Can the Division of Motor Vehicles use its motor-carrier safety regulations to inspect and regulate a privately owned bus that is not being used to carry passengers for a fee?

Plain-English summary

The Division of Motor Vehicles asked the AG whether it could regulate privately owned buses (think: a church bus, a senior-citizens-organization bus, a corporate shuttle for employees, a school-fundraiser parents' bus, a private school bus) under Article 17 of Chapter 20 of the General Statutes. Article 17 sets up the Motor Carrier Safety Regulation Unit and gives DMV authority to enforce U.S. DOT-style safety regulations on motor carriers operating in NC.

The wrinkle: DMV's own implementing regulation (19A NCAC, Subchapter D, § .0801(c)) appeared to extend coverage to "all private motor carrier vehicles on the highways of the State of North Carolina used in commerce to transport passengers or cargo" meeting certain size or hazardous-material criteria. That language, on its face, would reach private passenger buses even when no one was being charged a fare.

Attorney General Lacy Thornburg and Special Deputy AG Jane P. Gray said the regulation went beyond what the statute allowed. The reasoning:

Brief statutory history. Before 1983, the Utilities Commission regulated for-hire passenger transportation under Chapter 62. G.S. § 62-281 covered for-hire motor vehicles and private motor carriers transporting hazardous waste. In 1983, the legislature expanded that authority to cover all private carriers (not just hazardous waste) and moved the rulemaking authority from the Utilities Commission to the Commissioner of Motor Vehicles. In 1985, the legislature transferred the authority entirely to the Division of Motor Vehicles, enacting G.S. § 20-384 and repealing G.S. § 62-281.

The statutory definition controls. The 1985 transfer kept the definition of "private carrier" found in G.S. § 20-376(21), which is a cargo definition (a person transporting their own goods or products in their own business, as opposed to for-hire cargo transport). The legislature defined private carrier in terms of cargo, not passengers. The legislature did not say private bus operators were under DMV motor-carrier regulation.

The regulation overreached. DMV's rule, by extending coverage to "private motor carrier vehicles ... used in commerce to transport passengers or cargo," added a passenger-carrier category that the legislature had not authorized. That is classic agency-rulemaking-beyond-statutory-authority territory.

Black-letter administrative law. An agency has no power to promulgate rules that alter or add to the statute it administers. The AG cited 1 NC Index 3d, Administrative Law, § 3 for that bedrock principle. If the legislature wants to regulate private passenger buses, it has to amend the statute. Until then, DMV's safety regulations only reach common carriers, contract carriers, and for-hire carriers of passengers (not pure-private passenger transport).

The practical takeaway in 1988 terms: a privately owned bus, used only for non-compensation transport of passengers, was not subject to DMV motor-carrier safety inspections, registration as a motor carrier, or hours-of-service rules under Article 17. Other state motor-vehicle requirements (registration, inspection under the general state inspection regime, driver's licensing) continued to apply.

Currency note

This opinion was issued in 1988. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Federal law (Federal Motor Carrier Safety Regulations under 49 C.F.R. parts 350-399) now imposes safety requirements on certain interstate private motor carriers transporting passengers. NC has updated its motor carrier statutes multiple times since 1988, and the federal-state coordination has tightened, particularly after fatal accidents involving private passenger carriers. Anyone operating a passenger bus today, even on a private non-fee basis, should check current NC and federal motor-carrier safety obligations. The 1988 opinion remains a clean statement of the administrative-law principle (agencies cannot exceed statutory authority) regardless of how the substantive coverage has evolved.

Background and statutory framework

The terms "private carrier," "common carrier," "contract carrier," and "for-hire carrier" carry specific meanings in motor-carrier law:

• For-hire carrier: transports persons or property for compensation, available to the public on a continuing basis (common carrier) or under individual contract (contract carrier).
• Common carrier: a for-hire carrier holding itself out to the public to serve all who request service.
• Contract carrier: a for-hire carrier serving specific customers under continuing contracts.
• Private carrier: a person transporting their own property in their own commercial enterprise, not for hire to others. The 1988 opinion turns on the fact that NC's statutory "private carrier" definition is cargo-oriented and does not include private operation of buses for non-compensated passenger transport.

The DMV regulation imported federal U.S. DOT safety rules into NC for "private motor carrier vehicles ... used in commerce to transport passengers or cargo." Federal regulations (in 1988 and now) cover passenger carriers in interstate commerce under various tests (size, distance, number of passengers). Importing the federal scheme into state law for purely intrastate, non-compensated passenger transport was the overreach the AG identified.

The opinion is a useful primer on agency-rulemaking limits. The principle (agencies cannot expand their jurisdiction by rule) is fundamental to NC and federal administrative law. Modern NC courts apply the same principle under the State Administrative Procedure Act (Chapter 150B), which requires every agency rule to be authorized by statute.

