Agenda Date: April 12, 2000 Item Number: Docket: TV-991559 Household Goods Carriers General -- Rulemaking Review of Commission's rules Relating to Household Goods Carriers in Chapter 480-15 of the Washington Administrative Code. Staff: Bonnie Allen, Program Coordinator Paul Curl, Deputy Director Regulatory Services Gene Eckhardt, Assistant Director of Transportation and Water M. Carlene Hughes, Program Coordinator Marjorie Schaer, Review Judge Ann Rendahl, Assistant Attorney General Recommendation: Direct the Secretary to file a Notice of Proposed Rulemaking (CR 102) in Docket No. TV-991559 with the Office of the Code Reviser, in order to revise Chapter 480-15 WAC, Rules Relating to Motor Carriers of Household Goods. Background/Process The Commission adopted new rules for the household goods moving industry that became effective January 15, 1999. The new rules eased entry requirements, eliminated barriers to entry and expanded areas of operations, allowed pricing flexibility, strengthened consumer protection elements, and clarified Commission policy regarding the definition of household goods. On October 28, 1999, the Commission issued a Pre-Proposal Notice of Inquiry under Docket No. TV-991559 to gather information regarding the effect of the new household goods rules and to determine if changes, additions, or deletions were appropriate to ensure that the rules were effective in serving their intended purpose. On October 29, 1999, a notice of opportunity to file comments and notice of workshop in Docket No. TV-991559 was sent to household goods carriers and other interested persons. On December 9, 1999, the Commission held a stakeholder workshop to discuss written comments received, to gather additional comments, and to discuss suggested changes that would improve the rules and their operation. Representatives of the household goods moving industry, self-storage industry, independent movers, and Office of State Procurement attended the workshop. Following the workshop, staff received additional written comments and began drafting and rewriting rules. Draft proposed rules were sent to stakeholders on March 10, 2000, with comments due by March 24, 2000. The Commission received three comments addressing the definition of household goods. David Wiley, representing Door-to-Door Storage, Inc., and Shurgard Storage To Go, Inc., acknowledged that the draft rule narrows the scope of the existing exclusion, but accepts the proposed rule as it continues to maintain the Commission's historical position on which these businesses were launched. Todd Glass, representing Public Storage Pickup and Delivery, L.P. advised that the term "Public Storage" was a registered trademark and suggested that language in the proposed rule refer to a "self-storage" facility rather than a "public storage" facility to avoid any confusion. Staff agrees with the suggestion and the proposed rule reflects that language. Jim Tutton, Vice-President of the Washington Trucking Associations, filed comments on behalf of the Washington Movers Conference (WMC). They acknowledge that the proposals in the draft will improve the rules, but the WMC would like to see a definition of "self-storage container. " If left undefined the WMC believes it is possible that a parked truck or trailer could be interpreted as a "self-storage container." Staff agrees that a motor vehicle is not a self-storage container and the definition of a motor vehicle in the proposed rule reflects that language. Proposed Rules Staff proposes the following changes to Chapter 480-15 WAC: (1) Revise the statement of purpose and application in WAC 480-15-010 to clarify that household goods carriers must comply with other state laws, including tax and licensing laws. (2) Revise the definition of household goods in WAC 480-15-020(14) to limit the transportation of self-storage containers between self-storage facilities and their customers, in conjunction with a self-storage agreement. (3) Revise the definition of a motor vehicle in WAC 480-15-020(21) to state that a motor vehicle is not a self-storage container. (4) Eliminate WAC 480-15-030, Waiver of Rules, and replace it with a new rule and alternate language that more clearly describes the filing and review process for seeking rule exemptions. (5) Clarify the exceptions to the permanent authority application process in WAC 480-15-260 and include additional circumstances under which exceptions may be allowed. (6) Revise the rate band in WAC 480-15-490 to establish a new maximum rate, annual review and adjustment of the maximum rate according to an index for the next five years, and a new fixed minimum rate established at a percentage of the new maximum rate. (7) Revise the term A commercial vehicle @ in WAC 480-15-560 and WAC 480-15- 570 to ensure that federal safety regulations are applied consistently to intrastate and interstate vehicles and drivers. Eliminate reference to compliance with hazardous materials regulations that do not apply to household goods carriers. (8) Replace the "text" of the