The Federal Motor Carrier Safety Administration has warned that it is delaying a previously announced rule change that was going to end the ‘Vehicle Registrant Only’ designation that some owner-operators use in place of their own operating authority. Carriers with this designation may find themselves going through the New Entrant process all over again.
Under rules first published in 2010, FMCSA intended to require all vehicle registrant only carriers to obtain a full operating authority and to go through the new entrant process. For equipment and leasing companies, things were a little more unclear, perhaps explaining why the agency has chosen to delay.
The vehicle registrant only designation was intended as an option for equipment and truck leasing companies and owner-operators leased to another company. The registrants needed their registration to get plates for the truck but did not operate under their own authority.
Unfortunately, some carriers were abusing this option on the MCS-150 to evade enforcement action and the CSA system. FMCSA reported a spike in vehicle registration only claims in the two years since CSA was put into place.
In 2010, carriers that registered this way were sent a note alongside their confirmation letter telling them that this change would go into place on September 1, 2012 and that, after that time period, they would have to undergo the New Entrant process and register as full motor carriers. For many carriers that is not the case any longer.
In a statement issued on September 20, FMCSA has announced changes to these changes. FMCSA, has found a core group of carriers which will be automatically transferred from vehicle only to full owner-operators.
Motor carriers that were registered before March 1, 2011, however, will not be forced to go through the new entrant process. Motor carriers registered after that time period, on the other hand, will be forced to go through the whole process, including an audit. Intrastate carriers will have to register for a full DOT number if they are based in one of the 33 states that requires them to do so.
For equipment and truck leasing companies, the changes are a bit more fuzzy. FMCSA has issued the following guidance: Both short-term rental and long-term leasing providers, that don’t know the DOT number and tax I.D. number of all the motor carriers operating their vehicles, should temporarily register as a motor carrier but note on the form that the safety-responsible motor carrier would be changing in the next year.
The time frame for all of this is now unclear: FMCSA is expected to make an announcement soon.
What can formerly vehicle only carriers expect if they have to go through the new entrant process? It should be the same as everyone else. Within 18 months of registration (but almost always sooner), the carrier will be visited by a DOT auditor who will review the operation to ensure compliance with the DOT regulations.
This audit is intended as an ‘educational’ experience as opposed to punitive. If you are not in compliance with the regulations, you will be given an opportunity to fix it without worrying about fines or punishment. There are, however, certain violations that will get you pulled off the road until you fix them. We highly recommend using an audit support service before the DOT inspectors arrive. Call 1-800-253-5506 to speak with one of our audit specialists.
Another complication with the vehicle registrant only designation, is that it will affect your state-level registration. We recommend calling or visiting your state licensing authority to discuss your status and the next steps you need to take. Remember, even if you fulfill all of your Federal requirements, there are still state laws and rules that can get you into trouble. By talking with an official, you can avoid potentially expensive fines and legal actions.