WSR 99-01-077

PERMANENT RULES

UTILITIES AND TRANSPORTATION

COMMISSION

[Docket No. TV-971477, General Order No. R-454--Filed December 15, 1998, 12:38 p.m.]

In the matter of repealing all rules in chapter 480-12 WAC except WAC 480-12-100 and 480-12-370 and adopting a new chapter 480-15 WAC, relating to motor carriers of household goods.

statutory authority: The Washington Utilities and Transportation Commission takes this action under Notice No. WSR 98-19-060, filed with the code reviser on September 16, 1998. The commission brings this proceeding pursuant to RCW 81.04.160 and 80.01.040.

statement of compliance: This proceeding complies with the Open Public Meetings Act (chapter 42.30 RCW), the Administrative Procedure Act (chapter 34.05 RCW), the State Register Act (chapter 34.08 RCW), the State Environmental Policy Act of 1971 (chapter 34.21C [43.21C] RCW), and the Regulatory Fairness Act (chapter 19.85 RCW).

date of adoption: The commission adopted these rules on December 14, 1998.

concise statement of purpose and effect of the rule: The new chapter of rules eases entry requirements, provides for rate flexibility, strengthens consumer protection and clarifies the commission's compliance policies. The rules conform with Executive Order No. 97-02, and the commission's strategic plan. The rules repealed applied to all motor carriers, including household goods carriers and brokers. New rules covering all motor carriers but household goods carriers and brokers have since been adopted in chapter 480-14 WAC. The rules are written specifically for the household goods industry and make several changes to existing rules written for a much broader group of carriers.

The rules ease entry requirements by changing the application process, and interpreting the standards of public interest and public convenience and necessity to address the concerns of consumers. The rules give carriers greater opportunities to operate in the state; they eliminate rules which require carriers to obtain specific operating authority (local cartage and commercial zones) to provide services in specific cities and metropolitan areas. These changes will allow more carriers the opportunity to provide household goods moving services, and allow carriers to expand their operations. These changes are designed to increase competition and consumer choice. Additionally, the proposed rules provide for pricing flexibility through the use of an interim rule which allows carriers to price their services within a range of the current tariff rates. This change allows service expansion in the industry, and is expected to increase consumer choice where pricing is a determining factor. The proposed rules strengthen consumer protection. They allow carriers the option to issue binding estimates, clarify credit options, cap the amount a carrier may charge above its estimate, reduce carrier complaint response time, and provide a more complete range of valuation options. The rules also clarify commission policy and authority in the areas of compliance, complaint resolution, and definition of household goods for the purposes of transportation.

reference to affected rules: This rule repeals and adopts the following sections of the Washington Administrative Code: Repeals all of chapter 480-12 WAC, except WAC 480-12-100 and 480-12-370 which pertain to brokers.

Adopts a new chapter of rules, chapter 480-15 WAC, governing motor carriers of household goods.

preproposal statement of inquiry and actions thereunder: The commission filed a Preproposal Statement of Inquiry (CR-101) on November 4, 1997, at WSR 97-22-082. The notice advised interested persons that the commission was considering entering a rule making to review all rules in chapter 480-12 WAC. The notice stated that all rules might be affected, and new rules regarding entry of household goods carriers, and protection of consumers would be considered. Further, rules would be reviewed for content and readability pursuant to Executive Order No. 97-02.

additional notice and activity pursuant to preproposal statement: The commission also informed persons of the inquiry into this matter by providing notice of the subject and the CR-101 to all persons included on the commission's list of persons requesting such information pursuant to RCW 34.05.320(3), including the transportation rule list, the household goods rule list, the transportation attorneys list, and lists in commission Dockets No. TV-971477 and TV-950239. In addition, the commission sent notice to all carriers holding households goods permit authority, to all companies subscribing to the household goods tariff, and to all companies who had been contacted in the previous two years regarding potential household goods moves made without a permit, as identified through the commission's compliance database. The commission accepted written comments regarding the CR-101 through December 5, 1997 [1998].

Pursuant to the notice, the commission hosted several meetings with stakeholders and stakeholder representatives. The commission sent a letter on January 23, with the first discussion draft of rules, inviting interested persons to the first stakeholders' meeting in Docket No. TV-971477. In addition, the commission also sent a letter to a wider range of possible interested persons including the commission's list of transportation associations, and the commission's list of those interested in agency administrative rules, transportation rules, household goods rules, common carrier rules, and transportation attorneys. The commission held a second meeting on April 14, 1998. A notice of this meeting was issued on March 31, 1998, including a second discussion draft. On May 8, 1998, staff mailed out a third discussion draft and letter inviting stakeholder representatives to attend a rule-drafting session on May 15, 1998. On May 20, 1998, staff mailed out rule discussion draft 3a and a letter inviting participants to attend another rule drafting session May 26, 1998. On June 2, 1998, staff mailed out rule discussion draft 3b and a letter to participants inviting them to attend another rule drafting session June 5, 1998. On June 25, 1998, staff held a meeting regarding possible valuation options which was attended by representatives from each group of stakeholders. Staff mailed out a letter and a fourth revised rule discussion draft on July 15, 1998, along with notice of the final stakeholder meeting held on July 29, 1998.

Through the stakeholder process, stakeholders and staff agreed to withdraw the following issues from the proposed rules. Staff originally proposed establishing a maximum tariff rate. The Washington Movers Conference explained that a minimum tariff rate was necessary to prevent predatory pricing practices. Staff agreed and the final rule reflects a minimum and maximum tariff rate. Staff proposed offering a rule that would provide consumers with the option of getting a "binding estimate or actual cost, whichever is less." The Washington Movers Conference was opposed to this option as a type of binding estimate and indicated they would consider an optional binding estimate if the "or actual cost, whichever is less" portion of the language was eliminated. The more restrictive option was eliminated from the rules. Consumer representatives proposed language that would require competing carriers to assist each other in providing binding estimates where the termination point of the move is a long distance from the bidding carrier's office. Carriers were opposed to this requirement because it could provide an unscrupulous carrier with the opportunity to take away business. This language was eliminated from the rules.

Staff and stakeholders reached agreement on the following issues: Cargo insurance, WAC 480-15-550; Valuation coverage, WAC 480-15-620; Payment options, WAC 480-15-795; and, Reduction in time to acknowledge receipt of claim or complaint, WAC 480-15-810. In reaching agreement on these issues, stakeholders representing the Washington Movers Conference, consumer interests and other carriers all provided information that was essential in drafting the final language.

notice of proposed rule making: The commission filed a notice of proposed rule making (CR-102) on September 16, 1998, at WSR 98-19-060. The commission scheduled this matter for oral comment and adoption under Notice No. WSR 98-19-060 at 9:30 a.m., Monday, November 16, 1998, in the commission's hearing room, Second Floor, Chandler Plaza Building, 1300 South Evergreen Park Drive S.W., Olympia, WA. The time of the adoption hearing was changed to 1:30 p.m. and an errata notice was sent to interested persons noting the time change. No one appeared at 9:30 a.m. on Monday, November 16, 1998, to comment on the rules. The notice provided interested persons with the opportunity to submit written comments on the proposed rules to the commission on or before October 30, 1998.

meetings or workshops; comments: The commission received oral and written comments from individual consumers, representatives of the Consumer Protection and Public Counsel Divisions of the Washington State Attorney General's Office, representatives and members of the Washington Movers Conference, representatives of the container storage and transportation industry, representatives of the Office of State Procurement for the State of Washington, representatives of the Better Business Bureau, nonpermitted carriers, representatives and members of the Washington Association of Independent Movers, and state legislators. A chart summarizing the comments and staff's response is included as Appendix A to this order.

