[Federal Register Volume 75, Number 80 (Tuesday, April 27, 2010)]
[Rules and Regulations]
[Pages 21993-22012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9674]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Part 367
[Docket No. FMCSA-2009-0231]
RIN 2126-AB19
Fees for the Unified Carrier Registration Plan and Agreement
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Final rule.
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SUMMARY: This rule establishes annual registration fees and a fee
bracket structure for the Unified Carrier Registration (UCR) Agreement
for the calendar year beginning January 1, 2010, as required under the
Unified Carrier Registration Act of 2005, enacted as Subtitle C of
Title IV of the Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users, as amended.
DATES: Effective Date: April 27, 2010.
ADDRESSES: Copies or abstracts of all comments and background documents
referenced in this document are in Docket No. FMCSA-2009-0231. For
access to the docket, go to:
Federal eRulemaking Portal: http://www.regulations.gov. Go
to the ``Help'' section of regulations.gov to find electronic retrieval
help and guidelines. Regulations.gov is generally available 24 hours
each day, 365 days each year.
DOT Docket Management Facility: U.S. Department of
Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001.
Docket Management Facility hours are between 9 a.m. and 5 p.m., e.t.,
Monday through Friday, except Federal holidays.
Privacy Act: Anyone is able to search the electronic form for all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review U.S.
Department of Transportation's (DOT) complete Privacy Act Statement in
the Federal Register published on April 11, 2000 (65 FR 19476), or you
may visit http://docketsinfo.dot.gov.
FOR FURTHER INFORMATION CONTACT: Ms. Julie Otto, Office of Enforcement
and Program Delivery, (202) 366-0710, FMCSA, Department of
Transportation, 1200 New Jersey Ave., SE., Washington, DC 20590 or by
e-mail at: [email protected].
SUPPLEMENTARY INFORMATION: The preamble is organized as follows:
[[Page 21994]]
Table of Contents
I. List of Abbreviations
II. Legal Basis for the Rulemaking
III. Statutory Requirements for the UCR Fees
IV. Background
V. Discussion of Comments on the NPRM
VI. The Final Rule
VII. Regulatory Analyses and Notices
I. List of Abbreviations
The following is a list of abbreviations used in this document:
Alabama PSC Alabama Public Service Commission
AMSA American Moving and Storage Association
ATA American Trucking Associations
Board Unified Carrier Registration Board of Directors
California DMV California Department of Motor Vehicles
CMV Commercial Motor Vehicle
CTA California Trucking Association
CVSA Commercial Vehicle Safety Alliance
FMCSA Federal Motor Carrier Safety Administration
IFTA International Fuel Tax Agreement
IRP International Registration Plan
MCMIS Motor Carrier Management Information System
Missouri DOT Missouri Department of Transportation
NAICS North American Industry Classification System
NCSTS National Conference of State Transportation Specialists
NPTC National Private Truck Council
Pennsylvania PUC Pennsylvania Public Utility Commission
RPR Registration Percentage Reasonableness
SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation
Equity Act: A Legacy for Users
SSRS Single State Registration System
TCA Truckload Carriers Association
TIA Transportation Intermediaries Association
TRLA Truck Renting and Leasing Association
UCR Unified Carrier Registration
UCR Agreement Unified Carrier Registration Agreement
UPS United Parcel Service
II. Legal Basis for the Rulemaking
This rule involves an adjustment in the annual registration fees
for the Unified Carrier Registration Agreement (UCR Agreement)
established by 49 U.S.C. 14504a, enacted by section 4305(b) of the
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU) (119 Stat. 1144, 1764 (2005)). Section
14504a states that the ``Unified Carrier Registration Plan * * *
mean[s] the organization * * * responsible for developing,
implementing, and administering the unified carrier registration
agreement'' (49 U.S.C. 14504a(a)(9)) (UCR Plan). The UCR Agreement
developed by the UCR Plan is the ``interstate agreement governing the
collection and distribution of registration and financial
responsibility information provided and fees paid by motor carriers,
motor private carriers, brokers, freight forwarders and leasing
companies * * *'' (49 U.S.C. 14504a(a)(8)).