Commission's consumer brochure in WAC 480-15- 620 with a description of the brochure's contents. (9) Reduce the record retention period for estimates provided to customers in WAC 480-15-650 and include additional disclosure regarding rates on supplemental estimates. (10) Revise WAC 480-15-660 to clarify when a company must provide a supplemental estimate to a customer and the rate that may be used on the supplemental estimate. (11) Include a provision in WAC 480-15-740 to allow companies an alternative to recording on the bill of lading the details for each person on a job. Staff recommends that the Commission direct the Secretary to file a Notice of Proposed Rulemaking (CR-102) in Docket No. TV-991559 with the Office of the Code Reviser, in order to revise Chapter 480-15 WAC as reflected in the attached proposed rules. Attachment Review of Rules Relating to Household Goods Carriers Docket No. TV-991559 Proposed Rules Revision of Chapter 480-15 WAC April 12, 2000 WAC 480-15-010 Purpose and application. (1) The legislature has declared that operating as a motor carrier of freight, including household goods, for compensation over the highways of this state is a business affected with a public interest and should be regulated. The purpose of these rules is to carry out the policies set forth in RCW 81.80.020 as they apply to household goods carriers, by establishing standards for public safety, fair competitive practices, just and reasonable charges, nondiscriminatory application of rates, adequate and dependable service, consumer protection, and compliance with statutes, rules and commission orders. (2) This chapter applies to all intrastate household goods carriers. (3) Nothing in this chapter relieves any household goods carrier from its duties and obligations under the laws of the state of Washington including, but not limited to, public utility, labor, employment, and other taxes, and business and vehicle licensing requirements. WAC 480-15-020 Definitions. For the purpose of this chapter, the words, terms, and phrases in this section have the following meaning: (1) "Accessorial services" means any services provided by a household goods carrier that supplement, or are secondary to, the transportation of household goods, including, but not limited to, packing and unpacking, wrapping or protecting a portion of the shipment, and providing special handling of household goods. (2) "Agent" means a permitted carrier, who, under the provisions of a formal written agreement, performs services on behalf of another permitted carrier. (3) "Application docket" means a commission publication listing applications requesting operating authority, and commission action taken on applications for temporary authority. (4) "Authority" means the rights granted to a common carrier to transport household goods. (5) "Cancellation" means an act by the commission to terminate a household goods carrier's authority. (6) "Commission" means the Washington utilities and transportation commission. (7) "Common carrier" means any person who undertakes to transport property, including household goods, for the general public by motor vehicle, for compensation over the public highways. This term also includes transportation under special and individual contracts or agreements. (8) "Constructive weight" means a weight based on a formula of seven pounds per cubic foot of properly loaded van space occupied by the shipper's goods. (9) "Consumer" means a person or entity that hires a household goods carrier. (10) "Customer" means a person or entity that hires a household goods carrier. (11) "Exempt carrier" means any person operating a motor vehicle exempt from certain provisions of Title 81 RCW pursuant to RCW 81.80.040. (12) "Filing" means any application, petition, tariff proposal, annual report, comment, complaint, pleading, or other document submitted to the commission. (13) "Household goods carrier" means a common carrier transporting household goods within the state of Washington. (14) "Household goods" when the term is used in connection with transportation, means personal effects and property used or to be used in a residence when it is a part of the equipment or supply of such residence, and is transported between residences or between a residence and a storage facility, with the intent to later transport to a residence. This term excludes transportation of customer packed and sealed self-storage type containers that are delivered to and from a self-storage facility, when that transportation is provided in conjunction with a self-storage agreement executed in good faith, and when no accessorial services are provided by a motor carrier in connection with the storage or the transportation of the container. (15) "I" means a household goods carrier or shipper, depending upon the context of the rule. (16) "Loaded weight" means the weight of a motor vehicle obtained when: (a) The shipper's goods are loaded into the vehicle; (b) The vehicle's fuel tank is full; (c) All pads, chains, dollies, hand trucks, and