Based on the comments received, commission staff suggested revised clarifying language that did not change the intent or ultimate effect of the proposed rule. Staff sent notice of the clarifying changes to all interested persons on October 28, 1998. This gave interested persons the opportunity to comment on the language at the November 16, 1998, adoption hearing.

rule-making hearing: The rule changes were considered for adoption, pursuant to the notice, at the commission's regularly scheduled open public meeting on November 16, 1998, before Chairwoman Anne Levinson and Commissioner William R. Gillis. The commission heard oral comments from Kim Dobyns and Gene Eckhardt representing commission staff; Jeffrey Goltz and Ann Rendahl representing the Utilities and Transportation Division of the Office of the Attorney General; Karen Bernd representing Bernd Moving Systems; Doug Bernd, President of the Washington Movers Conference; John Woodring, J. Lawrence Coniff, and Jim Tutton representing the Washington Movers Conference; Rick Smith representing Corporate Moving Systems; Brian McCulloch representing the Association of Independent Movers; Robert Manifold representing the Public Counsel and Consumer Protection Divisions of the Office of the Attorney General; Rob Outcalt representing Door-to-Door Storage; and Chris McKay representing Shurgard Storage-To-Go. Some commenters supported staff's proposed rules and some commenters repeated concerns that were provided in their written comments.

suggestions for change that are rejected: The commission believes the adopted rules represent a good balance between consumer protection and regulatory requirements, and that all participants worked toward achieving consensus. However, there are some areas where participants and commission staff did not reach agreement. A summary of those areas follow:

Statutory authority issues regarding RCW 81.80.020:

Commenters assert the proposed rules represent policy changes that are not consistent with RCW 81.80.020. Commenters claim that the commission staff cannot use the commission's strategic plan as a basis for changing commission policy because it is in conflict with the statute. They claim the types of entry changes staff proposes in the rule making can be accomplished only through changes in statutes. The commission disagrees. The rules are consistent with the intent of the legislature and are within the commission's statutory authority.

WAC 480-15-280 When must I apply for temporary authority? and,

WAC 480-15-300 What conditions may be attached to my temporary authority?

Commenters first claim that the current rule provides that the commission must hold a hearing, make findings, and enter an order on every protested application for a temporary permit. They then posit that this provision is eliminated, and that the elimination is not consistent with RCW 81.80.170 which states: The commission may issue temporary permits to temporary "common carriers" or "contract carriers" for a period not to exceed one hundred eighty days, but only after it finds that the issuance of such temporary permits is consistent with the public interest. It may prescribe such special rules and regulations and impose such special terms and conditions with reference thereto as in its judgement are reasonable and necessary in carrying out the provisions of this chapter.

Commenters claim that issuing temporary permits prior to holding a hearing on protested applications does not allow the commission to determine fitness or public interest.

The commission can and has determined fitness and public interest for temporary permits without holding a public hearing. The current rule governing issuance of a temporary permit does not provide for a hearing prior to the issuance of permits. The current rule, WAC 480-12-033(4) provides:

The commission will publish notice of the issuance of temporary authority under this section in its weekly application docket.

Any interested carrier may, within ten days after the publication, file a protest to the grant of authority.

The proposed rules do not change existing processes for protesting temporary authority. New section WAC 480-15-310 states:

(1) "We publish an application docket listing temporary authority we have granted or denied. We mail the docket to each applicant and, upon written request, to any person interested in application proceedings." and,

(2) "Anyone having an interest in an application appearing on the docket may file written comments within ten days following publication."

The proposed rules do provide that the commission will issue an order making findings that issuance of a permit is consistent with the public interest, prior to granting temporary authority. The proposed rules clearly identify what factors the commission will consider when determining the public interest, as well as fitness, prior to issuing a temporary permit. New section WAC 480-15-280 states:

(2) We will grant or deny an application for temporary authority after we have conducted a complete review of your application, any supporting statements, reports or other information necessary to determine your fitness, and determine whether granting the application is in the public interest.

(3) When determining if an applicant is fit, willing and able to provide the proposed service we will consider any information provided by the applicant and other members of the public regarding:

(a) The applicant's experience in the industry; knowledge of safety regulations; financial resources and equipment; compliance with tax, labor, employment, business, and vehicle licensing laws and rules; and

(b) Whether the applicant has been cited for violation of state law or commission rules, and has been convicted of a Class A or Class B felony, or has previously been denied authority on the basis of fitness; or has had permanent authority canceled.

(4) When determining if the proposed service is in the public interest, we will consider any information provided by the applicant, shippers and other members of the public supporting the proposed service, and whether granting the temporary authority will:

(a) Enhance choices available to consumers, promote a viable yet competitive household goods industry, or fill an unmet need for service; and

(b) Allow us to more efficiently regulate the household goods industry, and provide increased consumer protection through regulation.

The new rules allow any interested person to provide comment to the commission about the grant of temporary authority, and to provide comment on a pending application for permanent authority. The rules allow anyone, including existing carriers, an opportunity to provide information to the commission which will be considered when determining whether to grant or deny an application for permanent authority. WAC 480-15-190 Where may I operate with a household goods permit?

This rule grants authority to operate throughout the state of Washington. It also allows household goods carriers the option to operate in only a certain county or counties. The commission may also restrict a carrier's operations to a certain county or counties for cause. "Local cartage" and "commercial zone" authority is no longer required to operate within metropolitan areas of the state or within certain cities.

Commenters argue that eliminating local cartage area limitations is not in the public interest, and will create problems for consumers. Their specific example is: If a consumer in Tacoma requests moving service from a carrier in Lynnwood and the consumer does not ask for an estimate, the consumer must, under the existing tariff, pay for drive time from Lynnwood to Tacoma and return. Commenters believe the additional drive time charge would take unfair advantage of the consumer.

The commission disagrees. The proposed rules provide consumers the option of paying more for a service when time is the primary consideration rather than cost. Using the same scenario, under existing rules, only those with local cartage authority in Tacoma are able to provide service to the consumer. If the existing permitted carriers in Tacoma are unable to meet the consumer's time requirements, the consumer must wait until a carrier has an opening in its schedule. Such a situation creates an incentive for consumers to use nonpermitted carriers. A consumer may be willing to pay more in order to meet a critical time requirement. Otherwise, we expect a consumer to check for more than one price quotation, and to selfprotect by hiring the carrier that does not have the extra charge for drive time included in its estimate (unless its estimate is still lower). It is in the public interest to eliminate restrictions that limit consumer choice, and make enforcement more difficult.

The commission enforcement staff, under current rules, must stakeout a carrier operating out of its territory and catch it in the act in order to enforce geographic restrictions. The enforcement staff time can be better spent seeking out the kinds of violations that harm consumers.

The commission also believes many carriers will benefit from this rule. Opportunities for business growth will not be hampered by artificial boundaries. Carriers will not waste time determining whether a house on a certain street is in a city, adjoining city, or county, but will be able to serve areas that are economic to serve with their resources.

WAC 480-15-490 (2)(b) How are tariff rates and charges established?

This rule sets an interim band of rates and charges that carriers may charge consumers. The rule allows carriers to charge no more than 15% above nor less than 35% below the existing tariff rates.