Congress in SAFETEA-LU also repealed 49 U.S.C. 14504 governing the
Single State Registration System (SSRS) (SAFETEA-LU section
4305(a)).\1\ The legislative history indicates that the purpose of the
UCR Plan and Agreement is both to ``replace the existing outdated
system [SSRS]'' for registration of interstate motor carrier entities
with the States and to ``ensure that States don't lose current revenues
derived from SSRS'' (S. Rep. 109-120, at 2 (2005)).\2\
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\1\ This repeal became effective on January 1, 2008, in
accordance with section 4305(a) of SAFETEA-LU and section 1537(c) of
the Implementing Recommendations of the 9/11 Commission Act of 2007,
Public Law 110-53, 121 Stat. 266, 467 (Aug. 3, 2007).
\2\ The Senate bill's provisions were enacted ``with
modifications.'' H.R. Rep. No. 109-203, at 1020 (2005) (Conf. Rep.).
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The statute provides for a 15-member Board of Directors for the UCR
Plan and Agreement (Board) to be appointed by the Secretary of
Transportation. The statute specifies that the Board should consist of
one individual (either the Federal Motor Carrier Safety Administration
(FMCSA) Deputy Administrator or another Presidential appointee) from
the Department of Transportation; four directors (one from each of the
four FMCSA service areas), selected from among the chief administrative
officers of the State agencies responsible for administering the UCR
Agreement; five directors from among the professional staffs of State
agencies responsible for administering the UCR Agreement, to be
nominated by the National Conference of State Transportation
Specialists (NCSTS); and five directors from the motor carrier
industry, of whom at least one must be from a national trade
association representing the general motor carrier of property industry
and one from a motor carrier that falls within the smallest fleet fee
bracket. The establishment of the Board was announced in the Federal
Register on May 12, 2006 (71 FR 27777). On July 19, 2007, FMCSA
published a notice announcing the reappointment to the Board of the
five Board members from the State agencies nominated by NCSTS (72 FR
39660). On June 30, 2008, FMCSA published a notice announcing the
reappointment of the members from the four FMCSA service areas to the
Board (73 FR 36956). On January 28, 2010, (75 FR 4521) FMCSA published
a request for public comments along with recommendations for
appointment of the five members from the motor carrier industry.\3\
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\3\ The terms of the current members from the motor carrier
industry have expired, but all but one continue to serve until
either they are reappointed or successors are appointed (49 U.S.C.
14504a(d)(1)(D)(iii) and (iv)).
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Among its responsibilities, the Board is required to submit to the
Secretary of Transportation \4\ a recommendation for the initial annual
fees to be assessed motor carriers, motor private carriers, freight
forwarders, brokers and leasing companies (49 U.S.C. 14504a(d)(7)(A)).
FMCSA is directed to set the fees within 90 days after receiving the
Board's recommendation and after notice and opportunity for public
comment (49 U.S.C. 14504a(d)(7)(B)). Subsequent adjustments to the fees
and fee brackets must be adopted following the same timelines and
procedures (recommendation by the Board and review and adoption by
FMCSA) after notice and an opportunity for public comment (Id). As
provided in 49 U.S.C. 14504a(f)(1)(B): ``The fees shall be determined
by [FMCSA] based upon the recommendations of the [UCR] Board * * *.''
The statute also directs both the Board and FMCSA to consider several
relevant factors in their respective roles of recommending and setting
the fees (49 U.S.C. 14504a(d)(7)(A), (f)(1) and (g)). Thus, FMCSA has
an obligation to consider independently the Board's recommendation in
light of the statutory requirements, and to make its own determination
of the appropriate fees and fee bracket structure, including modifying
the Board's recommendation, if necessary.
