PURPOSE: This rule prescribes requirements to properly identify leased motor vehicles and drivers when they are operated under certificates and permits issued by the division, to ensure that leased vehicles operated by motor carriers are safely equipped, maintained and operated, and properly insured and licensed, and to prevent the evasion of motor carrier regulatory requirements through regulating the leasing of motor vehicles under certain circumstances.

Editor’s Note: The following material is incorporated into this rule by reference: 1) Federal Aviation Administration Authorization Act of 1994 (H.R. 2739, 103d Congress, 2d Session) (49 U.S. Code sections 11501(h) and 41713(b)). (Washington: U.S. Government Printing Office, 1994). In accordance with section 536.031(4), RSMo, the full text of material incorporated by reference will be made available to any interested person at the Office of the Secretary of State and the headquarters of the adopting state agency.

1. (1) Effective January 1, 1995, the Federal Aviation Administration Authorization Act of 1994 (H.R. 2739, 103d Congress, 2d Session) (49 U.S.C. sections 11501(h) and 41713(b)), generally preempts the states from enacting or enforcing any law, regulation, or other provision having the force and effect of law relating to the prices, routes and services of motor carriers of property (except household goods). However, this Act expressly states that its general rule of preemption shall not restrict the safety regulatory authority of a state with respect to motor vehicles, and shall not restrict the authority of a state to regulate motor carriers with regard to minimum amounts of financial responsibility relating to insurance requirements and selfinsurance authorization. Therefore, the division concludes that the requirements of this rule are not preempted, because the requirements under this rule are necessary, in the exercise of the division’s powers to regulate safety and insurance of motor carriers, to properly identify and enforce the division’s requirements on motor vehicles and drivers when they are operated under certificates and permits issued by the division to persons other than the owners, to prevent the evasion of regulatory requirements through certain vehicle leasing arrangements, and to assure that the leased vehicles operated by motor carriers are safely equipped, maintained and operated, and properly insured and licensed.

2. (2) Every lease of motor vehicles to which the provisions of this rule are applicable, and the lessor and lessee under the lease, shall comply with the following requirements:

   1. (A) The lease must be reduced to writing and at least two (2) copies shall be prepared and duly executed. One (1) copy of the executed lease shall be retained by the lessee for not less than two (2) years after the expiration of the lease; the other required copy shall accompany the driver of the leased vehicle at all times while the vehicle is in operation under the lease, and shall be available for inspection by personnel of the division, the state highway patrol, and any other officials authorized to enforce the motor vehicle or transportation laws of this state;
   2. (B) Except when a vehicle is subleased by a motor carrier in compliance with subsection (3)(D) of this rule, the lessee shall be deemed the operator of the motor vehicle for the term of the lease. The terms of the lease shall provide, and the surrounding facts shall reflect, that the leased equipment is exclusively committed to the lessee’s use during the term of the lease, and that the lessee shall actually control the operation of the vehicle, including its equipment, physical condition, insurance coverage, licensing, markings, drivers, drivers’ qualifications, drivers’ hours of service, and all other related matters, to the same extent as if the lessee were the actual owner of the vehicle;
   3. (C) The lessee shall accept responsibility to the public for any injury to persons or property caused in the course of operations of the leased vehicle pursuant to the lease and during the term of the lease. If the lessee is a motor carrier authorized by this division to perform intrastate transportation, the lessee shall comply with all division requirements relating to insurance coverage under 4 CSR 265-10.030, with respect to the leased vehicle;
   4. (D) The lessee shall display appropriate markings to identify all leased equipment as operated by the lessee during the performance of the transportation. If the lessee is a motor carrier authorized by this division to perform intrastate transportation, the lessee shall comply with all division requirements relating to licensing of the leased vehicle under 4 CSR 265-10.020, and vehicle markings under 4 CSR 265-10.025;
   5. (E) The lessee shall maintain and operate leased motor vehicles in conformity with the applicable laws of this state and the rules of this division; and
   6. (F) Immediately upon the termination of the lease, and whenever a motor carrier subleases the vehicle in compliance with subsection (3)(D) of this rule, the lessee shall remove or obliterate all its distinctive markings from the vehicle, and the vehicle shall not be operated on the public highways until the lessee’s distinctive markings are removed or obliterated. If the lease is cancelled prior to the expiration date, the lessee shall immediately remove the cancelled lease from the vehicle.