Commenters object to the proposed banded rates percentages, claiming that inadequate and unrepresentative data were used to establish the rates. Further, commenters propose that a range of banded rates should be set only after a fully allocated cost study has been completed.

The commission disagrees. A staff economist and the assistant director for transportation and water analyzed this issue in a memorandum which is attached to the open meeting memorandum presented on November 16, 1998. A copy of the open meeting memorandum, and the attachments to it, are included in the rule-making file maintained by the commission. The memorandum indicates that a fully allocated cost study based on the current market environment would not be useful in setting rates for a more competitive environment. The memorandum describes the methodology used by the analysts to set the percentages above and below the current tariff rate. The staff memorandum points out that a fully allocated cost study would measure the market structure as it exists today. It would not measure the new, more open, market structure these rules are designed to promote.

The heart of the objection to this rule seems to be that the option of charging rates at a lower band limit of 35% below the existing tariff rates would result in rates that are too low, and may lead to predatory pricing. The memorandum by the economists addresses these concerns, and concludes that the cost structure of the household goods carrier industry is not conducive to predatory pricing.

In deciding this issue, the commission asked itself "What is the potential harm?" If the rate band is too narrow, an effectively competitive price would be lower than the banded rate, and consumers would be harmed. A high band and open entry would encourage uneconomic entry. If the band is too wide, the commenters claim that predatory pricing may occur. If true, that could harm carriers. However, based on its history of regulating this industry, and upon information received from the industry, the commission believes the cost structure in this industry has a wide range of variable costs. The variable cost factor, in addition to easing entry, will make it difficult for any carrier to practice predatory pricing.

In reality it would be irrational for a firm to attempt to engage in predatory pricing, as it would hurt the firm's short-term profitability without improving its long-term profitability. The interim rule, which allows the 35% discount in prices, is conservative enough to prevent predatory pricing while allowing consumers to benefit from lower prices and greater choice. The solution to "predatory pricing" is effective competition, and more service options for both consumers and carriers. In the event that allegations of predatory pricing, or any other illegal behavior, are made, the commission is charged with, and able to, investigate and intervene under RCW 81.04.110.

The lower limit to the rate band in the rule is supported by sound economic analysis. The commission, therefore, supports its use until such time as data are available about the new market that will emerge after the rules have been in effect for a period of time. When the commission staff develops a cost-study methodology, it should provide information to set rates that will support our stated goals. The current rate setting methodology, uniform rates using fully-allocated costs, does not support the goals of the present rule making. It is, therefore, not an appropriate methodology to consider. The commission staff will study such factors as variable costs, marginal costs, and average costs. The commission staff has not yet determined the appropriate methodology, but commits to considering carrier input as it works toward developing a methodology. The commission staff expects to complete that process by October 1999.

WAC 480-15-630(2) Estimates.

This rule allows a carrier the option of providing a binding estimate to consumers. The current rules do not allow this option. Commenters are opposed to binding estimates as an option, alleging it will cause consumer confusion and that it is not appropriate to take a model that has been used for long distance moves at the interstate level and apply it to local moves.

The commission believes that the option of a binding estimate will minimize the confusion that consumers experience under existing rules. Currently, consumers may believe that an estimate is binding, then have a rude awakening when their final bill greatly exceeds the estimate. Consumer representatives in this rule making initially sought to require binding estimates for all moves, but eventually accepted the general consensus that binding estimates should be an available option. In all consumer protection measures the commission seeks a balance between giving consumers the best information possible, and writing the least onerous rules that a regulated industry must follow. This rule allows the carrier to choose whether it will give a binding estimate for consumers seeking both long distance and local-intrastate moves. It is a business decision each carrier will make based on its market and the needs of its customers. No carrier is required to offer binding estimates.

One of the commission's roles is to provide consumers with the information needed to make informed decisions. Commission publications and industry sales personnel will be able to explain adequately binding estimates. Optional binding estimates are already available at the federal level for interstate rules. This change makes the state rule consistent with the interstate rule. The commission expects that many of the household goods carriers are already familiar with the federal rule, and that this change may ease, rather than complicate, compliance. This rule increases consumer choice and promotes competition in the industry, as well as increases consumer confidence regarding the amount a move will cost.

WAC 480-15-020(14) Household goods.

This rule clarifies the definition of household goods by stating that household goods are residential rather than commercial goods, and indicating which services fall under commission regulation. The rule excludes from regulation "the transportation of customer packed and sealed self-storage containers when no accessorial services are provided by the carrier in connection with the transportation of the container." This exclusion puts in rule form the policy currently followed by the commission staff, based upon a decision by the Commission Permits and Interpretations Committee. That decision concluded that a packed container, for which no accessorial services were provided, was "freight." Carriers of "freight" are regulated under chapter 480-14 WAC. The commission, here, indicates its agreement with the interpretation currently followed by its staff.

Commenters are opposed to the exclusory language in the rule, arguing that the materials defined in the exclusion should fall under commission jurisdiction as household goods, rather than as freight. They claim it does not matter whether household goods are packed and sealed into a container by consumers.

The commission disagrees. The transportation of customer packed and sealed self-storage containers does not encompass the same need for consumer protection as a typical household goods move. The commission has reviewed and considered opinions and opinion letters concerning the classification of the transportation of storage containers issued by the Federal Highway Administration and several other states. The proposed rule is consistent with the federal determination, and is consistent with previous staff interpretations.

Part 1.3

The proposed rules in Part 1.3 describe authority the legislature has given to the commission to enforce the state laws and rules, the actions the commission may take in any given circumstance, and the commission policy on compliance. These rules are offered so a carrier may know what to expect, and what options are available to the commission to address noncompliance. Commenters believe the commission does not have enough staff to enforce existing rules, and that the proposed rules will result in an increase in both consumer complaints and the number of carriers who are not in compliance with the rules. They argue that new rules should not be considered until additional compliance staff are hired. The commission believes staffing is a separate issue and must be considered apart from the rule making. Meeting the challenges of sufficient staffing and efficient use of resources concern all governmental agencies, and the commission is no exception.

In writing these rules, the commission has focused on the areas of greatest need, in order to allow scarce enforcement resources to be used to best serve consumers. For example, this is one reason the commission is simplifying the definition of the geographic areas that permitted carriers may serve in WAC 480-15-190.

The commission also recognizes the need for and supports a greater emphasis on technical assistance prior to enforcement. This is one reason why the commission seeks to use the period after a temporary permit is granted as a trial period in which carriers can be trained in areas of weakness. WAC 480-15-280, 480-15-300. Putting resources here, rather than in unneeded hearings, is another appropriate action. When hearings are needed, they will be held. The commission will allocate staff and resources to the areas of highest concern based on public need and its obligations. The commission will strive to accomplish its compliance and enforcement goals in the household goods industry.

WAC 480-15-030 Waiver of rules. The proposed rules include a provision allowing carriers to request, and the commission to consider granting, rule waivers.

Commenters believe the commission does not have authority to grant rule waivers.

