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BEFORE THE
FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION U.S. DEPARTMENT OF TRANSPORTATION
FEES FOR THE UNIFIED CARRIER REGISTRATION PLAN AND AGREEMENT
DOCKET No. FMCSA-2009-0231
COMMENTS OF THE NATIONAL PRIVATE TRUCK COUNCIL The National Private Truck Council, Inc. (“NPTC”) submits these comments regarding the proposed fees published by the Federal Motor Carrier Safety
Administration for the Unified Carrier Registration Plan and Agreement, 74 Federal Register 45583 (September 3, 2009). NPTC opposes the proposed fee levels for several reasons. First, the proposed fee increase of 122% is unreasonable and therefore violates the UCR Act, 49 U.S.C. 14504a(f)(1)(E). Second, the FMCSA and the States have simply transferred the risk of widespread non-compliance to the carrier registrants—i.e., if certain affected carriers do not pay the fees, the States want to raise the fees on the remaining carriers that have lawfully paid the fees.
Third, the State recipients of UCR fee revenues have not shown they are using an amount at least equal to the registration fee revenue for motor carrier safety programs, enforcement or the administration of the UCR Plan and Agreement, as required by the UCR Act. 49 U.S.C. 14504a(e)(1)(B).
NPTC is a national trade association trade association representing the interests of over 400 companies that operate private truck fleets in furtherance of non-transportation primary businesses. NPTC members include both Fortune 500 companies and small local distribution companies. Our members are heavily represented in the food, retail,
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chemical and manufacturing industries, but encompass a broad cross-section of American business interests.
NPTC members provide both long-haul trucking and local distribution service, depending on the type of industry and distribution requirements. They operate both tractor-trailers and a variety of straight trucks in meeting their transportation needs.
Most important, private motor carriers did not pay the Single State Registration System fees that were replaced by the UCR fees. NPTC agreed to support the legislation assessing UCR fees against all carriers, private and for-hire, on the grounds that the revenue would be used solely for motor carrier safety enforcement. This rulemaking violates that statutory requirement.
Reasonableness Requirement for Increased Fees
The UCR Act provides that the UCR Board may ask the Secretary of
Transportation to adjust the fees “within a reasonable range” on an annual basis if the revenues derived from the fees are insufficient to provide the revenues to which the States are entitled under the Act. 49 U.S.C. 14504a(f)(1)(E)(i). The FMCSA uses this statutory language to justify increasing the UCR fees for the 2010 registration by 122% over the fees that were assessed for the prior three years.
Approximately one-half of the proposed fee increase may be attributed to a change in the UCR Act under which only power units, and not trailers or semitrailers, are counted for purposes of determining the number of commercial motor vehicles operated by a motor carrier or motor private carrier registrant. See § 701(d)(1)(A) of Pub. L. No. 110-432, Div. A, 122 Stat. 4906 (October 16, 2008), amending the definition of
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in the fees not exceeding 61% of the 2009 fees to comply with this new statutory definition of commercial motor vehicle.
The rest of the fee increase, however, would be imposed simply because the States have been unable to generate the amount of revenue they are “entitled” to under the UCR Act. 1
The basis for the UCR registration program is the Motor Carrier Management Information System database, or MCMIS. The MCMIS database is fundamentally flawed because there is no mechanism for purging the system of entities that have gone out of business, merged, consolidated, filed bankruptcy, or simply disappeared from regulatory oversight. In addition, the information in MCMIS is self-reported by
registrants using the Form MCS-150, and the FMCSA has no systematic mechanism for verifying and correcting the data submitted by the registrants.
This shortfall has resulted from use of an incomplete and erroneous database of registrants and the failure of the States to use effective enforcement
techniques. Nevertheless, the FMCSA now proposes to penalize those registrants who have lawfully complied with the registration and fee requirements for the past three years by more than doubling their fees, while continuing to subsidize those companies that do not register.
Thus, when the UCR Board began to review the number of potential registrants in order to establish he initial fee structure in 2007, it was clear that the Board would need to make a variety of assumptions in order to determine the fee schedule. First, there were well over 700,000 entries in the MCMIS database, although all parties (the FMCSA, the
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According to the FMCSA, the States were “entitled” to some $107.8 million in 2009 fees, but collected only $77.1 million in that registration year. There were similar
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States, and private industry representatives) agreed that this number was probably too large by perhaps fifty percent or more.2
In addition, many of the “registrants” had provided obviously erroneous information that was never corrected by the FMCSA (for example, an owner-operator driver with motor carrier authority was listed in MCMIS as operating 80,000 vehicles, when it was likely that this registrant had one vehicle registered at 80,000 pounds GVW). Thus, the UCR Board and the FMCSA were left to guess at the correct number of
potential registrants and the proper vehicle count for each registrant. This made the determination of an appropriate fee schedule that would generate the amount of revenue allowed by the UCR Act problematic at best.
According to the notice of proposed rulemaking, the FMCSA and the UCR Board agreed that only 433,535 motor carrier, broker and freight forwarder entities (i.e.,
potential registrants) were “active.” 74 Federal Register at 45587. One of the proposed fee structures, rejected by the FMCSA, assumed that all 433,535 of these entities would register and pay the fees as required by law. Id., Table 4. That proposal would have accounted for the statutory change in the commercial motor vehicle definition to remove the counting of trailing units, but no additional increase in fees.
Yet the FMCSA rejected this approach, and instead derived a convoluted
adjustment that based fees on a universe of only 260,466 entities registering. The agency
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Nevertheless, this figure continues to have currency. Senator Frank Lautenberg, Chairman of the Senate Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security, used this erroneous 700,000 figure in his prepared statement offered at the September 23, 2009 confirmation hearing for Anne Ferro to be Administrator of the FMCSA.