other equipment needed in the transportation of the shipment are on board the vehicle; (d) The vehicle's crew is not on board the vehicle. (17) "Local move" means all moves taking place within the limits of a city or town or moves specifically defined as local in the commission tariff. (18) "Long distance move" means any move not meeting the definition of a local move. (19) "May" means an option. You may do something but it is not a requirement. (20) "Motor carrier" means "common carrier," "exempt carrier," and "private carrier," as defined in this chapter. (21) "Motor vehicle" means any vehicle, machine, tractor, trailer, or semi-trailer, propelled or drawn by mechanical power, or any combination of such vehicles, used upon the highways in the transportation of property, including household goods. A motor vehicle is not a self-storage container. (22) "Must" means a legal obligation. You are required to do something. (23) "Net weight" means the weight of the goods shipped by the consumer. It is determined by subtracting the tare weight of a motor vehicle from the loaded weight. (24) "Permit" means a document issued by the commission describing the authority granted to a household goods carrier under the provisions of chapter 81.80 RCW, as amended. A permit may be temporary or permanent in duration, and may allow a household goods carrier to transport household goods throughout the state of Washington or limit the household goods carrier to transportation of household goods in designated areas of the state. (25) "Person" includes any individual, firm, corporation, company, or partnership. (26) "Private carrier" means persons who transport their own household goods, household goods being bought or sold by them in good faith, or transport household goods purely as an incidental adjunct to some established business owned or operated in good faith. (27) "Registered carriers" means motor carriers operating in interstate or foreign commerce under authority issued by the Interstate Commerce Commission, the U.S. Department of Transportation, or a successor agency. (28) "Registered exempt carriers" means motor carriers operating in interstate or foreign commerce under the exemptions of the Federal Motor Carrier Act without interstate authority issued by the Interstate Commerce Commission, the U.S. Department of Transportation, or a successor agency. (29) "Shipper" means a person or entity that hires a household goods carrier. (30) "Small business" means any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, that has the purpose of making a profit, and that has fifty or fewer employees. (31) "State" means the state of Washington. (32) "Suspension" means an act by the commission to temporarily withhold a household goods carrier's authority. (33) "Tare weight" means the weight of an empty motor vehicle obtained when: (a) The vehicle's fuel tank is full; (b) All pads, chains, dollies, hand trucks, and other equipment needed in the transportation of the shipment are on board the vehicle; and (c) The crew is not on board the vehicle. (34) "Tariff" means a publication containing the rates and charges that must be assessed on shipments of household goods and the rules that govern how rates and charges are assessed. (35) "Transportation of household goods" means the for hire movement of household goods by motor vehicle over the public highways of the state. This includes providing estimates, arranging for receipt, delivery, storage in transit, handling, and providing any accessorial services in connection with that movement. (36) "Us" means the Washington utilities and transportation commission. (37) "We" means the Washington utilities and transportation commission. (38) "You" means a household goods carrier, shipper, insurance company, or other person or entity, depending on the context of the rule. WAC 480-15-030 Waiver of rules (1) We may grant a waiver of any rule in this chapter, when doing so is consistent with the public interest, the purposes underlying regulation, and sound public policy, and is consistent with applicable statutes. (2) To request a rule waiver, a person must file with the commission a written request identifying the rule for which a waiver is sought, and giving a full explanation of the reason(s) the waiver is requested. The commission will notify you in writing when your request is granted or denied. WAC 480-15-xxx Exemptions from rules. (1) The commission may grant an exemption of any rule in this chapter when doing so is consistent with the public interest, the purposes underlying regulation, and applicable statutes. (2) To request a rule exemption, a company must file with the commission a written request identifying the rule for which an exemption is sought and giving a full explanation of the reason the exemption is requested. (3) The commission will assign the request a docket number, if needed, and schedule the request for consideration at one of its regularly scheduled open meetings or, if appropriate under chapter 34.05 RCW, in an adjudication. The