                to part A of subtitle VII.
          (9) Highway.--The term ``highway'' means a road, 
        highway, street, and way in a State.
          (10) Household goods.--The term ``household goods'', 
        as used in connection with transportation, means 
        personal effects and property used or to be used in a 
        dwelling, when a part of the equipment or supply of 
        such dwelling, and similar property if the 
        transportation of such effects or property is--
                  (A) arranged and paid for by the householder, 
                except such term does not include property 
                moving from a factory or store, other than 
                property that the householder has purchased 
                with the intent to use in his or her dwelling 
                and is transported at the request of, and the 
                transportation charges are paid to the carrier 
                by, the householder; or
                  (B) arranged and paid for by another party.
          (11) Household goods freight forwarder.--The term 
        ``household goods freight forwarder'' means a freight 
        forwarder of one or more of the following items: 
        household goods, unaccompanied baggage, or used 
        automobiles.
          (12) Motor carrier.--The term ``motor carrier'' means 
        a person providing motor vehicle transportation for 
        compensation.
          (13) Motor private carrier.--The term ``motor private 
        carrier'' means a person, other than a motor carrier, 
        transporting property by motor vehicle when--
                  (A) the transportation is as provided in 
                section 13501 of this title;
                  (B) the person is the owner, lessee, or 
                bailee of the property being transported; and
                  (C) the property is being transported for 
                sale, lease, rent, or bailment or to further a 
                commercial enterprise.
          (14) Motor vehicle.--The term ``motor vehicle'' means 
        a vehicle, machine, tractor, trailer, or semitrailer 
        propelled or drawn by mechanical power and used on a 
        highway in transportation, or a combination determined 
        by the Secretary, but does not include a vehicle, 
        locomotive, or car operated only on a rail, or a 
        trolley bus operated by electric power from a fixed 
        overhead wire, and providing local passenger 
        transportation similar to street-railway service.
          (15) Noncontiguous domestic trade.--The term 
        ``noncontiguous domestic trade'' means transportation 
        subject to jurisdiction under chapter 135 involving 
        traffic originating in or destined to Alaska, Hawaii, 
        or a territory or possession of the United States.
          (16) Person.--The term ``person'', in addition to its 
        meaning under section 1 of title 1, includes a trustee, 
        receiver, assignee, or personal representative of a 
        person.
          (17) Pre-arranged ground transportation service.--The 
        term ``pre-arranged ground transportation service'' 
        means transportation for a passenger (or a group of 
        passengers) that is arranged in advance (or is operated 
        on a regular route or between specified points) and is 
        provided in a motor vehicle with a seating capacity not 
        exceeding 15 passengers (including the driver).
          [(17)] (18) Secretary.--The term ``Secretary'' means 
        the Secretary of Transportation.
          [(18)] (19) State.--The term ``State'' means the 50 
        States of the United States and the District of 
        Columbia.
          (20) Taxicab service.--The term ``taxicab service'' 
        means passenger transportation in a motor vehicle 
        having a capacity of not more than 8 passengers 
        (including the driver), not operated on a regular route 
        or between specified places, and that--
                  (A) is licensed as a taxicab by a State or a 
                local jurisdiction; or
                  (B) is offered by a person that--
                          (i) provides local transportation for 
                        a fare determined (except with respect 
                        to transportation to or from airports) 
                        primarily on the basis of the distance 
                        traveled; and
                          (ii) does not primarily provide 
                        transportation to or from airports.
          [(19)] (21) Transportation.--The term 
        ``transportation'' includes--
                  (A) a motor vehicle, vessel, warehouse, 
                wharf, pier, dock, yard, property, facility, 
                instrumentality, or equipment of any kind 
                related to the movement of passengers or 
                property, or both, regardless of ownership or 
                an agreement concerning use; and
                  (B) services related to that movement, 
                including arranging for, receipt, delivery, 
                elevation, transfer in transit, refrigeration, 
                icing, ventilation, storage, handling, packing, 
                unpacking, and interchange of passengers and 
                property.
          [(20)] (22) United states.--The term ``United 
        States'' means the States of the United States and the 
        District of Columbia.
          [(21)] (23) Vessel.--The term ``vessel'' means a 
        watercraft or other artificial contrivance that is 
        used, is capable of being used, or is intended to be 
        used, as a means of transportation by water.
          [(22)] (24) Water carrier.--The term ``water 
        carrier'' means a person providing water transportation 
        for compensation.

