Regulatory and Legislative Update - April 2021

Contents

FMCSA has extended its emergency declaration regarding COVID-19 through May 31. For the latest version and other guidance related to COVID-19 is available at www.fmcsa.dot.gov/COVID-19.

Regulation and Enforcement

• DOL proposes to withdraw rule on worker classification
• DOT rescinds Trump administration’s changes on rulemakings, guidance
• CVSA to hold enforcement events in May and July
• Bus operator seeks exemption from full clearinghouse query in hiring
• Armored car operation seeks exemption to weld front doors shut
• FMCSA grants windshield exemption to Bendix

Legislation

• West Virginia law allows clear path to independent contractor status
• Biden infrastructure plan envisions passage of the PRO Act
• Bills reintroduced to allow 18-year-old interstate drivers under specific conditions
• House and Senate bills would require underride protection rulemaking
• House bill would authorize $755 million to expand commercial truck parking
• Sen. Fischer reintroduces bill to loosen restrictions on agricultural hauling
• Senate bill would establish federal working group on electric vehicles

Advocacy and Comment

Regulation and Enforcement

DOL proposes to withdraw rule on worker classification

Comments are due April 12 on a notice of proposed rulemaking (NPRM) to withdraw a Trump administration rule regarding independent contractor status. The U.S. Department of Labor’s Wage and Hour Division (WHD) had already delayed the effectiveness of the rule until May 7 while it reviewed the regulation. The Trump administration regulation, which was issued in January and originally scheduled to take effect in March, adopted a new “economic reality” test to determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FSLA).

In the NPRM, WHD said that courts and the department have not used the new economic reality test and that neither the text of the FLSA nor longstanding case law support the test. WHD said the rule would narrow or minimize other factors that courts have traditionally considered, making the economic test less likely to establish that a worker is an employee under the FLSA. For the NPRM, visit https://www.federalregister.gov/d/2021-05256.

DOT rescinds Trump administration’s changes on rulemakings, guidance

The U.S. Department of Transportation (DOT) issued a final rule that rescinds policies and procedures related to rulemaking, guidance, and enforcement that DOT had implemented in December 2019. The rule affects not only department-level proceedings but also those within its agencies, including the Federal Motor Carrier Safety Administration.

The 2019 changes largely wrote into DOT regulations (49 CFR part 5) some of the reforms that had been ordered by various executive orders issued by President Trump. Those included regulatory reform policies on regulatory budgeting, the “2-for-1” plan (repealing two rules for every one new rule), and the Regulatory Reform Task Force.

In its latest action, DOT said it was responding to two recently issued executive orders that (1) revoke several Trump administration executive orders relating to rulemaking, guidance, and regulatory enforcement (E.O. 13992) and (2) direct executive departments to review regulations that conflict with the objectives concerning protecting public and the environment (E.O. 13990). However, the new rule rescinds more than just provisions directly attributable to now-revoked executive orders. The department also has rescinded regulations in 49 CFR part 5 that:

• Solely apply to the department's internal operations “and thus need not be codified in the Code of Federal Regulations;”
• Are duplicative of existing procedures contained in internal departmental procedural directives; and
• Are derived from the Administrative Procedure Act and significant judicial decisions “and thus need not be adopted by regulation in order to be effective.” 49 CFR part 5, subpart D – Enforcement Procedures was rescinded in its entirety for that reason, DOT said.

DOT said removing these provisions “ensures that the Department is able to effectively and efficiently promulgate new Federal regulations and other actions to support the objectives stated in E.O. 13990.” However, the department said the regulations would continue to include provisions related to the public’s ability to interact with DOT on rulemaking matters and activities. For example, DOT retained procedures for the public to petition for rulemakings and exemptions. Although the new rule rescinds language that explicitly provided for retrospective reviews and guidance document petitions, “the Department will nevertheless accept and process these types of petitions,” it said.

DOT issued the new rule without a notice-and-comment process on the grounds that Administrative Procedure Act requirements do not apply to an action that is a rule of agency organization, procedure, or practice. The same was true for the December 2019 rule that this rule largely overturns.

For the Federal Register notice of the final rule, visit https://www.federalregister.gov/d/2021-06416. For DOT’s December 2019 rule, visit https://www.federalregister.gov/d/2019-26672.

CVSA to hold enforcement events in May and July

The Commercial Vehicle Safety Alliance has scheduled its annual Operation Safe Driver Week for July 11-17 with an emphasis on speeding. During Operation Safe Driver Week, law enforcement personnel will be on the lookout for commercial motor vehicle drivers and passenger vehicle drivers engaging in risky driving behaviors in or around a commercial motor vehicle (CMV).