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\4\ The Secretary's functions under section 14504a have been
delegated to the Administrator of the Federal Motor Carrier Safety
Administration. 49 CFR 1.73(a)(7), as amended (71 FR 30833, May 31,
2006).
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III. Statutory Requirements for the UCR Fees
The statute specifies that fees are to be determined by FMCSA based
upon the recommendation of the Board. In recommending the level of fees
to be assessed in any agreement year, and in setting the fee level,
both the Board and FMCSA shall consider the following factors:
Administrative costs associated with the UCR Plan and
Agreement.
Whether the revenues generated in the previous year and
any surplus or shortage from that or prior years enable the
participating States to achieve the revenue levels set by the Board.
Provisions governing fees in 49 U.S.C. 14504a(f)(1).
[[Page 21995]]
Subsection (f)(1) provides that the fees charged to a motor carrier,
motor private carrier, or freight forwarder under the UCR Agreement
shall be based on the number of commercial motor vehicles owned or
operated by the motor carrier, motor private carrier, or freight
forwarder. The statute initially defined ``commercial motor vehicles''
(CMVs) for this purpose as including both self-propelled and towed
vehicles (former 49 U.S.C. 14504a(a)(1)(A) and 31101(1)). The fees set
in 2007, and applied, as well, in 2008 and 2009, were determined on
that basis. However, section 701(d)(1)(B) of the Rail Safety
Improvement Act of 2008, Public Law 110-432, Div. A, 122 Stat. 4848,
4906 (Oct. 16, 2008) amended the definition of CMV for the purpose of
setting UCR fees for years beginning after December 31, 2009, to mean a
``self-propelled vehicle described in section 31101 [of title 49,
United States Code]'' (49 U.S.C. 14504a(a)(1)(A)(ii)). Fees charged to
a broker or leasing company under the UCR Agreement shall be equal to
the smallest fee charged to a motor carrier, motor private carrier, and
freight forwarder.
Section 14504a(f)(1) also stipulates that for the purpose of
charging fees the Board shall develop no more than 6 and no fewer than
4 brackets of carriers (including motor private carriers) based on the
size of the fleet, i.e., the number of CMVs owned or operated. The fee
scale is required to be progressive in the amount of the fee. The
registration fees for the UCR Agreement may be adjusted within a
reasonable range on an annual basis if the revenues derived from the
fees are either insufficient to provide the participating States with
the revenues they are entitled to receive or exceed those revenues (49
U.S.C. 14504a(f)(1)(E)).
Overall, the fees assessed under the UCR Agreement must produce the
level of revenue established by statute. Section 14504a(g) establishes
the revenue entitlements for States that choose to participate in the
UCR Plan. That section provides that a participating State, which
participated in SSRS in the registration year prior to the enactment of
the Unified Carrier Registration Act of 2005 (i.e., the 2004
registration year), is entitled to receive revenues under the UCR
Agreement equivalent to the revenues it received in 2004. Participating
States that also collected intrastate registration fees from interstate
motor carrier entities (whether or not they participated in SSRS) are
also entitled to receive revenues of this type under the UCR Agreement,
in an amount equivalent to the amount received in the 2004 registration
year. The section also requires that States that did not participate in
SSRS in 2004, but which choose to participate in the UCR Plan, may
receive revenues not to exceed $500,000 per year.
Participating states are required by statute to use UCR revenue
``for motor carrier safety programs, enforcement, or the administration
of the UCR plan and UCR agreement'' (49 U.S.C. 14504a(e)(1)(B)). In
addition, as permitted by statute, at least one-third of the
participating states use the revenue produced by the UCR program to
provide their share of the costs of the Motor Carrier Safety Assistance
Program (MSCAP) that is not provided by a grant from FMCSA. The purpose
of the MCSAP grant program is ``to improve commercial motor vehicle
safety and enforce commercial motor vehicle regulations, standards, or
orders * * *'' (49 U.S.C. 31102(a)). The UCR revenues that contribute
to the MCSAP are used primarily for driver/vehicle inspections, traffic
enforcement, compliance reviews, public education and awareness, and
data collection. A great deal of the funding is used to pay state
employee salaries to conduct these activities.