           *       *       *       *       *       *       *


                       CHAPTER 135. JURISDICTION

Sec. 13506. Miscellaneous motor carrier transportation exemptions

  (a) In General.--Neither the Secretary nor the Board has 
jurisdiction under this part over--
          (1) a motor vehicle transporting only school children 
        and teachers to or from school;
          [(2) a motor vehicle providing taxicab service and 
        having a capacity of not more than 6 passengers and not 
        operated on a regular route or between specified 
        places;]
          (2) a motor vehicle providing taxicab service;
          (3) a motor vehicle owned or operated by or for a 
        hotel and only transporting hotel patrons between the 
        hotel and the local station of a carrier;
          (4) a motor vehicle controlled and operated by a 
        farmer and transporting--
                  (A) the farmer's agricultural or 
                horticultural commodities and products; or
                  (B) supplies to the farm of the farmer;
          (5) a motor vehicle controlled and operated by a 
        cooperative association (as defined by section 15(a) of 
        the Agricultural Marketing Act (12 U.S.C. 1141j(a))) or 
        by a federation of cooperative associations if the 
        federation has no greater power or purposes than a 
        cooperative association, except that if the cooperative 
        association or federation provides transportation for 
        compensation between a place in a State and a place in 
        another State, or between a place in a State and 
        another place in the same State through another State--
                  (A) for a nonmember that is not a farmer, 
                cooperative association, federation, or the 
                United States Government, the transportation 
                (except for transportation otherwise exempt 
                under this subchapter)--
                            (i) shall be limited to 
                        transportation incidental to the 
                        primary transportation operation of the 
                        cooperative association or federation 
                        and necessary for its effective 
                        performance; and
                            (ii) may not exceed in each fiscal 
                        year 25 percent of the total 
                        transportation of the cooperative 
                        association or federation between those 
                        places, measured by tonnage; and
                  (B) the transportation for all nonmembers may 
                not exceed in each fiscal year, measured by 
                tonnage, the total transportation between those 
                places for the cooperative association or 
                federation and its members during that fiscal 
                year;
          (6) transportation by motor vehicle of--
                  (A) ordinary livestock;
                  (B) agricultural or horticultural commodities 
                (other than manufactured products thereof);
                  (C) commodities listed as exempt in the 
                Commodity List incorporated in ruling numbered 
                107, March 19, 1958, Bureau of Motor Carriers, 
                Interstate Commerce Commission, other than 
                frozen fruits, frozen berries, frozen 
                vegetables, cocoa beans, coffee beans, tea, 
                bananas, or hemp, or wool imported from a 
                foreign country, wool tops and noils, or wool 
                waste (carded, spun, woven, or knitted);
                  (D) cooked or uncooked fish, whether breaded 
                or not, or frozen or fresh shellfish, or 
                byproducts thereof not intended for human 
                consumption, other than fish or shellfish that 
                have been treated for preserving, such as 
                canned, smoked, pickled, spiced, corned, or 
                kippered products; and
                  (E) livestock and poultry feed and 