commission will notify the company requesting the exemption, and other interested persons, of the date the commission will consider the request. (4) The commission will issue an order granting or denying the request or setting it for hearing, pursuant to chapter 480-09 WAC. WAC 480-15-260 Are there exceptions to the application process? (1) We will grant an application for permanent authority without temporary permit operations, public notice, or comment if: (1) T the applicant is fit, willing, and able to provide service; and (2) T the application is filed to transfer or acquire control of permanent authority for the following reasons: (a) A partnership has dissolved due to the death, bankruptcy, or withdrawal of a partner, and that partner's interest is being transferred to a spouse, or one or more remaining partners or a spouse; (b) A shareholder in a corporation has died and that shareholder's interest is being transferred to a surviving spouse or one or more surviving shareholders; (c) A sole proprietor has died and the interest is being transferred as property of the estate; (d) An individual has incorporated, and the same individual remains the majority shareholder; (e) An individual has added a partner, but the same individual remains the majority partner; (f) A corporation has dissolved, and the interest is being transferred to the majority shareholder; (g) A partnership has dissolved, and the interest is being transferred to the majority partner; (h) A partnership has incorporated, and the partners are the majority shareholders; or (i) Ownership is being transferred from one corporation to another corporation when both are wholly owned by the same shareholders. (2) We will grant an application for permanent authority without temporary permit operations, after the application has been published on the application docket subject to comment for thirty days, if the applicant is fit, willing, and able to provide service and the application is filed to transfer or acquire control of permanent authority for the following reason: (a) Ownership or control of a permit is being transferred to any shareholder, partner, family member, employee, or other person familiar with the company’s operations and the household goods moving services provided; and (i) the permit has been actively used by the current owner to provide household goods moving services during the twelve month period prior to the application; and (ii) the application includes a certified statement from the applicant and the current owner explaining why the transfer of ownership or control is necessary to ensure the company’s economic viability; and (iii) the application includes a certified statement from the applicant and the current owner describing the steps taken by the parties to ensure that safe operations and continuity of service to customers is maintained. WAC 480-15-490 Tariff and rates, general. (1) What is a tariff? A tariff is a publication containing the rates and charges that household goods carriers must assess on shipments of household goods, including rules that govern how rates and charges are assessed. (2) How are tariff rates and charges established? (a) Pursuant to RCW 81.80.130 and 81.80.150, the commission publishes tariffs to be used by all household goods carriers, or allows household goods carriers to file individual tariffs if the commission finds it is impractical to publish tariffs for certain commodities or services. The commission determines the rates and charges contained in the tariffs by commission order following notice and hearing. Under RCW 81.80.130, the commission must set fair, just, reasonable, and sufficient rates and charges. We will do this by setting minimum and maximum rates. (b) Upon the effective date of this rule, and continuing until such time as the commission, after notice and hearing, determines a different rate level, household goods carriers may charge no more than fifteen percent above the current tariff rates and charges and no less than thirty-five percent below the current tariff rates and charges contained in the commission’s household goods tariff on the effective date of these rules must assess rates and charges within a band. (i) The maximum rates and charges must be no more than twenty percent above the rates and charges in effect on February 1, 2000. (ii) The maximum rates and charges established in paragraph (i) above will be adjusted each June 1, through 2005, by an index calculated using the first quarter Implicit Price Deflator (IPD) of the Gross Domestic Product as follows: Index for Current Year = IPD for Previous Year First Quarter / IPD for Current Year First Quarter Example: Using the following data: IPD for Previous Year First Quarter 102.3 IPD for Current Year First Quarter 103.83 Index for Current Year is calculated as follows: IPD for Current Year First Quarter 103.83 Divided by IPD for Previous Year First Quarter 102.35 Equals Index for Current Year = 1.0145 Maximum Rate or Charge is calculated as follows: Maximum Rate for