The commission disagrees. Comparable rule waiver provisions presently exist in rules governing other industries regulated by the commission. RCW 81.04.040 obligates the commission to regulate in the public interest. This statute provides the commission the flexibility and discretion to make such rules and regulations as may be necessary to carry out its powers and duties. The commission takes its responsibilities and obligations seriously. Rules are written to apply to the most general situations, the commission recognizes that there may be instances when a rule may not pertain to a specific situation, or may cause an undue burden on a carrier in a specific situation. The ability to grant a rule waiver is aimed to respond to the public interest in a timely and fitting manner, especially where prior need was not or could not be anticipated. However, rule waivers are rare and are considered on a case-by-case basis in an open public meeting by the commissioners. Waivers are granted only when consistent with the public interest, the purposes underlying regulation, and sound public policy, and consistent with applicable statutes.

discussion: This rule making is one of the most important that has faced the commission in recent times. The magnitude of change that is proposed with regard to this industry is the most significant this industry has seen in this state in all the decades it has been in existence. There are obviously quite diverse perspectives on a number of very important issues, and those have been fought out in an appropriate fashion for matters of import before this commission.

The commission has experience with a transition to lesser regulation in the motor carrier industry. Experience with those companies regulated under chapter 480-14 WAC has been more successful than the commission anticipated, with fewer unsatisfactory consequences than we feared. The commission has heard on numerous occasions from permitted carriers, nonpermitted carriers, and consumers that citizens of Washington are hiring illegal carriers to perform their moves. The commission has seen evidence of these moves in proceedings in which it has sought to restrain the activities of nonpermitted movers. Nonpermitted carriers seeking entry into this industry have been significant stakeholders in this proceeding. Any time consumers in our state are incented to seek illegal options for the activities that they want to pursue, they are making a statement about their lack of consumer choice. When this occurs, something is wrong with the system. This is an example of where the government is viewed by the consumers we exist to serve as being in the way of what they need, rather than being there to help.

It is unfortunate that members of the Washington Movers Conference believe they have not been listened to and the commission does not doubt their sincerity. The commission's experience with its staff is that they are highly professional and are committed to independent evaluation. It is much more likely that there is a difference of position, rather than that staff did not listen to any particular position. Commissioners do not rely on filtered information. Commissioners do read the staff documents, but also request and receive regular briefings on rule makings of this import, as well as read directly written comments, seek legal opinions and, upon request, meet with stakeholders. Commissioners do their own evaluation.

There has been a lot of information that has formed the framework for this rule making. The commission has no doubt that a good faith effort on the part of everyone involved was made to develop the best possible set of rules while addressing the stakeholders' concerns. The commission believes most of the concerns of commenters have been addressed, as evidenced by the many rewrites of this chapter of rules.

The rules represent good public policy for the commission and for the state by promoting open markets and consumer choice, by eliminating barriers to entry, and by enhancing consumer protection. They should be adopted.

commission action: After considering all of the information regarding this proposal, the commission repeals all of chapter 480-12 WAC except WAC 480-12-100 and 480-12-370, and adopts the proposed rules governing household goods carriers in new chapter 480-15 WAC. See Appendix A of this order for the adopted rules.

changes from proposal: The commission adopted the proposal with the following changes from the text noticed at WSR 98-19-060.

a. WAC 480-15-630 (b)(iii) A binding estimate cannot exceed the highest authorized tariff rate. If a binding estimate exceeds the highest tariff rate, the carrier may not collect more than the highest authorized tariff rate.

b. WAC 480-15-660(2) What rates must I use to prepare a supplemental estimate? You must use the same rates as you used in determining charges for the original estimate.

c. WAC 480-15-780(8) When may I refuse to provide service to a shipper? You do not have suitable equipment necessary to perform the service.

d. WAC 480-15-800 What must I do if a shipper is not satisfied with my service? ... The shipper has nine months, from the date of delivery or the date the household goods should have been delivered, to file a claim for loss and damage....

statement of action; statement of effective date: In reviewing the entire record, the commission determines that all rules in chapter 480-12 WAC should be repealed except WAC 480-12-100 and 480-12-370 and a new chapter 480-15 WAC governing household goods carriers should be adopted to read as set forth in Appendix A, as rules of the Washington Utilities and Transportation Commission, to take effect pursuant to RCW 34.05.380(2) on the thirty-first day after filing with the code reviser.

ORDER

the commission orders:

1. Chapter 480-12 WAC, except WAC 480-12-100 and 480-12-370, is repealed and chapter 480-15 WAC is adopted to read as set forth in Appendix A, as rules of the Washington Utilities and Transportation Commission, to take effect on the thirty-first day after the date of filing with the code reviser pursuant to RCW 34.05.380(2).

2. This order and the rule set out below, after being recorded in the register of the Washington Utilities and Transportation Commission, shall be forwarded to the code reviser for filing pursuant to chapters 80.01 and 34.05 RCW and chapter 1-21 WAC.

3. The commission adopts the commission staff memoranda, and any attachments thereto, presented when the commission considered filing a preproposal statement of inquiry, when it considered filing the formal notice of proposed rule making, and when it considered adoption of this proposal in conjunction with the text of this order, as its concise explanatory statement of the reasons for adoption required by RCW 34.05.025.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.

Number of Sections Adopted on the Agency's own Initiative: New 0, amended 0, repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 97, amended 0, repealed 77.

Number of Sections Adopted using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 0, repealed 0.

dated at Olympia, Washington, this 14th day of December 1998.

Washington Utilities and Transportation Commission

Anne Levinson, Chairwoman

Richard Hemstad, Commissioner

appendix "a"

OTS-2448.3

Chapter 480-15 WAC

HOUSEHOLD GOODS CARRIERS

Part 1 - GENERAL

Part 1.1 - GENERAL INFORMATION

NEW SECTION

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.

[]

NEW SECTION

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 when no accessorial services are provided by a motor carrier in connection with 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.

(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.

[]

NEW SECTION

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.

[]

NEW SECTION

WAC 480-15-040  Adoption by reference. We have adopted by reference the following publications:

(1) "North American Uniform Out-of-Service Criteria" published by The Commercial Vehicle Safety Alliance, in effect on April 1, 1998.

(2) The sections of "Title 49 Code of Federal Regulations," cited as 49 CFR, listed below, including all regulations and appendices and amendments to those sections in effect on October 1, 1998:

(a) 49 CFR Part 382: Controlled Substance and Alcohol Use and Testing;

(b) 49 CFR Part 383: Commercial Driver's License Standards; Requirements and Penalties;

(c) 49 CFR Part 390: Safety Regulations, General;

(d) 49 CFR Part 391: Qualification of Drivers;

(e) 49 CFR Part 392: Driving of Motor Vehicles;

(f) 49 CFR Part 393: Parts and Accessories Necessary for Safe Operations;

(g) 49 CFR Part 395: Hours of Service of Drivers;

(h) 49 CFR Part 396: Inspection, Repair, and Maintenance; and

(i) 49 CFR Part 397: Transportation of Hazardous Materials; Driving and Parking

[]

NEW SECTION

WAC 480-15-050  Where may I get copies of documents adopted by reference? (1) The North American Uniform Out-of-Service Criteria may be viewed at the branch of the Washington state library housed at the commission's headquarters and is available for a fee from the Commercial Vehicle Safety Alliance and third-party vendors.

(2) Title 49 of the Code of Federal Regulations may be viewed at the branch of the Washington state library housed at the commission's headquarters and is available for a fee from the GPO (Government Printing Office) and third-party vendors.

[]

Part 1.2 - CONTACTING THE COMMISSION

NEW SECTION

WAC 480-15-060  How may I contact the commission? You may contact the commission in writing, in person, by telephone, by e-mail, or by FAX. If you are a permit holder, you should provide your permit name and number for proper identification.