                agricultural seeds and plants, if such products 
                (excluding products otherwise exempt under this 
                paragraph) are transported to a site of 
                agricultural production or to a business 
                enterprise engaged in the sale to agricultural 
                producers of goods used in agricultural 
                production;
          (7) a motor vehicle used only to distribute 
        newspapers;
          (8)(A) transportation of passengers by motor vehicle 
        incidental to transportation by aircraft;
          (B) transportation of property (including baggage) by 
        motor vehicle as part of a continuous movement which, 
        prior or subsequent to such part of the continuous 
        movement, has been or will be transported by an air 
        carrier or (to the extent so agreed by the United 
        States and approved by the Secretary) by a foreign air 
        carrier; or
          (C) transportation of property by motor vehicle in 
        lieu of transportation by aircraft because of adverse 
        weather conditions or mechanical failure of the 
        aircraft or other causes due to circumstances beyond 
        the control of the carrier or shipper;
          (9) the operation of a motor vehicle in a national 
        park or national monument;
          (10) a motor vehicle carrying not more than 15 
        individuals in a single, daily roundtrip to commute to 
        and from work;
          (11) transportation of used pallets and used empty 
        shipping containers (including intermodal cargo 
        containers), and other used shipping devices (other 
        than containers or devices used in the transportation 
        of motor vehicles or parts of motor vehicles);
          (12) transportation of natural, crushed, vesicular 
        rock to be used for decorative purposes;
          (13) transportation of wood chips;
          (14) brokers for motor carriers of passengers, except 
        as provided in section 13904(d); or
          (15) transportation of broken, crushed, or powdered 
        glass.
  (b) Exempt Unless Otherwise Necessary.--Except to the extent 
the Secretary or Board, as applicable, finds it necessary to 
exercise jurisdiction to carry out the transportation policy of 
section 13101, neither the Secretary nor the Board has 
jurisdiction under this part over--
          (1) transportation provided entirely in a 
        municipality, in contiguous municipalities, or in a 
        zone that is adjacent to, and commercially a part of, 
        the municipality or municipalities, except--
                  (A) when the transportation is under common 
                control, management, or arrangement for a 
                continuous carriage or shipment to or from a 
                place outside the municipality, municipalities, 
                or zone; or
                  (B) that in transporting passengers over a 
                route between a place in a State and a place in 
                another State, or between a place in a State 
                and another place in the same State through 
                another State, the transportation is exempt 
                from jurisdiction under this part only if the 
                motor carrier operating the motor vehicle also 
                is lawfully providing intrastate transportation 
                of passengers over the entire route under the 
                laws of each State through which the route 
                runs;
          (2) transportation by motor vehicle provided 
        casually, occasionally, or reciprocally but not as a 
        regular occupation or business, except when a broker or 
        other person sells or offers for sale passenger 
        transportation provided by a person authorized to 
        transport passengers by motor vehicle under an 
        application pending, or registration issued, under this 
        part; or
          (3) the emergency towing of an accidentally wrecked 
        or disabled motor vehicle.

