UNDERSTANDING THE FMCSA “COMMERCIAL ZONE” EXEMPTION

As a general rule, motor carriers engaging in the interstate transportation of passengers or federally regulated commodities for direct or indirect compensation (i.e., for-hire) are required to obtain operating authority (designated by an “MC” number) from the Federal Motor Carrier Safety Administration (FMCSA). Certain types of transportation, however, are exempt from this requirement, including transportation within a “commercial zone.”

Under the commercial zone exemption, “transportation provided entirely in a municipality, in contiguous municipalities, or in a zone that is adjacent to, and commercially a part of, the municipality or municipalities” is exempt from the operating authority requirement (and its associated financial responsibility requirements), so long as (1) the transportation is not part of “a continuous carriage or shipment to or from a place outside the municipality, municipalities, or zone,” and (2) the carrier provides the transportation in compliance with the laws of each state in which the transportation takes place. See 49 U.S.C. § 13506(b)(1). The commercial zone exemption does not exempt the carrier from federal commercial motor vehicle safety regulations.

There are many places across the nation like the New York and Washington, DC metropolitan areas and the twin cities of Kansas City, MO and Kansas City, KS and Minneapolis and St. Paul, MN, where state lines happen to run through a single metropolitan area or area of economic activity. The commercial zone exception excludes certain of these areas from the FMCSA’s operating authority requirement, either by specific definition in the agency’s regulations or based upon case-by-case application of a population and mileage-based formula.

Under the regulations, commercial zones are specifically defined for the following areas: Albany, NY; Beaumont, TX; Charleston, SC; Charleston, WV; Lake Charles, LA; Pittsburgh, PA; Pueblo, CO; Ravenswood, WV; Seattle, WA; Washington, DC; certain twin cities; certain consolidated governments; Lexington-Fayette Urban County, KY; Syracuse, NY; Spokane, WA; Tacoma, WA; Chicago, IL; New York, NY; and Cameron, Hidalgo, Starr, and Willacy Counties, TX. Under the population-mileage formula, set forth at 49 C.F.R. § 372.241 of the agency’s regulations, unless otherwise specifically defined, the commercial zone of a municipality generally consists of: (1) the municipality itself (i.e., the “base municipality”; (2) all contiguous municipalities (i.e., municipalities having at some point a common municipal or corporate boundary with the base municipality); (3) all other municipalities and unincorporated areas that are adjacent to the base municipality, as follows:

Population of base municipality / Other areas included in commercial zone
Less than 2,500 / All unincorporated areas within 3 miles of the corporate limits of the base municipality and all of any other municipality any part of which is within 3 miles of the corporate limits of the base municipality
2,500 to 24,999 / Same as above, within 4 miles
25,000 to 99,999 / Same as above, within 6 miles
100,000 to 199,999 / Same as above, within 8 miles
200,000 to 499,999 / Same as above, within 10 miles
500,000 to 999,999 / Same as above, within 15 miles
1 million or more / Same as above, within 20 miles