(1) Mailing address:

The Secretary

Washington Utilities and Transportation Commission (or, WUTC)

P.O. Box 47250

Olympia, WA 98504-7250

(2) E-mail address: transinfo@wutc.wa.gov

(3) FAX number: (360) 586-1150

(4) Telephone number: (360) 664-1222

[]

NEW SECTION

WAC 480-15-070  Where is the commission located? The Washington utilities and transportation commission is located at 1300 S Evergreen Park Drive SW, Olympia, Washington.

[]

NEW SECTION

WAC 480-15-080  How do I file documents with the commission? You may file documents by mailing them to the address listed in WAC 480-15-060, or by hand delivering them to the commission's records management section. Your documents are officially received when date stamped by the commission's records management section. You may file certain documents electronically, as provided in WAC 480-09-120.

[]

NEW SECTION

WAC 480-15-090  May I submit information to the commission confidentially? Yes, you may submit information confidentially under the following conditions:

(1) Information other than complaints. The commission will limit access to information that is identified as confidential and is submitted under the provisions of WAC 480-09-015. Copies of this rule are available upon request.

(2) Complaints and rule violations. If you fear for your safety when reporting a complaint for rule violation then, at your request, we will keep your name and address confidential. We require that you sign and submit a form specifying that you fear for your safety if your name and address are made public. Please note, however, that it is difficult to investigate complaints regarding a specific shipment if we are unable to release the name of the shipper, as carrier records are often kept by shipper name and address.

[]

NEW SECTION

WAC 480-15-100  What form of payment does the commission accept? You may pay by money order, check, or certified check payable to the Washington utilities and transportation commission. You may also pay with cash if you make your payment in person. We accept only U.S. funds.

[]

NEW SECTION

WAC 480-15-110  If I change my business address or telephone number, must I notify the commission? Yes, if you change your physical or mailing business address or your business telephone number, you must immediately notify the commission in writing at the addresses listed in WAC 480-15-060.

[]

NEW SECTION

WAC 480-15-120  What rules apply to commission proceedings? The commission's rules governing administrative practices and procedures are in chapter 480-09 WAC. When a rule in this chapter is different than a rule in chapter 480-09 WAC, the rule in this chapter applies to household goods carriers.

[]

Part 1.3 - COMPLIANCE WITH THIS CHAPTER

NEW SECTION

WAC 480-15-130  What is the commission's compliance policy? (1) In enforcing the law, the commission encourages voluntary compliance with statutes, rules and commission orders, through the following:

(a) A program emphasizing education and technical assistance; and

(b) A compliance program including:

(i) Investigation and informal dispute resolution of customer complaints;

(ii) Investigation of informal and formal company complaints;

(iii) Driver and equipment safety compliance reviews;

(iv) Economic compliance audits (i.e., concerning rates, charges, and billing practices);

(v) Coordinated roadside enforcement; and

(vi) Cooperative agreements with other agencies to enable effective enforcement and appropriate use of resources.

(2) Where necessary to ensure compliance with statutes, rules and commission orders, the commission will pursue:

(a) Administrative actions, including, but not limited to, warnings, sanctions, penalty assessments, suspension or cancellation of permits, and hearings to show cause and classify motor carriers; and

(b) Proceedings in district and superior court.

(3) The commission is authorized to administer and enforce the laws and rules relating to household goods carriers by:

(a) Inspecting equipment, drivers, accounts, books, and documents, including, but not limited to:

(i) Vehicles, drivers, and vehicle and driver records and files;

(ii) Business and financial records;

(iii) Insurance certificates;

(iv) Compliance records;

(v) Billing documents;

(vi) Shipment records; and

(b) Prosecuting violations of statutes, rules and commission orders.

[]

NEW SECTION

WAC 480-15-140  How will the commission enforce this chapter? The commission authorizes staff to inspect the equipment, accounts, books, papers and documents of household goods carriers and to conduct inspections and investigations on its behalf. The commission will institute appropriate enforcement action against violators based on information collected by its staff. The commission has delegated authority to its staff to place vehicles and drivers out-of-service if they do not meet minimum safety standards. In addition, the commission has delegated authority to its staff to issue citations or arrest without warrant any person found violating this chapter in the presence of staff.

[]

NEW SECTION

WAC 480-15-150  Why would the commission take administrative action? The commission will take administrative action for violations in a manner that it believes will best assure future compliance by the violating household goods carrier and other household goods carriers. The commission may:

(1) Assess monetary penalties under the provisions in chapter 81.04 RCW as a tool of enforcement and remediation; or

(2) Suspend or cancel the permit of a household goods carrier under circumstances in which the commission believes education and penalties have not been, or will not be, effective to secure compliance; for serious actions including fraud or misrepresentation; and for willful violation of legal requirements.

[]

NEW SECTION

WAC 480-15-160  What sanctions apply to carriers operating without valid permits? (1) Operating while suspended. Household goods carriers who continue to operate after their permits have been suspended are subject to:

(a) Misdemeanor or gross misdemeanor citations, for which they must appear in district court; and/or

(b) Monetary penalty assessments or other administrative actions; and/or

(c) Proceedings to cancel their permit.

(2) Operating after cancellation. Household goods carriers who continue to operate after their permits have been canceled are subject to:

(a) Misdemeanor or gross misdemeanor citations, for which they must appear in district court; and/or

(b) Enforcement proceedings in superior court.

(3) Operating with no permit.

(a) Motor carriers who transport household goods entirely within the state of Washington without first obtaining a permit from the commission to do so are subject to citation if observed or contacted by a representative of the commission, or other law enforcement agency, while transporting household goods over the public roads of the state of Washington.

(b) If we receive information that a motor carrier is transporting household goods without a household goods permit, we may issue a citation and/or contact the motor carrier and provide education and technical assistance concerning the applicable rules and regulations. We will supply the motor carrier with a copy of the applicable laws and rules, as well as forms with which to apply for a permit.

(c) If the motor carrier continues to operate without a permit after the commission provides the motor carrier with an opportunity to apply for a permit and the motor carrier does not do so, the commission may institute an administrative proceeding to classify the motor carrier. If, after the hearing, the commission determines the motor carrier is operating as a household goods carrier without the required permit, the commission will issue a cease and desist order to the party(s) involved in the operations pursuant to RCW 81.04.510.

(d) If the motor carrier continues to operate without a permit after applying for a permit and before the commission has acted in that application, the commission may consider those operations in determining whether the carrier is fit to provide the proposed service.

(e) The commission may institute legal action in the appropriate court if it obtains sufficient information that a motor carrier continues to operate in violation of a commission order.

[]

Part 2 - PERMITS

Part 2.1 - GENERAL PERMIT INFORMATION

NEW SECTION

WAC 480-15-170  What is a household goods permit? A household goods permit is a document issued by the commission describing the transportation services a common carrier is authorized to provide, and the territory the common carrier is authorized to serve. It includes at least the following information:

(1) The permit number issued by the commission;

(2) The official name of the permit holder;

(3) The registered trade or business name(s);

(4) The address of record;

(5) The date the permit is issued;

(6) The operating authority granted by the commission; and

(7) Any conditions imposed by the commission upon on the permit.

[]

NEW SECTION

WAC 480-15-180  When must I have a household goods permit? (1) Unless you are operating in the territory described in WAC 480-15-200, you must receive a permit from us before you transport household goods:

(a) By motor vehicle;

(b) Over the public highways;

(c) Between points in Washington state; and

(d) For compensation.

(2) If you transport household goods without first obtaining a permit you will be subject to the enforcement actions described in WAC 480-15-160(3).

