NAC706.208. Lease of equipment by authorized carrier: Generally.

     1. Except as otherwise provided in subsections 2 and 3, and NAC 706.210 and 706.211, an authorized carrier may lease equipment for his or her own use, with or without a driver, on the basis of a long-term lease. For such a lease:

     (a) An authorized carrier who is a fully regulated carrier may lease equipment on a one-for-one basis to supplement the carrier’s fleet up to the entire amount of similar equipment owned and currently operated by the carrier under the operating authority of the carrier.

     (b) Including the vehicles leased by an authorized carrier pursuant to this section, the total number of vehicles operated by the carrier must not exceed, under any circumstances, the total number of vehicles that the carrier is authorized to operate under the certificate or permit of the carrier.

     (c) The authorized carrier may use his or her own insurance or insurance of the lessor to meet the insurance requirements of NAC 706.191.

     (d) The authorized carrier must ensure that all leased vehicles meet the vehicle safety requirements of NAC 706.379 and 49 C.F.R. Part 396.

     (e) The authorized carrier must have a copy of the lease, proof of insurance and reports of vehicle safety on file at his or her office upon commencement of the lease.

     2. Except as otherwise provided in subsection 3 and NAC 706.210 and 706.211, an authorized carrier who leases equipment for his or her own use, with or without a driver, on the basis of a short-term lease:

     (a) May use the authorized carrier’s own insurance or insurance of the lessor to meet the insurance requirements of NAC 706.191;

     (b) Must ensure that all leased vehicles meet the vehicle safety requirements of NAC 706.379 and 49 C.F.R. Part 396; and

     (c) Must have a copy of the lease, proof of insurance and reports of vehicle safety on file at the authorized carrier’s office upon commencement of the lease.

     3. The Authority may approve the lease of equipment that does not comply with subsection 1 or 2 if:

     (a) The authorized carrier files a petition for a waiver of the requirement with which the lease does not comply; and

     (b) The Authority finds that approval of the lease would be in the public interest.

Ê The Authority will issue a public notice of the receipt of a petition for a waiver received pursuant to this subsection.

     4. Leased equipment may only be used in an operation authorized by the lessee’s certificate or permit and must be identified as operated by the lessee. A copy of the lease must be carried with the equipment during the period of the lease.

     5. Work may not be performed pursuant to an expired lease.

     6. An authorized carrier may lease restored theme or antique vehicles if the Authority approves the lease before its commencement. The Authority will approve the lease if:

     (a) The leased vehicle is used only for special occasions; and

     (b) Arrangements to lease the vehicle are made at least 7 days before the commencement of the lease.

     7. Every lease of equipment by an authorized carrier must be in writing, dated and signed by the parties thereto or an authorized agent or employee of the parties.

     8. The leased equipment must be under the control and direction of the authorized carrier.

     9. The leased equipment must be operated within the scope of the operating authority of the authorized carrier and in conformance with the tariff of the authorized carrier.

     10. The driver of a leased vehicle must be under the complete control and direction of the authorized carrier. The authorized carrier must:

     (a) Ensure that all drivers meet and maintain the driver qualifications required pursuant to NAC 706.247; and

     (b) Be free to enforce rules regarding working and driving.

     11. The authorized carrier may not avoid liability for any damages arising out of the negligent operation of the equipment through the terms of the lease.

     12. The terms of any lease of equipment pursuant to this section must include, without limitation, a provision that the equipment must be insured in accordance with the provisions of NAC 706.191. A lessee may use his or her insurance or the lessor’s insurance to satisfy the requirements of NAC 706.191. A copy of the insurance used by a lessee to satisfy the requirements of NAC 706.191 must be made available for review by the Authority.

     13. The compensation to be paid for any leased equipment must be fixed at the inception of the lease and may include a specific sum or formula for calculating the compensation for the duration of the lease.

     14. A vehicle leased pursuant to this section must be identified in accordance with NAC 706.170 as operated by the lessee.

     15. For the purposes of this section, equipment leased by an authorized carrier pursuant to a bona fide capital lease, as that term is defined by generally accepted accounting principles, shall be deemed to be equipment that is owned by the authorized carrier. The provisions of this section do not apply to such a lease.

     (Added to NAC by Pub. Service Comm’n, eff. 9-1-87; A 11-15-88; 9-16-92; A by Transportation Serv. Auth. by R071-98, 10-28-98; R040-02, 9-20-2002; R090-05, 12-29-2005)