CVSA previously announced that its annual International Roadcheck enhanced inspection event would be held May 4-6. The emphasis of this year’s Roadcheck will be lighting and hours of service. Roadcheck traditionally has been held in early June, but CVSA moved it up a month because its research has shown that weather tends to be better in early May than in early June.

Bus operator seeks exemption from full clearinghouse query in hiring

FMCSA is requesting comments by April 15 on an application by FirstGroup plc for an exemption to allow it to use a limited pre-employment query of the drug and alcohol clearinghouse as a screen when hiring school bus and transit drivers rather than having to conduct a full pre-employment query as required under the regulations. FirstGroup says the requirement for a full query is hindering its ability to hire at the speed and level needed to keep pace with the demands of the contracted school and transit transportation industry and is resulting in hundreds of thousands of dollars of increased costs.

Under the requested exemption, in lieu of a full query, FirstGroup would conduct a limited pre-employment query of the clearinghouse. If the limited query indicated that information about the driver existed, the company would then conduct a full query of the clearinghouse with the driver-applicant providing consent in the clearinghouse as required. FirstGroup also would conduct a second limited query within 30 to 35 days of the initial limited query and conduct multiple limited queries on all its CDL drivers each year thereafter. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-05328.

Armored car operation seeks exemption to weld front doors shut

FMCSA is inviting comments by May 7 on an application from Loomis Armored US, LLC for an exemption to allow the driver and passenger doors of the cab of its specialized armored vehicles to be welded shut. Loomis believes that welding shut the cab doors and adding two new doors behind the cab will maintain safety while allowing secure armored car operations with reduced staff. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-07102.

FMCSA grants windshield exemption to Bendix

FMCSA granted an exemption to Bendix Commercial Vehicle Systems to allow its advanced vehicle safety systems, which are equipped with cameras, to be mounted lower in the windshield on CMVs than is currently permitted. For the Federal Register notice, visit https://www.federalregister.gov/d/2021-06982.

Legislation

West Virginia law allows clear path to independent contractor status

LegislationWest Virginia Gov. Jim Justice last month signed legislation (Senate Bill 272) intended to provide a clear framework for establishing when a worker is an independent contractor or employee. The findings section of the new law notes that legal standards are not only often subjective but also often vary depending on the particular law at issue. The goal of the legislation is to provide certainty and clarity for all involved.

Under the new law, a person is an independent contractor if there is a written contract stating such and the person satisfies any three of nine specified conditions that indicate an independent contractor relationship. Of particular interest in the trucking context is a provision that explicitly allows firms using the services of an independent contractor to specify safety-related devices, procedures, or training. For the text of the West Virginia law, visit http://bit.ly/WVA-IC.

Biden infrastructure plan envisions passage of the PRO Act

The Biden administration’s proposed American Jobs Plan – a $2.3 trillion broadly defined infrastructure package – apparently contemplates enactment of various pro-labor measures, including the Protecting the Right to Organize Act, or PRO Act. An endorsement of the PRO Act is contained in a White House fact sheet on the American Jobs Plan, specifically in a section that proposes measures aimed at promoting union organization and collective bargaining.

The U.S. House of Representatives has already passed the PRO Act on a party line vote. Among a host of pro-labor provisions, the bill (H.R. 842) includes language that would mandate a federal ABC test for worker classification similar to that in California’s AB 5. The bill also would explicitly declare misclassification of workers a violation of the National Labor Relations Act.

Although broadly billed as an infrastructure plan, the American Jobs Plan allocates relatively little money for highways – just 5% of the total cost. Most of the funding goes into construction and retrofitting of buildings and into investments in Biden administration priorities, such as promoting adoption of electric vehicles. Almost as controversial as the labor provisions are the financing measures, including an increase in the corporate tax rate to 28% and the sunset of various tax benefits for companies that operate overseas. The bill also would eliminate tax preferences held by the petroleum industry. To view the fact sheet on the American Jobs Plan, click on the “Learn More” button at https://www.whitehouse.gov/american-jobs-plan.

Bills reintroduced to allow 18-year-old interstate drivers under specific conditions

Legislation (S. 659, H.R. 1745) that would establish an apprenticeship program allowing for interstate drivers aged 18 to 20 was reintroduced in both the House and Senate last month. The Developing Responsible Individuals for a Vibrant Economy Act, or DRIVE Safe Act, would require separate probationary periods of 120 hours and 280 hours, each with specific performance benchmarks. A driver could not transport hazardous materials until after completing the 120-hour probationary period hauling non-hazmat freight.