[]

NEW SECTION

WAC 480-15-190  Where may I operate with a household goods permit? (1) Household goods permits authorize state-wide operations unless:

(a) You elect to limit your service territory to specific counties; or

(b) The commission, by order, limits your service territory.

(2) If you choose to limit your service territory to specific counties, you must notify us in writing at the address shown in WAC 480-15-060. Your written request must include your household goods permit number and name.

[]

NEW SECTION

WAC 480-15-195  When will my existing household goods permit be reissued? If you hold a household goods permit that is valid on the effective date of these rules, it will be recognized as authorizing state-wide operations until a new household goods permit is issued, or until January 31, 1999, whichever occurs first.

(1) If you choose to limit your service territory to specific counties, you must notify us in writing at the address shown in WAC 480-15-060. Your written request must include your household goods permit number and name.

(2) For the purpose of this rule, a valid household goods permit does not include temporary permits, suspended permits, canceled permits, or permits that are held by carriers that have not filed required annual reports, paid regulatory fees, or satisfied penalty assessments, or whose checks have been returned because of insufficient funds or closed bank accounts.

[]

NEW SECTION

WAC 480-15-200  Are there areas I may operate without a permit? Pursuant to RCW 81.80.040(1), you do not need a permit to transport household goods exclusively between points within the limits of a city or town with a population of less than ten thousand, unless the city borders a city or town with a population of greater than ten thousand.

Pursuant to RCW 81.80.040(2), you do not need a permit to transport household goods exclusively between points within a city with a population between ten thousand and thirty thousand, if the commission has issued an order exempting transportation within that city from regulation.

[]

NEW SECTION

WAC 480-15-210  Are there different kinds of household goods permits? We issue household goods permits for emergency temporary, temporary, and permanent authority. We may grant:

(1) Emergency temporary authority for a period of thirty days or less when there is an urgent need for service and time or circumstances do not reasonably allow for filing and processing of an application for temporary authority;

(2) Temporary authority for up to one hundred eighty days to meet a short-term public need or until a decision is made on a pending application for permanent authority. The applicant must be fit, willing, and able, and the proposed service must be in the public interest; and

(3) Permanent authority with no expiration date or renewal requirement when the applicant is fit, willing, and able to provide service, when granting that service is in the public interest, and when the proposed service is needed to meet the current or future public convenience and necessity.

[]

NEW SECTION

WAC 480-15-220  How do I apply for a permit? (1) You may file an application for a permit on forms furnished by the commission. You may file your application in person or by mail. (See WAC 480-15-060 for the commission's address.)

(2) You must include all requested information, attachments, complete signed statements, and fees when you file your application. (See WAC 480-15-230 for the appropriate application fees.) We will not accept your application until all required information is supplied and any outstanding fees or penalties are paid.

(3) We may reject or dismiss your application if you include false, misleading, or incomplete information.

[]

NEW SECTION

WAC 480-15-230  What is the application fee? The maximum application fee, under RCW 81.80.090, is five hundred fifty dollars. After reviewing the actual costs of processing applications, we may set fees at less than the legal maximum. Each application form will clearly state the fee you must submit when filing an application.

The following table lists the application fees in place on the effective date of these rules:

[]

NEW SECTION

WAC 480-15-240  How may a new entrant obtain authority? You must file both a temporary and a permanent authority application if you do not hold an existing permit that allows you to transport household goods within the state of Washington.

The following table describes the application process for new entrants seeking to obtain permanent authority:

[]

NEW SECTION

WAC 480-15-250  What is the process to expand the authority in an existing permit? You must file only a permanent authority application if you want to expand the authority included in your existing household goods permit.

The following table describes the filing process for existing household goods carriers seeking to obtain additional permanent authority:

[]

NEW SECTION

WAC 480-15-260  Are there exceptions to the application process? We will grant an application for permanent authority without public notice or comment if:

(1) The applicant is fit, willing, and able to provide service; and

(2) 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 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.

[]

Part 2.2 - EMERGENCY TEMPORARY AND TEMPORARY AUTHORITY

NEW SECTION

WAC 480-15-270  When will the commission grant emergency temporary authority? We will grant an application for emergency temporary authority to meet an urgent need when time or circumstances do not reasonably allow for the filing and processing of a temporary permit application. We may grant emergency temporary authority for up to thirty days when a qualified applicant:

(1) Provides a certified statement of support identifying the need;

(2) Pays the application fee;

(3) Furnishes a list of vehicles to be used under emergency temporary authority; and

(4) Furnishes proof of public liability and property damage insurance.

[]

NEW SECTION

WAC 480-15-280  When must I apply for temporary authority? (1) You must apply for temporary authority if you are a new entrant, or to provide service to meet a short-term need. If you are a new entrant, and the commission grants your application, the temporary authority will allow you to provide service as a household goods carrier on a provisional basis for at least six months. During this time, the commission will evaluate whether you have met the criteria in WAC 480-15-330 to obtain permanent authority.

(2) We will grant or deny an application for temporary authority after we have conducted a complete review of your application, any supporting statements, reports or other information necessary to determine your fitness, and determine whether granting the application is in the public interest.

(3) When determining if an applicant is fit, willing, and able to provide the proposed service we will consider any information provided by the applicant and other members of the public regarding:

(a) The applicant's experience in the industry; knowledge of safety regulations; financial resources and equipment; compliance with tax, labor, employment, business, and vehicle licensing laws and rules; and

(b) Whether the applicant has been cited for violation of state law or commission rules, has been convicted of a Class A or Class B Felony, or has previously been denied authority on the basis of fitness; or has had permit authority canceled.

(4) When determining if the proposed service is in the public interest we will consider any information provided by the applicant, shippers and other members of the public supporting the proposed service, and whether granting the temporary authority will:

(a) Enhance choices available to consumers, promote a viable yet competitive household goods industry, or fill an unmet need for service; and

(b) Allow us to more efficiently regulate the household goods industry, and provide increased consumer protection through regulation.

(5) Statements and reports from the applicant, shippers, and other members of the public, must include their full name, address, phone number, and state that the information submitted is true and accurate. They must be signed and show the place and date where/when they were signed.

[]

NEW SECTION

WAC 480-15-285  Are there times when the commission will reject my application for temporary authority? We will reject your application for temporary authority if you file within six months of a denial of a previous application submitted by you. We will reject your application if filed within one year of cancellation of a permit, held by you, under WAC 480-15-320 or 480-15-450 (3), (4), (5), or (6).

[]

NEW SECTION

WAC 480-15-290  How will I know what the commission has decided? After reviewing your application, and all supporting statements and reports, the commission will issue an order to you granting or denying your application for temporary authority. An order granting temporary authority may include specific terms and conditions that you must satisfy before you begin or while operating under authority. We publish an application docket listing temporary authority we have granted or denied.

[]

NEW SECTION

WAC 480-15-300  What conditions may be attached to my temporary authority? Based on a review of your application and supporting statements, we may impose any of the following conditions when granting temporary authority:

(1) Driver and equipment safety training;

(2) Rates and billing practices training;

(3) Surety bond, or other means to ensure compliance;

(4) Special compliance audits;

(5) Special customer notices and comment forms which evaluate your services;

(6) Other reporting as the commission may require, such as customer lists, and financial reporting;

(7) Vehicles must pass inspection and be issued a valid Commercial Vehicle Safety Alliance (CVSA) inspection decal; and

(8) Other conditions depending on the circumstances surrounding the application.

