§ 31.32. Equipment leasing.
(a) Applicability. This section applies to the leasing of equipment by motor carriers engaged in transporting property and household goods by motor vehicle between points in this Commonwealth.
(b) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:
Authorized employee or agent—A person authorized to act for and on behalf of a motor carrier or owner of equipment and subject to the supervision, direction and control of the motor carrier in whose service he is acting.
Equipment—A motor vehicle, straight truck, tractor, semitrailer, full trailer, combination tractor-and-semitrailer, combination straight truck and full trailer and other types of equipment used in the transportation of property for-hire.
Motor carrier—A person or corporation authorized to engage in the transportation of property or household goods as a common or contract carrier by motor vehicle under 66 Pa.C.S. § 1101—3315 (relating to Public Utility Code).
(c) Leasing equipment. Equipment leasing by a motor carrier must conform with the following:
(1) General. A motor vehicle may not be operated between points in this Commonwealth in intraState commerce by a motor carrier, unless the vehicle is either owned by the motor carrier or is leased to the motor carrier under the conditions in paragraphs (2)—(4).
(2) Contract requirements. A contract is subject to the following:
(i) Parties. The contract, lease or other arrangement for the use of equipment shall be between the motor carrier and the owner of equipment.
(ii) Written. The agreement must be in writing and signed by the parties thereto or their drivers, employees or agents authorized in writing.
(iii) Exclusive possession, control and responsibility.
(A) Lease. A lease shall provide for and be carried out so that the possession, control and use of the equipment is the complete and exclusive responsibility of the lessee for the full term of the lease, except during the period provided for in clause (B).
(B) Sublease. The lease agreement may contain a provision permitting the lessee to sublease equipment to other motor carriers for a period not exceeding the duration thereof, if the sublessee assumes full responsibility in the manner set forth in clause (A).
(iv) Compensation. The lease agreement must specify the amount of compensation to be paid by the lessee for the rental of the leased equipment.
(v) Duration. The lease agreement must specify the time and date or the circumstances on which the contract, lease or other arrangement begins and the time or the circumstances on which it ends.
(vi) Documentation. A lease shall be executed in triplicate. The original shall be retained by the motor carrier in whose service the equipment is to be operated, one copy shall be retained by the owner of the equipment and one copy shall be carried on the equipment specified therein during the entire period of the contract, lease or other arrangement, unless a certificate is carried on the equipment in lieu thereof, certifying that the equipment is being operated by lessee, the name of the owner, the date of the lease, contract or other arrangement, the period thereof and the location where the original of the lease, contract or other arrangement is retained by the motor carrier. The certificateholder shall retain leases for 2 years following their expiration date.
(3) Safety inspection of equipment. It is the duty of the motor carrier, before taking possession of equipment, to ensure that the equipment has a valid State inspection decal or complies with the periodic inspection requirements in § 37.204(7) (relating to adoption of portions of 49 CFR by reference), or to inspect or to have the equipment inspected by a person who is competent and qualified to make an inspection and who has been authorized by the carrier to make the inspection as a representative of the carrier, to ensure that the equipment is in a safe condition to be operated on the highways. The person making the inspection shall certify the results thereof, which certification shall be retained by the motor carrier for at least 1 year. If the inspection discloses that the equipment is not in a safe condition to be operated on the highways, possession thereof may not be taken by the motor carrier.
(d) Leasing equipment to shippers. A motor carrier is prohibited from leasing equipment with or without drivers to shippers or private carriers.
Authority The provisions of this § 31.32 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1102, 1103, 1501, 1502, 1504, 1506, 1508 and Chapters 23 and 25.
Source The provisions of this § 31.32 adopted April 11, 1939; amended through April 1, 1967; amended September 22, 1972, effective September 23, 1972, 2 Pa.B. 1773; amended February 1, 1980, effective May 2, 1980, 10 Pa.B. 464; amended May 29, 1987, effective May 30, 1987, 17 Pa.B. 2069; amended July 25, 1997, effective August 25, 1997, 27 Pa.B. 3676; amended August 4, 2006, effective August 5, 2006, 36 Pa.B. 4181. Immediately preceding text appears at serial pages (241243) to (241248).
Notes of Decisions Documentation
Taxpayer insisted that the company leased its equipment to other Public Utility Commission entities for use in public utility service, and that such leases would be found in the boxes of documents. However, the taxpayer was unable to identify which boxes, among the many piled in the back of the courtroom, contained these leases and after allowing the taxpayer time to select several boxes as possible sites for these leases and marking these boxes for identification, no leases were identified in the subsequent inventory. Therefore, the taxpayer failed to prove that the assessed equipment was leased to a Commission licensed entity. Fiore v. Commonwealth, 668 A.2d 1210 (Pa. Cmwlth. 1995).
A licensed common carrier could not enter into an agency agreement thereby making an unlicensed owner of a leased vehicle its agent in order to exercise control and management over leased vehicles, because the regulated carriers could, therefore, provide public services without the required certificates of public convenience and regulation from the Commission. McQuaide v. Pennsylvania Public Utility Commission, 629 A.2d 272, 277 (Pa. Commw. 1993).
Cross References This section cited in 52 Pa. Code § 31.42 (relating to equipment); and 52 Pa. Code § 31.63 (relating to equipment).
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