           *       *       *       *       *       *       *


                  CHAPTER 145. FEDERAL-STATE RELATIONS

Sec. 14501. Federal authority over intrastate transportation

  (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, or to intrastate bus transportation of 
        any nature in the State of Hawaii.
          (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.
  (b) Freight Forwarders and Brokers.--
          (1) General rule.--Subject to paragraph (2) of this 
        subsection, no State or political subdivision thereof 
        and no intrastate 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 intrastate rates, 
        intrastate routes, or intrastate services of any 
        freight forwarder or broker.
          (2) Continuation of hawaii's authority.--Nothing in 
        this subsection and the amendments made by the Surface 
        Freight Forwarder Deregulation Act of 1986 shall be 
        construed to affect the authority of the State of 
        Hawaii to continue to regulate a motor carrier 
        operating within the State of Hawaii.
  (c) Motor Carriers of Property.--
          (1) General rule.--Except as provided in paragraphs 
        (2) and (3), a State, political subdivision of a State, 
        or political authority of 2 or more States may not 
        enact or enforce a law, regulation, or other provision 
        having the force and effect of law related to a price, 
        route, or service of any motor carrier (other than a 
        carrier affiliated with a direct air carrier covered by 
        section 41713(b)(4)) or any motor private carrier, 
        broker, or freight forwarder with respect to the 
        transportation of property.
          (2) Matters not covered.--Paragraph (1)--
                  (A) 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 
                hazardous nature of the cargo, or the authority 
                of a State to regulate motor carriers with 
                regard to minimum amounts of financial 
                responsibility relating to insurance 
                requirements and self-insurance authorization;
                  (B) does not apply to the transportation of 
                household goods; and
                  (C) does not apply to the authority of a 
                State or a political subdivision of a State to 
                enact or enforce a law, regulation, or other 
                provision relating to the price of for-hire 
                motor vehicle transportation by a tow truck, if 
                such transportation is performed without the 
                prior consent or authorization of the owner or 
                operator of the motor vehicle.
          (3) State standard transportation practices.--
                  (A) Continuation.--Paragraph (1) shall not 
                affect any authority of a State, political 
                subdivision of a State, or political authority 
                of 2 or more States to enact or enforce a law, 
                regulation, or other provision, with respect to 
                the intrastate transportation of property by 
                motor carriers, related to--
                          (i) uniform cargo liability rules,
                          (ii) uniform bills of lading or 
                        receipts for property being 
                        transported,
                          (iii) uniform cargo credit rules,
                          (iv) antitrust immunity for joint 
                        line rates or routes, classifications, 
                        mileage guides, and pooling, or
                          (v) antitrust immunity for agent-van 
                        line operations (as set forth in 
                        section 13907), if such law, 
                        regulation, or provision meets the 
                        requirements of subparagraph (B).
                  (B) Requirements.--A law, regulation, or 
                provision of a State, political subdivision, or 
                political authority meets the requirements of 
                this subparagraph if--
                          (i) the law, regulation, or provision 
                        covers the same subject matter as, and 
                        compliance with such law, regulation, 
                        or provision is no more burdensome than 
                        compliance with, a provision of this 
                        part or a regulation issued by the 
                        Secretary or the Board under this part; 
                        and
                          (ii) the law, regulation, or 
                        provision only applies to a carrier 
                        upon request of such carrier.
                  (C) Election.--Notwithstanding any other 
                provision of law, a carrier affiliated with a 
                direct air carrier through common controlling 
                ownership may elect to be subject to a law, 
                regulation, or provision of a State, political 
                subdivision, or political authority under this 
                paragraph.
          (4) Nonapplicability to hawaii.--This subsection 
        shall not apply with respect to the State of Hawaii.
  (d) Pre-Arranged Ground Transportation.--
          (1) In general.--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 requiring a license 
        or fee on account of the fact that a motor vehicle is 
        providing pre-arranged ground transportation service if 
        the motor carrier providing such service--
                  (A) meets all applicable registration 
                requirements under chapter 139 for the 
                interstate transportation of passengers;
                  (B) meets all applicable vehicle and 
                intrastate passenger licensing requirements of 
                the State or States in which the motor carrier 
                is domiciled or registered to do business; and
                  (C) is providing such service pursuant to a 
                contract for--
                          (i) transportation by the motor 
                        carrier from one State, including 
                        intermediate stops, to a destination in 
                        another State; or
                          (ii) transportation by the motor 
                        carrier from one State, including 
                        intermediate stops in another State, to 
                        a destination in the original State.
          (2) Intermediate stop defined.--In this section, the 
        term ``intermediate stop'', with respect to 
        transportation by a motor carrier, means a pause in the 
        transportation in order for one or more passengers to 
        engage in personal or business activity, but only if 
        the driver providing the transportation to such 
        passenger or passengers does not, before resuming the 
        transportation of such passenger (or at least 1 of such 
        passengers), provide transportation to any other person 
        not included among the passengers being transported 
        when the pause began.
          (3) Matters not covered.--Nothing in this subsection 
        shall be construed--
                  (A) as subjecting taxicab service to 
                regulation under chapter 135 or section 31138;
                  (B) as prohibiting or restricting an airport, 
                train, or bus terminal operator from 
                contracting to provide preferential access or 
                facilities to one or more providers of pre-
                arranged ground transportation service; and
                  (C) as restricting the right of any State or 
                political subdivision of a State to require, in 
                a nondiscriminatory manner, that any individual 
                operating a vehicle providing prearranged 
                ground transportation service originating in 
                the State or political subdivision have 
                submitted to pre-licensing drug testing or a 
                criminal background investigation of the 
                records of the State in which the operator is 
                domiciled, by the State or political 
                subdivision by which the operator is licensed 
                to provide such service, or by the motor 
                carrier providing such service, as a condition 
                of providing such service.