Statutory Requirements for the Fees
The FMCSA acknowledges stakeholders' concerns regarding all the
factors under the statute that should have been considered when
determining the fees. For example, in response to the September 3,
2009, notice of proposed rulemaking (NPRM) the American Trucking
Associations, Inc. (ATA) and a number of other industry members and
associations assert that FMCSA has not considered all of the relevant
factors under the statute in considering the fees that should be set
for 2010 for the UCR Plan and Agreement. Specifically, ATA asserts that
the Agency should have considered: (1) The state of the economy; (2)
the effect of the fee increase on the trucking industry; (3) the
continuing failure of the States to audit and enforce UCR Agreement
requirements; (4) the effect on future collections of the elimination
of towed vehicles from the fleets; (5) the danger of spiraling fee
increases; and (6) the creation of a ``moral hazard'' by FMCSA's
acquiescence to an increase in the fees. However, only one of these
factors is specified expressly in the statute--the effect of the
elimination of trailers. The factors that FMCSA believes to be relevant
under the statute are addressed in more detail below. FMCSA will
address below several comments regarding the economic significance of
the rulemaking and the impact of the fees to industry. The Agency has
chosen to discuss these issues in the most relevant sections of the
rule, rather than in the section reserved for comments.
FMCSA's interpretation of its responsibilities under 49 U.S.C.
14504a in setting fees for the UCR Plan and Agreement is guided by the
primacy the statute places on the need both to set and to adjust the
fees so that they ``provide the revenues to which the States are
entitled.'' The statute links the requirement that the fees be adjusted
``within a reasonable range'' to the provision of sufficient revenues
to meet the entitlements of the participating States (49 U.S.C.
14504a(f)(1)(E), see also 49 U.S.C. 14504a(d)(7)(A)(ii)).
The legislative history accompanying the enactment of the statute
in 2005 confirms this primary focus on the need to provide the States
the revenue levels set in accordance with the statute:
States that currently participate in the SSRS and choose to
participate in UCRS [sic] would be guaranteed the revenues they
derived from SSRS during the last fiscal year ending prior to the
enactment of this Act. States that did not participate in SSRS but
opt to join UCRS [sic] would be entitled to annual revenues of not
more than $500,000. (H.R. Rep. 109-203 at 1019 (2005) (Conf. Rep.)
(emphasis added))
The emphasized words support FMCSA's interpretation of the statute,
which gives primacy to providing the revenue entitlements to the
participating States in each year.
Section 14504a(h)(4) gives additional support for this
interpretation. As noted in the comments by the Commercial Vehicle
Safety Alliance (CVSA), this provision explicitly requires FMCSA to
reduce the fees for all motor carrier entities in the year following
any year in which the depository retains any funds in excess of the
amount necessary to satisfy the revenue entitlements of the
participating States and the UCR Plan's administrative costs. No
analogous provision in the statute requires an increase in the fees in
the following year to make up for any shortfall in the revenues
provided by the fees.
In light of this context, FMCSA has interpreted the statutory text
that directs that any annual adjustment be ``within a reasonable
range'' to mean that the determination of what is reasonable must be
made in light of the statutory objective. Whitman v. American Trucking
Associations, Inc., 531 U.S. 457, 466 (2001) (``Words that can have
more than one meaning are given context, however, by their
surroundings.'') and FDA v. Brown & Williamson Tobacco Corp., 529 U.S.
