49 U.S.C. § 31138 — Minimum financial responsibility for transporting passengers

submitted 32 years ago by Pub. L. 103-272 to r/title-49-TRANSPORTATION · 896 words · no verdicts yet

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Companies that carry passengers for pay across state lines must carry at least $5 million in liability insurance for large buses, or $1.5 million for smaller ones. Violators face civil penalties up to $10,000 per day. School buses, taxis, and some other vehicles are exempt.

(a) General Requirement. The Secretary of Transportation must require minimum insurance-style financial responsibility, covering public liability and property damage, for companies that transport passengers for pay by motor vehicle between states, or through another state, or to a place outside the U.S. The Secretary can also require this for passenger transportation that is commercial but not paid, under the same kind of interstate routes. (b) Minimum Amounts. The required coverage depends on the vehicle's seating capacity: at least $5,000,000 for a vehicle seating 16 or more passengers, and at least $1,500,000 for one seating 15 or fewer. (c) Evidence of Financial Responsibility. Coverage can be shown through insurance, including high self-retention plans, a guarantee, or a surety bond from a company licensed to do business in the U.S., as long as the Secretary accepts it. Someone based in a country next to the U.S. and providing this transportation must carry proof of coverage in the vehicle; if they do not have it, the Secretary of Transportation and the Secretary of the Treasury must refuse to let the vehicle enter the country. A carrier can combine coverage from more than one source, as long as the total meets the minimum. The Secretary can also require someone who is not a "motor carrier" under section 13102, but who transports passengers, to file proof of coverage in an amount that is the greater of the federal minimum or whatever amount that state requires — but the coverage only needs to cover final judgments for injury, death, or property damage from negligent operation, maintenance, or use of the vehicle. (d) Civil Penalty. If, after notice and a hearing opportunity, the Secretary finds someone, other than an innocent employee, knowingly violated this section or its regulations, that person owes the government a civil penalty of up to $10,000 per violation, with each day of a continuing violation counting separately. The Secretary imposes the penalty by written notice, and must weigh the nature and seriousness of the violation, the violator's degree of fault, any past violations, ability to pay, effect on their ability to stay in business, and anything else justice requires. The Secretary can settle the penalty before sending it to the Attorney General for collection. The Attorney General must then sue in the right federal district court to collect it. The penalty can be deducted from money the government owes the person, and any amount collected goes into the Highway Trust Fund, excluding the Mass Transit Account. (e) Nonapplication. This section does not apply to a vehicle that: only carries school children and teachers to and from school; provides taxicab service, as defined in section 13102; carries no more than 15 people on a single daily round trip to and from work; or provides transit service under a federal, state, or local government agreement funded partly or fully by a grant under section 5307, 5310, or 5311 — including service designed for elderly people or people with disabilities. If that transit service area spans more than one state, though, the minimum coverage must match whichever of those states requires the most.

the actual law source: uscode.house.gov ↗public domain

(a)General Requirement.—

(1)Transportation of passengers for compensation.—

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—

(A)

a place in another State;

(B)

another place in the same State through a place outside of that State; or

(C)

a place outside the United States.

(2)Transportation of passengers not for compensation.—

The Secretary may 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 commercial purposes, but not for compensation, by motor vehicle in the United States between a place in a State and—

(A)

a place in another State;

(B)

another place in the same State through a place outside of that State; or

(C)

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.

(4)Other persons.—

The Secretary may require a person, other than a motor carrier (as defined in section 13102), transporting passengers by motor vehicle to file with the Secretary the evidence of financial responsibility specified in subsection (c)(1) in an amount not less than the greater of the amount required by subsection (b)(1) or the amount required for such person to transport passengers under the laws of the State or States in which the person is operating; except that the amount of the financial responsibility must be sufficient to pay not more than the amount of the financial responsibility for each final judgment against the person for bodily injury to, or death of, an individual resulting from the negligent operation, maintenance, or use of the motor vehicle, or for loss or damage to property, or both.

(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 Highway Trust Fund (other than the Mass Transit Account).

(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 (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.

Source credit: (Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1005; Pub. L. 104–88, title I, § 104(c), (d), Dec. 29, 1995, 109 Stat. 919; Pub. L. 107–298, § 3(b)(2), Nov. 26, 2002, 116 Stat. 2343; Pub. L. 109–59, title IV, §§ 4120(a), 4121, Aug. 10, 2005, 119 Stat. 1733, 1734; Pub. L. 110–244, title III, § 305(a), June 6, 2008, 122 Stat. 1619.)

history & why it existsrecord from the source credit

1994Enacted · Pub. L. 103-272 · 108 Stat. 1005
1995Amended · Pub. L. 104-88 · 109 Stat. 919
2002Amended · Pub. L. 107-298 · 116 Stat. 2343
2005Amended · Pub. L. 109-59 · 119 Stat. 1733, 1734
2008Amended · Pub. L. 110-244 · 122 Stat. 1619

A history note hasn’t been published yet. The record shows enactment by Pub. L. 103-272 on 1994-07-05.

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