Common questions

What about a church bus that drives parishioners to and from services?

A purely private (no fee charged) church bus would not have been covered by DMV motor-carrier safety regulations under the 1988 framework. Whether modern federal motor-carrier rules apply depends on factors like the bus size, the regularity of service, whether it crosses state lines, and whether parishioners pay or contribute toward operations.

What about a corporate shuttle service for employees?

A purely private corporate shuttle (employees ride for free as a benefit) was not covered under the 1988 framework. If the employer charges employees a fare, the analysis shifts because the carrier could fit a for-hire definition. Even where Article 17 didn't apply, general motor vehicle inspection, registration, and driver licensing did.

What about senior living community buses?

Same answer as the corporate shuttle: depends on whether residents are being charged a separate fee for transport, or whether the transport is included in their residence fees. The AG's opinion focused on the for-hire/private line and would have left non-fee community buses outside DMV motor-carrier safety jurisdiction.

Does this opinion still control current practice?

Probably not, in practical terms. Federal motor-carrier rules have been expanded over the past 35 years to cover many private passenger operations that the AG's 1988 analysis would have excluded. NC has updated its statutory framework. The administrative-law principle (agencies cannot exceed statutory authority by rule) remains controlling, but the underlying statutory authority is different now from what the AG was reading in 1988.

Source

• Landing page: https://ncdoj.gov/opinions/authority-of-division-of-motor-vehicles-over-private-passenger-buses/

Citations

• N.C. Gen. Stat. Ch. 20, Art. 17 (Motor Carrier Safety Regulation Unit)
• N.C. Gen. Stat. § 20-376(21) (private carrier definition)
• N.C. Gen. Stat. § 20-384 (DMV authority)
• Former N.C. Gen. Stat. § 62-281 (repealed)
• Title 19A NCAC, Subchapter D, § .0801(c) (DMV rule)
• 1 NC Index 3d, Administrative Law, § 3 (agency rulemaking limits)
• 58 N.C. Op. Att'y Gen. 1 (Jan. 5, 1988)

Original opinion text

Best-effort transcription from the official NCDOJ web posting. Some quoted regulatory and statutory text may be condensed; consult the linked landing page for any portion not shown.

January 5, 1988

Motor Vehicles; Administrative Law; Regulatory Authority of Division of Motor Vehicles Over Private Passenger Buses

Requested By: William S. Hiatt, Commissioner of Motor Vehicles

Conclusion: No.

Prior to 1983, regulatory authority over for-hire transportation of passengers was vested in the Utilities Commission under the provisions of Chapter 62. Specifically, G.S. 62-281 provided that the Commission could regulate all for-hire motor vehicles and private motor carriers engaged in the transportation of hazardous waste in interstate or intrastate commerce over the highways of this State. In 1983, that authority was expanded to cover all private carriers, not just those engaged in the transportation of hazardous waste and the responsibility for promulgating any regulations was transferred to the Commissioner of Motor Vehicles. Finally, in 1985 the General Assembly transferred the authority to the Division of Motor Vehicles by the enactment of G.S. 20-384 and simultaneous repeal of G.S. 62-281.

It is a basic principle of administrative law that an administrative agency has no power to promulgate rules and regulations which alter or add to the law it was set up to administer or that have the effect of substantive law. 1 NC Index 3d, Administrative Law, § 3. The statute empowering the Division to enact regulations over private carriers could not be altered or added to by the regulations. The Division, however, in Title 19A, Subchapter D, Section .0801(c) of the Administrative Code appears to have done so. That subsection provides that the U.S. Department of Transportation rules and regulations relating to safety of operation and equipment shall apply to "all private motor carrier vehicles on the highways of the State of North Carolina used in commerce to transport passengers or cargo:

(1) if such vehicle has a gross vehicle weight rating of ten thousand pounds or more;

(2) if such vehicle is designed to transport more than ten passengers, including the driver; or

(3) if such vehicle is used in the transportation of materials found to be hazardous in accordance with the Hazardous Materials Transportation Act as amended in Title 49, Code of Federal Regulations." (Emphasis added).

The regulation attempts to add to the definition of "private carrier" found in G.S. 20-376(21) someone who transports passengers. The Division having no statutory basis to so add to the definition, the regulation language regarding private carrier of passengers must be disregarded as outside the scope of the Division's authority.

The carrier of passengers would have to fall within the definitions of common carrier, contract carrier or for-hire carrier in order to be included within the jurisdiction of the Division's safety regulations. If the owner of the bus does not engage in the transportation of persons for compensation, the Division has no authority under Article 17 of Chapter 20 of the General Statutes to require the owner to comply with its motor carrier safety regulations.

LACY H. THORNBURG
Attorney General

Jane P. Gray
Special Deputy Attorney General