[]

NEW SECTION

WAC 480-15-310  May I comment on a decision to grant or deny temporary authority? (1) We publish an application docket listing temporary authority we have granted or denied. We mail the docket to each applicant and, upon written request, to any other person interested in application proceedings.

(2) Anyone having an interest in an application appearing on the docket may file written comments within ten days following publication. Comments may be in the form of statements supporting or protesting the grant of authority or application. Comments must include your full name, address, telephone number, FAX number, and permit number, if applicable. Comments must state the nature of your support or protest and address the following issues: Fitness, public interest, levels of service, business practices, safety, and/or operation of equipment.

(3) We may grant or deny a protest without a hearing. We may, at our own discretion, hold a brief adjudicative proceeding on a protest. Rules governing applications and procedures for brief adjudicative proceedings are in chapter 480-09 WAC.

[]

NEW SECTION

WAC 480-15-320  May the commission cancel a temporary permit? Yes, we may cancel a temporary permit at any time if we determine that:

(1) The permit was not issued in the public interest;

(2) The grant of temporary authority was based on fraud, misrepresentation, or erroneous information from the applicant; or

(3) We find cause to cancel the permit under the circumstances described in WAC 480-15-450.

[]

Part 2.3 - PERMANENT AUTHORITY

NEW SECTION

WAC 480-15-330  When must I apply for permanent authority? (1) You must apply for permanent authority if you are requesting:

(a) New original authority;

(b) Transfer of existing authority;

(c) Acquisition of control of existing authority;

(d) Additional authority for an existing household goods permit; or

(e) Household goods authority for an existing general commodities permit granted under the provisions of chapter 480-14 WAC.

(2) We will grant or deny an application for permanent authority after we have conducted a complete review of your application, supporting statements, reports, or other information necessary to determine fitness, public interest, and current or future public convenience and necessity.

(3) Some transfers of existing permanent authority are not subject to the requirements in this rule. The exceptions are listed in WAC 480-15-260.

(4) When determining if an applicant is fit, willing and able to provide the proposed service, we will consider statements and reports including any information provided by the applicant and other members of the public regarding:

(a) The applicant's experience in the industry; knowledge of safety regulations; financial resources and equipment; compliance with tax, labor, employment, business, and vehicle licensing laws;

(b) Whether the applicant has been cited for violation of state law or commission rules, has been convicted of a Class A or Class B Felony, or previously has been denied authority on the basis of fitness; and

(c) The results of any compliance reviews, audits, inspection reports, and consumer complaints filed against the applicant.

(5) When determining if the proposed service is in the public interest we will consider statements and reports, including any information provided by the applicant, and other members of the public supporting the proposed service, and whether granting the permanent authority will:

(a) Enhance choices available to consumers, promote a viable yet competitive household goods industry, or fill an unmet need for service; and

(b) Allow us to more efficiently regulate the household goods industry, and provide increased consumer protection through regulation.

(6) When determining if the proposed service is needed to satisfy the current or future public convenience and necessity, we will consider any information provided by the applicant, shippers, and other members of the public supporting the proposed service, and any reports relating to the operations you conducted under temporary authority, including, but not limited to, the following:

(a) The number of customers you served;

(b) The nature of the service you provided;

(c) Your customers' satisfaction; and

(d) Statements regarding future need for your services.

[]

NEW SECTION

WAC 480-15-340  May I comment on an application for permanent authority? (1) We publish applications for permanent authority on the application docket which we mail to each applicant and, upon written request, to any other person interested in application proceedings.

(2) Anyone having an interest in an application appearing on the docket may file written comments within thirty days following publication, unless the application is published in conjunction with a grant of temporary authority. If the permanent authority application is published in conjunction with a grant of temporary authority, then comments will be accepted for one hundred eighty days or the full term of the temporary permits.

(3) Comments may be in the form of statements supporting or protesting the application. Comments must include the commenter's full name, address, telephone number, and should also include a FAX number and permit number, if available. Comments should be signed and indicate the place and date when they were signed. Comments must state the nature of your support or protest and address the following issues: Fitness, public interest, levels of service, business practices, safety, operation of equipment, and current or future public need for service.

(4) A comment protesting an application may not cause the application to be set for a hearing.

[]

NEW SECTION

WAC 480-15-350  Will my application be set for a hearing? We may hold a hearing or brief adjudicative proceeding on any application for permanent authority if it is necessary to resolve outstanding issues or concerns related to fitness, public interest, public convenience and necessity, or any other issue resulting from a compliance review, audit, inspection report, complaint, or public comment. Rules governing hearings and brief adjudicative proceedings are contained in chapter 480-09 WAC.

[]

Part 2.4 - USING YOUR PERMIT

NEW SECTION

WAC 480-15-360  Where must I keep my permit? You must keep your original permit in your main office, and also carry a copy of your permit in each vehicle used to transport household goods. You must show a copy of your permit to any law enforcement or compliance officer who asks to see it.

[]

NEW SECTION

WAC 480-15-370  What should I do if my permit is lost or destroyed? You may write to us and request replacement of a lost or destroyed permit. We will issue a replacement permit at no charge.

[]

NEW SECTION

WAC 480-15-380  May I allow others to use my permit authority? You must not allow others to transport household goods under your permit authority. All operations under a household goods permit must be conducted by the lawful permit holder. While you may not lease your permit authority, you may lease vehicles for use in your own operations pursuant to the leasing rules in WAC 480-15-590 and 480-15-600.

[]

NEW SECTION

WAC 480-15-390  What name may I use? (1) You must conduct operations under the name shown on your household goods permit. If you do business under a trade or assumed name, that name must also appear on your permit.

(2) You may not operate under a name that is similar to that of another carrier unless:

(a) The carrier whose name is similar has given you written permission to use the name; or

(b) The commission authorizes use of the similar name. Before authorizing use of a similar name, the commission must first determine that the use of the similar name will not:

(i) Mislead the shipping public; or

(ii) Result in unfair or destructive competitive practices.

[]

NEW SECTION

WAC 480-15-400  How do I change my permit name? (1) You must file a name change application if you want to change your permit name, corporate name, trade name, or add a trade name to your permit.

(2) Your name change application must include the application fee (as shown in WAC 480-15-230), copies of any corporate minutes authorizing the name change, and proof that you have properly registered your new name with the department of licensing, office of the secretary of state, or other agencies, as may be required.

(3) You must file an application to transfer or acquire control of permanent authority if your name change is the result of a change in ownership or controlling interest.

(4) You may not advertise or operate under the changed name until the commission approves your request.

[]

NEW SECTION

WAC 480-15-410  What should I do if I cannot use my permit? (1) If you are unable to use your permit due to medical reasons or because you have been called into active military service, you may request that your authority be voluntarily suspended.

(2) You must send your request to us in writing and include the following information:

(a) Your name, address, and permit number;

(b) The reason for the request (e.g., medical statement, military orders);

(c) The date you would like the voluntary suspension to begin;

(d) The length of time you will be unable to use your permit; and

(e) A statement that no household goods transportation will occur under your permit while it is suspended.

(3) We will issue an order suspending your permit. The order will set the length of time and the terms of your permit suspension.

(4) To activate your suspended permit you must send us a letter advising that you are ready to resume household goods service and agree to conduct operations in compliance with all laws and rules. You must satisfy any outstanding filing requirements before we will issue an order lifting the suspension.

(5) If you do not activate your permit before the suspension period expires, your permit may be canceled.