Previous Year $ 100.0 Multiplied by Index for Current Year x 1.0145 Equals the Maximum Rate for Current Year =$ 101.45 Round the maximum rate to the next $.01, with $.005 and greater rounded up and less than $.005 rounded down. Mileage rates are rounded to the next $.0001. (iii) The minimum rate or charge is fixed at no less than forty percent below the maximum rate or charge established in paragraph (i) above. (3) Who must have tariffs? Each person holding household goods permit authority must purchase and display at least one copy of the current tariff, and pay applicable tariff maintenance fees. Any interested person may purchase a copy by paying the applicable fees in advance. (4) Where must I display my tariffs? You must display a current copy of the tariff in your main office, and in each billing office. (5) Who must charge rates contained in the tariff? All household goods carriers must charge the rates and charges, and comply with the rules contained, in the tariff unless we have approved, in writing, deviations from the tariff. (6) Is the tariff the only publication I need to use to determine rates? We may adopt other publications that will be used to assess rates. If we do, we will notify tariff subscribers of the change. (7) Where may the public view tariffs? Tariffs are public documents and you must make them available for the public by posting copies at your main office and any billing office. Tariffs are also available for review at our headquarters office. (8) How much does a tariff cost? The cost of tariffs may change periodically depending on our costs for compiling, printing, distributing, and maintaining them. To find out the current cost, you may contact the commission as described in WAC 480-15-060. (9) Are copies of current or expired tariff pages available? We will supply you with current or expired single tariff pages upon request. Copies of entire expired tariffs, or entire tariffs applicable on a specific date in the past, generally are not available. WAC 480-15-560 Equipment safety requirements. (1) What is the commission's equipment safety policy? All motor vehicles operated under the provisions of this chapter must be at all times: (a) Maintained in a safe and sanitary condition; (b) Free of defects likely to result in an accident or breakdown; and (c) Made available for inspection by commission representatives. All motor vehicles having safety defects likely to result in an accident or breakdown will be placed out-of-service and taken off the road until such time as all out-of-service defects have been repaired and the motor vehicle is safe to operate. (2) How does the commission enforce this policy? Commission representatives conduct inspections of motor vehicles and safety operations. These representatives may place out-of-service any motor vehicle having a defect defined in the North American Uniform Out-Of-Service Criteria. No motor vehicle which has been placed out-of-service may be operated until all out-of-service defects are repaired and the motor vehicle is safe to operate. (3) How must I identify my motor vehicles? You must display your permit name and number, as registered with the commission, on both the driver and passenger doors of all power units. (a) All markings on the power unit must be: (i) Clearly legible; (ii) No less than three inches high; (iii) In a color that contrasts with the background color; and (iv) Permanent. Exception: You may use temporary markings on vehicles you are operating under lease. (b) If you have both intrastate and interstate authority, you must display either your commission permit number, federal permit number, or both, on the power unit. (4) What vehicle safety laws and rules must I follow? (a) You must comply with: (i) All state and local motor vehicle safety laws and rules including, but not limited to, those contained in this chapter; (ii) The following parts of Title 49 of the Code of Federal Regulations (49 CFR), as adopted by reference in this chapter: (A) 49 CFR Part 390: Safety Regulations, General; except: (i) The terms "exempt motor carrier," "motor carrier," "motor vehicle," and "private carrier" have the meanings assigned to them in this chapter; (ii) The term "commercial motor vehicle" means any motor vehicle used by a household goods carrier to transport household goods; if either the vehicle has a gross vehicle weight rating or gross combination weight rating of ten thousand and one pounds or more; or if the gross vehicle weight or gross combination weight is ten thousand and one pounds or more; (iii) Whenever the term "director" is used, it shall mean the commission. (B) 49 CFR Part 392: Driving of Motor Vehicles; (C) 49 CFR Part 393: Parts and Accessories Necessary for Safe Operation; (D) 49 CFR Part 396: Inspection, Repair, and Maintenance; and (E) 49 CFR Part 397: Transportation of Hazardous Materials; Driving and Parking Rules. (b) If you fail to comply with these laws and rules, we may issue a citation to you, place your vehicle out-of-service, and/or initiate an administrative