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When to Apply for FMCSA Certificate

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Timing is the most important part of applying for your first FMCSA Certificate of Public Convenience and Necessity. The Application process is quick, especially if you file online, since you get an MC Number and a USDOT Number immediately. However, you are then required to file your proof of insurance within 20 days. If not, a Decision is issued granting you an additional 60 days within which to comply or have your Application dismissed. As stated in the preceding article on the new “vetting” procedure, this may take 4-6 weeks to gain approval. All the while you are paying for insurance and the financing on the new bus, but unable to operate same. Here is what I suggest. About 60 days prior to the date upon which you wish to operate, file the Application with the FMCSA and USDOT, arrange for the bus to be held for you for 60 days, arrange for insurance to be filed 40 days after your Application is submitted, and hopefully, everything will coincide at the 60 day mark, i.e. your Certificate is received, and the bus is ready to be picked up for inspection by your State DOT.

Jerry A. Casser, Esq. (Fairfield NJ Transportation attorney)  www.jcasser.com


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FMCSA Vetting Procedures

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Applicants for operating authority from the FMCSA are now finding that the application process can no longer be completed in 24 days, but may take 2 months or more. Since August 2008, the FMCSA has determined that new entrants have to be vetted to determine whether they are legitimately new carriers, or formerly approved carriers who have simply gone out of business and changed their names, only to apply for new authority. The FMCSA will examine new applicants to determine who the principals are and whether there are any affiliations with disqualified or unsafe operators. Once satisfied, the Certificate will be issued. However, a number of applicants have been denied authority. Bottom line for new applicants – be prepared to wait awhile for approval.

Follow up on 5/14/09:

The FMCSA had estimated to me that the additional time needed to investigate the applicant would be 6-8 weeks.  It has actually been 7 weeks, meaning that the total amount of time needed to obtain the Certificate is 10 weeks.  Be forewarned.  You must have your insurance in effect to avoid dismissal.  Therefore, only put one bus on the policy until approval is granted in order to minimize the insurance cost. Then add the additional buses to the policy.

Follow up on 6/16/09:

The FMCSA seems to be finally getting their act together.  Based on this week’s mail, it appears that my latest Application will make it through in exactly 2 months.  All in all, this is not terrible, as long as you can depend on this being done in a consistent pattern. My worst case is 5 1/2 months amid numerous requests for additional information.

 

Jerry A. Casser, Esq. (Fairfield NJ Transportation attorney)  www.jcasser.com


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Pending – Discontinuance of Commuter Service

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The NJ State Legislature has proposed legislation that will require any bus company providing commuter bus service to provide all communities served with 45 days notice of the “intention” to file a Petition with the NJMVC to discontinue service. Present Regulations simply require the communities to be served with a copy of the “filed” Petition, giving 30 days notice of the request to discontinue service. Basically, the proposed legislation gives each community a minimum of 75 days notice, with a better opportunity to mobilize opposition, or possibly to negotiate a reduced level of service with the bus company. While the added notice period may be considered a hindrance to a proposed discontinuance, in actuality the NJMVC is not particularly receptive to any discontinuance of commuter service and does not usually act on the Petitions within the standard 30 day period. [Note: This Article was recently published by me in the GNJMA NEWSGRAM]

Jerry A. Casser, Esq. (Fairfield NJ Transportation attorney)  www.jcasser.com


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NJ MVC Annual Reports

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It seems as if many NJ Bus Companies, possibly the newer ones, have either forgotten about or are unaware of the requirement of filing an Annual Report with the NJ MVC. The Annual Reports are due no later than March 31st covering the preceding calendar year. It had been by experience that the forms were mailed to the bus carriers during January, leaving sufficient time to complete and file same. However, during the past week, the MVC has mailed a number of the forms to me as attorney for the newer companies advising that the deadline had been missed and establishing a new deadline of August 1st.

There are serious penalties for non-compliance, i.e. revocation of operating authority in addition to a daily penalty for the late filing. No one can afford to lose their operating authority, so it behooves each and every bus company to do the requisite filing. In most cases, the filing will be done by the accountant or controller for the company, as the key information is financial (income statement and balance sheet). Fees are based upon revenues for the year. If anyone has a particular question about preparation or filing, please direct it to me at jerry@jcasser.com and I will try to help.

Jerry A. Casser, Esq. (Fairfield NJ Transportation attorney)  www.jcasser.com


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Bus Insurance – Cancelled

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Most bus company owners are unaware of the requirement of your local DOT and the Federal Motor Carrier Safety Administration that a cancellation of insurance by the insurance company requires 30 days advance notice to the Agency. The time is calculated from the date of receipt, not the date of mailing, so the insurance company must be very careful to properly calculate the notice period.

Why is this important? It isn’t important if you pay your insurance premiums when they are due and maintain your insurance coverage in good standing. However, things happen and let’s assume you fail to make a payment and receive notice of cancellation. It is important to note the date of mailing, the date of receipt, and the effective date of cancellation given to the Regulatory Agencies. More times than not, the insurance company has improperly calculated the cancellation date and not given the required notice.

Can the insurance company cure the error? Sure, by sending out a new 30 days notice.