The legislation would allow 18- to 20-year-olds to drive interstate only if the CMV is governed at 65 mph and equipped with automatic manual or automatic transmissions; active braking collision mitigation systems; and Forward-facing video event capture. The legislation has been introduced in the past two Congresses but failed to advance. For more information, visit https://www.congress.gov/bill/117th-congress/senate-bill/659 and https://www.congress.gov/bill/117th-congress/house-bill/1745.

House and Senate bills would require underride protection rulemaking

Sen. Kirsten Gillibrand (D-New York) and Rep. Steve Cohen (D-Tennessee) reintroduced legislation (S. 605, H.R. 1622) that would mandate regulations to require installation and retrofit of rear, side, and front underride guards on all CMVs with gross vehicle weight ratings of more than 10,000 pounds. The bill also would specify performance standards for each type of underride guard as well as require rules on inspection, maintenance, and repair of the devices. Essentially the same bills were introduced in the past two Congresses. For more information, visit and https://www.congress.gov/bill/117th-congress/senate-bill/605 and https://www.congress.gov/bill/117th-congress/senate-bill/659.

House bill would authorize $755 million to expand commercial truck parking

Reps. Mike Bost (R-Illinois) and Angie Craig (D-Minnesota) have reintroduced legislation (H.R. 2187) that would establish a set-aside source of funding to expand more commercial truck parking throughout the U.S. The bill would authorize $755 million total in annual increments. The funds could be used at a variety of locations, including construction of public rest areas and commercial vehicle parking facilities and parking capacity next to commercial truck stops, weigh stations, and public and private freight facilities. For more information, visit https://www.congress.gov/bill/117th-congress/house-bill/2187.

Sen. Fischer reintroduces bill to loosen restrictions on agricultural hauling

Sen. Deb Fischer (R-Nebraska), the ranking Republican on the Senate subcommittee that oversees trucking regulations, has introduced legislation (S. 792) to modify certain agricultural exemptions for HOS requirements. The bill would eliminate the limitation that applies ag and livestock HOS exemptions only during state-designated planting and harvesting seasons. The bill also would amend and clarify the definition of “agricultural commodities” and authorize a 150 air-mile exemption from HOS requirements on the destination side of a haul for ag and livestock haulers. For details of S. 792, visit https://www.congress.gov/bill/117th-congress/senate-bill/792.

Senate bill would establish federal working group on electric vehicles

Sen. Catherine Cortez Masto (D-Nevada) introduced legislation (S. 508) that would establish a federal working group to make recommendations on the development, adoption, and integration of light and heavy-duty electric vehicles into the transportation and energy systems of the U.S. The working group would include federal and private sector members, including at least one representative of the trucking industry. For more information, visit https://www.congress.gov/bill/117th-congress/senate-bill/508.

Advocacy and Comment

Easy Come, Easy Go

Advocacy and CommentLast year, the Department of Transportation issued internal rules providing needed clarity and due process applicable to FMCSA investigations, safety ratings and civil forfeitures. The Agency’s decisions got little publicity but were reviewed with approval approximately a year later in a transportation lawyers’ journal.

Unfortunately, the ink was not dry on the article before incoming Secretary Pete Buttigieg issued a 19-page document largely countermanding the previous findings and eliminating administrative restraints on regulatory abuses the earlier rules were intended to address.

The formal rulemaking process, which was not followed, includes an opportunity for notice and comment, the development of a record for appeal, and the provision for due consideration concerning the effect of the regulations on small carriers. Unfortunately, neither the Trump Administration’s findings nor Buttigieg’s reversal were based on any opportunity for notice or comment. Both must be viewed as “Rules du Jour” (rules of the day).

All too frequently, administrative agencies have grown accustomed to publishing guidance documents masquerading as rules which themselves offer no due process as the FMCSA’s touting of SMS methodology has poignantly demonstrated.

The formal rulemaking process, while cumbersome, is an important procedural protection against unvetted material changes in regulations. The first 100 days of the new administration indicate that there may be many new regulatory and legislative developments to be covered in the coming months.

Owner Operator Update

As previously noted, the PRO Act passed by the House would, along with other pro-labor provisions, eliminate independent contractor treatment of owner-operators. The chance of passage in the Senate may be increased by the parliamentarians’ decision that revenue bills are not subject to a 60-vote filibuster. The FAST Act has been tied to the infrastructure funding bill, which could thus result in a greater chance of passage.