[]

NEW SECTION

WAC 480-15-420  What should I do if I no longer want to use my permit? If you no longer want to use your permit, you may send the original permit to us with a written request that it be canceled. Your cancellation request must include your name, address, and permit number. We will issue an order canceling your permit. Cancellation will be effective on the date of that order.

[]

Part 2.5 - SUSPENDED AND CANCELED PERMITS

NEW SECTION

WAC 480-15-430  Why would the commission suspend my permit? (1) The commission may suspend your permit under the provisions of WAC 480-15-410 or for good cause. Good cause includes, but is not limited to:

(a) Failure to maintain evidence of required cargo and/or liability insurance coverage for all areas of your operations;

(b) Failure to maintain your tariff and/or comply with the rates and rules contained in the tariff;

(c) Failure or refusal to comply with operating standards that protect the public health and/or safety;

(d) Allowing others to transport goods under your permit authority. See WAC 480-15-380.

(e) Operating in a manner which harms the rights of the shipping public or which constitutes unfair or deceptive business practices. For example: Investigation by the commission's staff representatives upholds numerous consumer complaints related to loss and damage, packing, loading and/or unloading, estimating or billing.

(2) The commission may suspend a permit without an opportunity for hearing if there is imminent danger to the public health, safety or welfare, or there is insufficient time to conduct a hearing.

[]

NEW SECTION

WAC 480-15-440  What happens if my permit is suspended for cause? (1) Notification. The commission will send you notice of its action to suspend your permit. The suspension is effective upon the service date of the notice.

(2) Contest of suspension. You may contest the suspension of your permit by requesting a hearing or brief adjudicative proceeding. The procedures for such hearings are contained in chapter 480-09 WAC.

(3) Reinstatement of permit. We will lift the suspension of your permit after you correct all conditions leading to the suspension.

[]

NEW SECTION

WAC 480-15-450  Why would the commission cancel my permit? The commission may cancel your permit under the provisions of WAC 480-15-410, 480-15-420 or for good cause. Good cause includes, but is not limited to:

(1) Failure to file an annual report or pay required regulatory fees;

(2) Failure to correct, within the time frame specified in the suspension order, all conditions that led to the suspension of your permit;

(3) Continued violations of applicable laws and rules affecting the public health, safety or welfare when the commission has reason to believe you would not comply with those laws and rules following a specified period of suspension;

(4) Repeated failure or refusal to comply with applicable laws and rules pertaining to operations of household goods carriers;

(5) Failure to supply information necessary to the commission for the performance of its regulatory functions when requested by the commission to provide such information;

(6) Submission of false, misleading or inaccurate information. The commission will hold a hearing prior to canceling your permit unless your permit is subject to cancellation because you failed, within the time frame specified by a suspension order, to correct the causes of the suspension;

(7) Allowing others to transport goods under your permit authority in violation of WAC 480-15-380.

[]

NEW SECTION

WAC 480-15-460  What happens if my permit is canceled for cause? (1) Notification. The commission will send you notice of its action to cancel your permit. The cancellation is effective upon the service date of the notice.

(2) Contest of cancellation. You may contest the cancellation of your permit by requesting a hearing or brief adjudicative proceeding. The procedures for such hearings are contained in chapter 480-09 WAC.

(3) Reinstatement of permit. If you correct all conditions that led to the cancellation of your permit, you may apply for reinstatement of your permit.

(a) To reinstate your permit within thirty days of cancellation, you must file an application for reinstatement and pay the applicable reinstatement fees.

(b) If you file an application for reinstatement after thirty days of cancellation, your application will be considered in all aspects to be an application for new authority, and will be subject to all terms and conditions specified in WAC 480-15-240 for new entrants.

(4) Small business, reinstatement of permit. If you are a small business as defined in WAC 480-15-020, and you correct all conditions that led to the cancellation of your permit, you may apply for reinstatement of your permit.

(a) To reinstate your permit within sixty days of cancellation, you must file an application for reinstatement and pay the applicable reinstatement fees.

(b) If you file an application for reinstatement after sixty days of cancellation, your application will be considered in all aspects to be an application for new authority, and will be subject to all terms and conditions specified in WAC 480-15-240 for new entrants.

[]

Part 3 - ADMINISTRATIVE, TARIFF, AND RATE REQUIREMENTS TO TRANSPORT HOUSEHOLD GOODS, FOR HIRE, WITHIN THE STATE OF WASHINGTON

Part 3.1 - RULE BOOKS

NEW SECTION

WAC 480-15-470  Rule books. (1) What is a rule book? A rule book is a reprint of the complete set of Washington Administrative Code (WAC) rules governing the operations of household goods carriers.

(2) How do I get a rule book? You may request a rule book by contacting the commission. The first copy of the rule book is free. However, we may charge a fee for multiple copy requests. We will automatically send a rule book to anyone who applies for a household goods permit.

(3) How do I get a rule book update? If changes occur, we will automatically send annual rule book updates to everyone who has a household goods permit. Any person may request a current rule book by contacting us at the address listed in WAC 480-15-060.

(4) Is the rule book copyrighted? The rule book is not copyrighted. You may copy or reproduce it without our permission.

[]

Part 3.2 - ANNUAL REPORTS AND REGULATORY FEES

NEW SECTION

WAC 480-15-480  Annual reports and regulatory fees. (1) What is an annual report? An annual report is a year end statement that discloses to the commission financial, equipment, operating, and management information about you and the operations you conducted under your household goods permit. Your signed report includes a statement certifying that the information in your report is true and accurate.

(a) You must report your financial information according to the Uniform System of Accounts established by the commission for household goods carriers.

(b) The commission will mail annual report forms and instructions to each household goods permit holder at their address of record. If you do not receive an annual report form, it is your responsibility to contact the commission and request the form.

(2) What is a regulatory fee? A regulatory fee is an annual assessment paid by each household goods carrier to cover the costs of regulating the household goods industry. The maximum regulatory fee is set by law at one-fourth of one percent of the gross operating revenue generated from your intrastate transportation of household goods. We may reduce the fee by general order. Each year we review the costs of regulating the household goods industry and set the next year's fee accordingly.

(3) How do I calculate my regulatory fee? Your regulatory fee is calculated as a percentage of your intrastate gross operating revenues generated from the transportation of household goods during the prior calendar year.

(4) When are my annual report and regulatory fees due? You must file your annual report and pay your regulatory fees by May 1st of the year following the calendar year for which you are reporting.

(a) If you pay your regulatory fee late, we will assess an automatic late fee of two percent of the amount due, plus one percent interest for each month after that.

(b) If you do not file your annual report and/or do not pay your regulatory fee, we may issue penalty assessments or cancel your permit under the provisions of WAC 480-15-450.

[]

Part 3.3 - TARIFF AND RATES

NEW SECTION

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 these rules, 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.

(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.

[]

NEW SECTION

WAC 480-15-500  Tariff maintenance and fees. (1) What is a tariff maintenance fee? A tariff maintenance fee compensates us for compiling, printing, and distributing amended tariff pages.

(2) Do I always have to pay full maintenance fees? The annual maintenance fee is payable in advance on a prorated basis depending upon the month in which you purchase a tariff. See the table below:

(3) How am I billed for my annual tariff maintenance fees? By December 1 of each year, we send a bill to each tariff subscriber for the next year's annual tariff maintenance service. Tariff subscribers must pay maintenance fees by December 31.

(4) What happens if a tariff subscriber fails to pay the annual maintenance fees by December 31?