3. (3) Motor carriers shall not transport passengers or property in intrastate commerce in motor vehicles not owned by them, except in compliance with the following requirements:

   1. (A) Every lease entered into by a motor carrier, and all operations under the lease, shall comply with section (2) of this rule;
   2. (B) The motor carrier shall actually control all transportation of passengers or property performed in the leased vehicle during the term of the lease. If the motor carrier does not actually control the transportation performed in the leased vehicle, then the transportation is not covered and authorized by the lessee’s operating authority. Every lessee motor carrier who knowingly or recklessly fails to control the transportation performed in the leased vehicle shall be deemed to be procuring, aiding and abetting any transportation performed in the leased vehicle during the term of the lease;
   3. (C) Motor carriers shall not lease vehicles with or without drivers to shippers or receivers of property or to passengers or chartering groups;
   4. (D) Motor carriers shall not sublease a leased vehicle, with or without driver, unless the lease expressly authorizes the lessee motor carrier to sublease the vehicle to another authorized motor carrier during the lease. Whenever a vehicle is subleased under this subsection, the sublease shall comply with this rule, except that a sublease shall not authorize further subleasing of the vehicle to any person, and while the sublease is in effect, the sublessee shall be deemed the lessee and operator of the vehicle, and shall be exclusively responsible for the operation of the vehicle as required by this rule, instead of the original lessee. One (1) copy of both the sublease and the original lease shall accompany the driver, and be available for inspection as provided in subsection (2)(A) of this rule, at all times while the vehicle is in operation under the sublease;
   5. (E) Motor carriers authorized to transport household goods may transport household goods in motor vehicles owned or leased by the carrier’s agent under an agency agreement in compliance with 4 CSR 265-10.080; and
   6. (F) This rule does not authorize the leasing of any certificate or permit or operating authority. Motor carriers shall not lease certificates or permits, or any operating authority to any person, unless the leasing is approved by order of the division as a transfer of authority under section 390.111, RSMo.

4. (4) The following requirements are applicable to intrastate transportation performed in commercial motor vehicles which are owned and operated by persons who are not authorized by the division to engage in intrastate transportation:

   1. (A) Whenever a person who is not authorized by this division to engage in intrastate transportation leases its equipment, with or without driver, to an authorized intrastate motor carrier, the lease and all operations under it shall comply with this subsection and sections (2) and (3) of this rule. The lessor shall submit the actual control of all transportation provided in the leased vehicle to the lessee. If the lease and all operations of the motor vehicle during the term of the lease meet these requirements, then those vehicle operations shall be covered and authorized by the lessee’s intrastate certificate or permit to the same extent as if the vehicle were owned by the lessee. If the lease or any motor vehicle operations during the term of the lease do not actually comply with all of these requirements, then those operations are not covered and not authorized by the lessee’s certificate or permit; and
   2. (B) If a person who is not authorized by this division to engage in intrastate transportation leases its own motor vehicle and driver to a shipper, receiver, passenger or chartering group, the lessor’s intrastate transportation under that lease shall be presumed to result in private carriage by the lessee if the lease, and all operations under it, comply with section (2) of this rule and the term of the lease is not less than thirty (30) consecutive days. If a lease or other arrangement between a shipper, receiver, passenger or chartering group and the owner of a motor vehicle who is not authorized by this division to engage in intrastate transportation does not comply with these requirements, then the lessor’s motor vehicle operations shall not be presumed to be private carriage by the lessee.

AUTHORITY: section 622.027, RSMo 1994.* Emergency rule filed June 14, 1985, effective July 1, 1985, expired Oct. 28, 1985. Original rule filed Aug. 1, 1985, effective Oct. 29, 1985. Amended: Filed May 17, 1989, effective Sept. 11, 1989. Amended: Filed Nov. 4, 1992, effective July 8, 1993. Emergency amendment filed Dec. 1, 1994, terminated Dec. 19, 1994. Emergency amendment filed Dec. 20, 1994, effective Jan. 1, 1995, expired April 30, 1995. Emergency amendment filed April 20, 1995, effective May 1, 1995, expired Aug. 28, 1995. Emergency amendment filed Aug. 18, 1995, effective Aug. 29, 1995, expired Feb. 24, 1996. Amended: Filed Aug. 3, 1995, effective Feb. 25, 1996. Emergency amendment filed Aug. 19, 1996, effective Aug. 29, 1996, expired Feb. 24, 1997. 4 CSR 265-10

*Original authority: 622.027, RSMo 1985, amended 1993, 1995.