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justifies this revision by accepting the UCR Board’s position that “it was unreasonable to expect the states to register and collect fees from all potential registrants.” Id. at 45589. The effect of this approach is to shift the risk of non-compliance from the States to the registrants who lawfully pay their fees each year. Given that the States have shown little or no interest in effectively collecting the fees from all of the potential registrants, and given that the entire registration program is based on a faulty database, this amounts to an arbitrary and capricious assessment of fees on entities simply because they are willing to comply with the law.
Specifically, after the original fees were established in 2007, the States sent out the registration notices and fee invoices to the entities listed in MCMIS. Some States attempted to expunge all of the clearly erroneous registrations from the MCMIS
registrants in their State, but most States used the MCMIS information as collected by the FMCSA. Over the past three years, States have attempted a variety of methods to
educate the registrants about the fees and to enforce the fee requirements, but the bottom line is that the MCMIS database is no closer to setting out an accurate portrayal of the motor carrier industry than in 2007.
Furthermore, neither the UCR Board nor the FMCSA has set out any procedure for auditing the UCR fee enforcement activities of the States. The UCR Board has established an Audit Committee, but this committee has never actually audited or contracted with an outside audit form to audit any participating State’s enforcement activities. Instead, at the beginning of each monthly UCR Board teleconference, the States are asked to report verbally on their enforcement procedures, and the reports vary
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from nothing to roadside inspection to other haphazard and insubstantial enforcement programs.
Not surprisingly, in the three years the UCR fees have been in effect, registrations have ranged from 237,157 in 2007 to only 282,483 in 2009. 74 Federal Register at 45586, Table 2. No one can say with any measure of certainty what percentage of the potential registrants and fee payers are accounted for in these registration numbers.
Furthermore, largely because of the lack of effective enforcement by the States, the UCR Board refrained from recommending a fee increase to the FMCSA in 2008 and 2009. But nothing has changed this year—the MCMIS database is still hopelessly incomplete and error-filled, and the States still have no systematic and effective enforcement mechanism in place. Yet this year, in the midst of a severe economic recession, the States have recommended more than doubling the UCR fees because they are “entitled” to raise more revenue under the statute.
Increasing the fees without a reliable database or an effective enforcement mechanism will penalize those carriers and other registrants who have voluntarily paid the UCR fees for the past three years and subsidize those potential registrants who have failed (either willfully or due to lack of knowledge of the requirements) to pay their fair share of fees. Moreover, such a significant increase in fees without a corresponding enhancement of the enforcement procedures will encourage non-compliance by even more companies, thereby exacerbating the problem and reducing the revenue generated by the fees in 2010. Next year, the States and the FMCSA will face the same issue, and will have to raise the fees even higher while the number of actual registrants will likely decline again. This spiral of increased fees and compliance avoidance will continue each
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year until the FMCSA and the States correct the flaws in the MCMIS database and establish an effective enforcement protocol.
The UCR Act authorizes the States to ask the FMCSA to increase the fees “within a reasonable range” on an annual basis if the fees “are insufficient to provide the
revenues to which the States are entitled” under the Act. 49 U.S.C. 14504a(f)(1)(E)(i). The use of the reasonableness requirement modifies the ability of the FMCSA to increase the fees in a single year to make up for the entire revenue shortfall—any increase must be reasonable.
NPTC believes that a fee increase of more than 61%, the amount necessary to comport with the change in the definition of commercial motor vehicle, is unreasonable. First, the U.S. economy is suffering from a significant recession, and companies are operating fewer vehicles as a result. Using the FMCSA’s interpretation of the statutory directive, this would mean that fewer trucks on the road would justify a further increase in UCR fees to ensure that States receive all of the revenues to which they are “entitled.” The effects of the recession itself would become a justification for a fee increase.
Second, as noted above, the States have not engaged in any effective enforcement of the existing UCR fee structure. Nor has the UCR Board audited the enforcement activities of the States. Raising the UCR fees by 122% allows the States to avoid their responsibility to ensure that all potential registrants pay the fees, and thereby increases the burden on those registrants who lawfully pay the fees.
Spending of UCR Revenues on Motor Carrier Safety Enforcement
Third, the States have not met their statutory burden of demonstrating they are spending the UCR fee revenue on motor carrier safety programs. The UCR Act provides
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that to be eligible to participate in the Agreement and Plan, a State must demonstrate that an amount “at least equal to” the revenue derived by the UCR Agreement shall be used for motor carrier safety programs, enforcement, or the administration of the UCR Plan or Agreement. 49 U.S.C. 14504a(e)(1)(B).
Although the States might self-report that they have each met this requirement, to date the UCR Board and its Audit Committee have made no investigation of these claims, and there is no evidence that the States can verify compliance with this requirement. The purpose of the UCR Act was to require the motor carriers subject to motor carrier safety regulations to fund motor carrier safety enforcement activities by the States, not to allow the States to use the revenue for any purpose they desired. Without an audit of the use of UCR revenue by the States, any increase in fees above that necessary to meet the changed definition of commercial motor vehicle is inherently unreasonable.
For these reasons, NPTC requests that the FMCSA amend the fee increase to only that amount of increase necessary comply with the new definition of commercial motor vehicle.
Respectfully submitted,
Gary F. Petty President and CEO
National Private Truck Council, Inc. 950 N. Glebe Road Suite 530
Arlington, Virginia 22203