           *       *       *       *       *       *       *


             SUBTITLE VI. MOTOR VEHICLE AND DRIVER PROGRAMS

                           PART B. COMMERCIAL

              CHAPTER 311. COMMERCIAL MOTOR VEHICLE SAFETY

Sec. 31138. Minimum financial responsibility for transporting 
                    passengers

  (a) General Requirement.--The Secretary of Transportation 
shall prescribe regulations to require minimum levels of 
financial responsibility sufficient to satisfy liability 
amounts established by the Secretary covering public liability 
and property damage for the transportation of passengers for 
compensation by motor vehicle in the United States between a 
place in a State and--
          (1) a place in another State;
          (2) another place in the same State through a place 
        outside of that State; or
          (3) a place outside the United States.
  (b) Minimum Amounts.--The level of financial responsibility 
established under subsection (a) of this section for a motor 
vehicle with a seating capacity of--
          (1) at least 16 passengers shall be at least 
        $5,000,000; and
          (2) not more than 15 passengers shall be at least 
        $1,500,000.
  (c) Evidence of Financial Responsibility.--
          (1) Subject to paragraph (2) of this subsection, 
        financial responsibility may be established by evidence 
        of one or a combination of the following if acceptable 
        to the Secretary of Transportation:
                  (A) insurance, including high self-retention.
                  (B) a guarantee.
                  (C) a surety bond issued by a bonding company 
                authorized to do business in the United States.
          (2) A person domiciled in a country contiguous to the 
        United States and providing transportation to which a 
        minimum level of financial responsibility under this 
        section applies shall have evidence of financial 
        responsibility in the motor vehicle when the person is 
        providing the transportation. If evidence of financial 
        responsibility is not in the vehicle, the Secretary of 
        Transportation and the Secretary of the Treasury shall 
        deny entry of the vehicle into the United States.
          (3) A motor carrier may obtain the required amount of 
        financial responsibility from more than one source 
        provided the cumulative amount is equal to the minimum 
        requirements of this section.
  (d) Civil Penalty.--
          (1) If, after notice and an opportunity for a 
        hearing, the Secretary of Transportation finds that a 
        person (except an employee acting without knowledge) 
        has knowingly violated this section or a regulation 
        prescribed under this section, the person is liable to 
        the United States Government for a civil penalty of not 
        more than $10,000 for each violation. A separate 
        violation occurs for each day the violation continues
          (2) The Secretary of Transportation shall impose the 
        penalty by written notice. In determining the amount of 
        the penalty, the Secretary shall consider--
                  (A) the nature, circumstances, extent, and 
                gravity of the violation;
                  (B) with respect to the violator, the degree 
                of culpability, any history of prior 
                violations, the ability to pay, and any effect 
                on the ability to continue doing business; and
                  (C) other matters that justice requires.
          (3) The Secretary of Transportation may compromise 
        the penalty before referring the matter to the Attorney 
        General for collection.
          (4) The Attorney General shall bring a civil action 
        in an appropriate district court of the United States 
        to collect a penalty referred to the Attorney General 
        for collection under this subsection.
          (5) The amount of the penalty may be deducted from 
        amounts the Government owes the person. An amount 
        collected under this section shall be deposited in the 
        Treasury as miscellaneous receipts.
  (e) Nonapplication.--This section does not apply to a motor 
vehicle--
          (1) transporting only school children and teachers to 
        or from school;
          [(2) providing taxicab service, having a seating 
        capacity of not more than 6 passengers, and not being 
        operated on a regular route or between specified 
        places;]
          (2) providing taxicab service (as defined in section 
        13102);
          (3) carrying not more than 15 individuals in a 
        single, daily round trip to and from work; or
          (4) providing transportation service within a transit 
        service area under an agreement with a Federal, State, 
        or local government funded, in whole or in part, with a 
        grant under section 5307, 5310, or 5311, including 
        transportation designed and carried out to meet the 
        special needs of elderly individuals and individuals 
        with disabilities; except that, in any case in which 
        the transit service area is located in more than 1 
        State, the minimum level of financial responsibility 
        for such motor vehicle will be at least the highest 
        level required for any of such States.

                                  
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