If you are caught in the situation of receiving a cancellation notice, and the insurance company will not agree to reinstate coverage upon payment of the arrearage, check the date on the cancellation notice. Was 30 days given? If not, notify the Federal Motor Carrier Safety Administration and your local DOT of the error. If this fails, get an attorney quickly who can get into Court on short notice for a restraining order to prevent the notice from becoming effective. Or, better yet, and possibly cheaper for you, contact an experienced Transportation Attorney who can persuade the insurance company to back off and reinstate your coverage upon payment of the arrearage.

Jerry A. Casser, Esq. (Fairfield NJ Transportation attorney)  www.jcasser.com


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Protecting the Intrastate Bus Route

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Approximately two years ago, Genesis Bus Lines, a small minibus operator from Paterson, attempted to circumvent NJ MVC Regulations by obtaining an operating Certificate from the FMCSA to provide interstate commuter bus service from Orange, NJ to New York City via Newark and Elizabeth. This is perfectly legal, if the buses do in fact go into NYC, but in this case we contended that they did not, turning around in Elizabeth and returning to Orange, a purely local route.

Coach USA operated the Orange-Elizabeth route for many years through its O.N.E. Bus subsidiary. In order to protect its route and revenues, O.N.E. Bus sought assistance from the NJ MVC and the Elizabeth Municipal Court, each of which has jurisdiction to enforce the NJ Statute that requires the operator to obtain operating authority from the NJ MVC.

Genesis, alleging harassment of its drivers, proceeded into Federal Court, while also using the newspapers and their attorney’s web blog to build a case. I filed a Complaint Petition with the NJ MVC which could not be removed to Federal Court, and obtained a Cease and Desist Order against Genesis. The matter was then transmitted to the Office of Administrative Law for a fact hearing to determine what in fact Genesis was doing – conducting a bona fide interstate route, or conducting an intrastate route under the guise of an interstate operation.

The Hearing was held in February. As plaintiff, we proceeded first and presented our witnesses and evidence, including a video tape of a Genesis minibus operating its daily route to Elizabeth and not beyond. Following this display, Genesis agreed to a settlement specifically agreeing that any trips operating along this route would either begin or end in NYC. It goes without saying that the minibuses have not returned to the route.

Jerry A. Casser, Esq. (Fairfield NJ Transportation attorney)  www.jcasser.com


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Intrastate Bus Service on Interstate Certificate

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When can a bus operator legally provide local or intrastate service under an Interstate Certificate?

The answer seems relatively simple when one reads some of the Federal Decisions as well as the language contained on the Federal Certificate issued by the Federal Motor Carrier Safety Administration. If the bus company provides substantial interstate service on its interstate route, it may provide local or intrastate service on that route. That part is clear. What is not so clear is whether the company may provide interstate service in some of its vehicles and wholly intrastate service in some of its vehicles.

It is clear that buses traveling on an interstate route can pick up and drop off local or intrastate passengers along the route that crosses state lines. Additionally, the former ICC had ruled in a published Decision that intrastate service need not be provided in the same vehicles which would seem to answer the previous question.

However, this is where the “substantial” interstate service comes into play. The ICC had ruled in one of my cases (actually the last Decision issued by the ICC before it was legislated out of existence) that two of my bus company clients could provide separate interstate and intrastate service (separate vehicles or trips) based on the fact situations presented (in one case, the bus company had 90% of its trips interstate, and in the other about 80%). The ICC did not set a percentage test in its findings and I have generally advised my clients that 70% was the minimum level of interstate service that has to be provided in order to provide local service in separate vehicles.

I will point out, however, that the current position of the NJ MVC is not in agreement with either my position or the ICC Decisions. The MVC has been issuing Summonses to some of my clients where they perceive that a single trip was conducted intrastate, even though 480 trips were interstate on the same date. I have successfully defended these matters in Municipal Court, although the decisions rendered by the Judges in each case were on evidentiary grounds for dismissing the MVC Inspectors’ testimony.

Jerry A. Casser, Esq. (Fairfield NJ Transportation attorney)  www.jcasser.com


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Temporary Employment Agencies

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New Jersey has a large number of temporary employment agencies that conduct business in most urban communities. These agencies place workers in employment situations such as warehouses which are located off the beaten path so that public transportation is usually not available.

Transportation is frequently made available through van and minibus operators who are licensed by the State of NJ Motor Vehicle Commission (formerly NJ DOT) to provide Regular Route (Under Contract) Bus or Van Service. The vehicles are inspected by the NJMVC and are required to maintain certain insurance requirements. That is all well and good for the legal operators, but there are bus and van operators who operate outside of the law and fail to obtain approval from the MVC and simply operate until discovered operating illegally.

The State of NJ has stepped in and adopted legislation, approved in January 2007, which requires the employment agencies to register with the State of NJ and imposes upon these agencies a requirement that they assure compliance by the bus and van operators that they use with the NJMVC Regulations under Title 48. Specifically, if the agency operates the transportation service, or recommends a particular transportation service, or refers the people to a particular transportation service, the agency must assure themselves and maintain records to assure that the transportation company is in full compliance with the Regulations.

Penalties are imposed against the agencies for non-compliance, and additionally, the agencies become jointly liable with the transportation company if any of the people transported are injured. Damages in such cases are trebled as the matter has been determined to fall within the purview of the Consumer Fraud Act.

For those agencies that turn a blind eye to what has been going on with regard to this transportation issue, the penalties can be especially serious.

 Jerry A. Casser, Esq. (Fairfield NJ Transportation attorney)  www.jcasser.com


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