proceeding against you. See WAC 480-15-130(3). (5) Am I required to equip my motor vehicles with anti-spray devices (mud flaps)? (a) Yes, all motor vehicles must be equipped with mud flaps which effectively reduce the spray or splash of water from the road. (b) Mud flaps must be as wide as the tires on which they are mounted, and must extend from the top of the tires down to at least the center of the axle. WAC 480-15-570 Driver safety requirements. (1) What is the commission's policy for driver safety requirements? No household goods carrier shall employ or allow any driver to operate a motor vehicle who fails to meet minimum criteria related to: (a) Driver's licensing; (b) Background and character; (c) Physical qualifications; (d) Hours of service; and (e) Controlled substances and alcohol use testing. (2) How does the commission enforce those requirements? Commission representatives inspect driver and company safety records and documents to determine compliance with these rules. Additionally, the representatives may contact drivers during the course of investigations, inspections, or other routine commission business. The representatives may order out-of-service any driver meeting the conditions defined in the North American Uniform Out-Of-Service Criteria. No driver who has been placed out-of-service may operate a commercial motor vehicle until all conditions which caused the driver to be placed out-of-service are corrected. (3) With which driver qualification laws and regulations must I comply? (a) You must comply with: (i) All state and local laws and rules governing driver safety, including, but not limited to, the rules in this chapter; (ii) The following parts of Title 49 of the Code of Federal Regulations (49 CFR), as adopted by reference in this chapter: (A) 49 CFR Part 390: Safety Regulations, General; except: (i) The terms "exempt motor carrier," "motor carrier," "motor vehicle," and "private carrier" have the meanings assigned to them in this chapter; (ii) The term "commercial motor vehicle" means any motor vehicle used by a household goods carrier to transport household goods; if either the vehicle has a gross vehicle weight rating or gross combination weight rating of ten thousand and one pounds or more; or if the gross vehicle weight or gross combination weight is ten thousand and one pounds or more; (iii) Whenever the term "director" is used, it shall mean the commission. (B) 49 CFR Part 382: Controlled Substance and Alcohol Use and Testing; (C) 49 CFR Part 383: Commercial Driver's License Standards; Requirements and Penalties; (D) 49 CFR Part 391: Qualification of Drivers; and (E) 49 CFR Part 395: Hours of Service of Drivers. (b) If you, or your driver, fail to comply with any driver safety law or rule, we may issue a citation to you or your driver, place your driver out-of-service, and/or initiate an administrative proceeding against you. See WAC 480-15-130(3). (4) Are there any exceptions? Yes, the following exceptions apply: (a) If your operations are exclusively in intrastate commerce, you are not subject to the following provisions: (i) 49 CFR Part 391.11(b)(1): Minimum age requirements. The minimum age for drivers of motor carriers operating solely intrastate is eighteen years of age rather than the twenty-one years of age required to operate in interstate commerce. (ii) 49 CFR Part 391.49: Waiver of certain physical defects. This part does not apply if the driver has obtained from the Washington department of licensing a driver's license with endorsements and/or restrictions allowing operation of the motor vehicle they are driving. (b) If you are a single vehicle owner-operator and your operations are solely intrastate, you are not subject to the following provisions: (i) 49 CFR Part 391.21: Application for Employment; (ii) 49 CFR Part 391.23: Investigation and Inquiries; (iii) 49 CFR Part 391.25: Annual Review of Driving Record; (iv) 49 CFR Part 391.27: Record of Violations; (v) 49 CFR Part 391.31: Road Test; and (vi) 49 CFR Part 391.33: Equivalent of Road Test. WAC 480-15-620 What information must I provide to each shipper? (1) You must give each shipper a copy of the commission brochure, "Your Rights and Responsibilities as a Moving Company Customer": (a) At the time you issue a written nonbinding estimate; (b) At the time you issue a written binding estimate; (c) If you issue neither a written estimate or a written nonbinding estimate, prior to loading the shipment; or (d) Upon request, by the shipper. (2) The brochure is available from the commission and contains consumer information about selecting a moving company, estimates, rates and tariff charges, payment terms, change orders, supplemental estimates, preparing articles for shipment, valuation protection for loss and damage of goods, expedited service, small shipments, temporary storage, bill of lading contracts, loss and damage claims, informal complaints, and formal complaints. the text shown below. The commission may choose to: Add information, present information in a different