120, 132 (2000) (``[T]he meaning--or
[[Page 21996]]
ambiguity--of certain words or phrases may only become evident when
placed in context.'') Therefore, if consideration of a factor
frustrates the statutory objective of providing the participating
States sufficient revenues, the statute does not permit FMCSA to
consider it as a relevant factor.
IV. Background
The initial UCR fees and fee structure were published by FMCSA on
August 24, 2007 (72 FR 48585), which allowed the Board to begin
collecting fees (49 U.S.C. 14504a). On February 1, 2008, the Board
submitted the 2008 recommendation to FMCSA, indicating that it was
``too early to ascertain whether the revenues collected in 2007 will
equal or approximate the total revenue'' to which the States are
entitled. A copy of this recommendation is provided in this docket. As
a result, on February 26, 2008 (73 FR 10157), FMCSA published
correcting amendments to the 2007 final rule, clarifying that the fees
and fee structure were established for every registration year unless
(and until) the Board recommended an adjustment to the annual fees (73
FR 10157). On July 11, 2008, the Board sent a letter to FMCSA stating
that the fees would remain the same for 2009 as for 2007 and 2008. The
Board stated that ``additional time to register entities, check that
carriers registered in the correct bracket, and establish effective
roadside enforcement'' would result in better collection of revenue. A
copy of this letter is provided in this docket. The table below shows
the fees and fee structure in place from 2007 to 2009.
Table 1--UCR Fees and Fee Structure 2007 to 2009
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Fee per entity
Number of CMVs owned or for exempt or
operated by exempt or non- non-exempt motor Fee per entity
Bracket exempt motor carrier, motor carrier, motor for broker or
private carrier, or freight private carrier, leasing company
forwarder or freight
forwarder
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B1.......................................... 0-2........................... $39 $39
B2.......................................... 3-5........................... 116 ................
B3.......................................... 6-20.......................... 231 ................
B4.......................................... 21-100........................ 806 ................
B5.......................................... 101-1,000..................... 3,840 ................
B6.......................................... 1,001 and above............... 37,500 ................
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From collection years 2007 to the present, some participating
States have achieved their revenue entitlement while others have
exceeded it. In the latter case, the excess amount is forwarded to a
depository established by the Board for distribution to those States
that have not collected enough fees to reach their entitlement (49
U.S.C. 14504a(h)(2) and (3)). However, overall, revenue collections in
2009, like the previous years, have fallen short. The following table
shows the amount of revenue shortfall for each registration year, based
on information provided by the Board. The participating States are
approximately 28 percent short of collecting their revenue entitlement.
TablE 2--UCR Registration Summary 2007 to 2009*
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State revenue Entities Revenue
Registration year entitlement registered Revenue received shortfall
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2007.................................... $101,772,400 237,157 $73,937,310 $27,835,090
2008.................................... 107,777,060 270,794 76,617,155 31,159,905
2009.................................... 107,777,060 282,483 77,148,988 30,628,072
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* Does not include estimated administrative expenses and revenue reserve that are included in the overall
revenue target.
In early 2009, the Board began discussions to address the shortfall
in the 2010 fee recommendation. On February 12, 2009, the Board held a
public meeting by telephone conference call to discuss the 2010 fees
and fee structure. At that meeting, a motion was made to recommend a
proposal that passed with a vote of 10 to 3, with one abstention. On
April 3, 2009, the Board submitted a recommendation based on this
proposal to the Secretary. The recommendation is available in the
docket.
Upon review by FMCSA, several fundamental issues were identified in
the assumptions of the April 3 recommendation. To clarify the issues
and assist the Board, FMCSA hosted a conference call on April 23, 2009,
with the Board's chair and the chair of the Revenue and Fees
Subcommittee. After this discussion, the Subcommittee met and discussed
several options at the May 14, 2009, Board meeting. No consensus was
reached. At the June 16, 2009, meeting, the Board discussed informal
options developed by a member of both the Board and the Revenue and
Fees Subcommittee. The Board voted to reconsider the April 3
recommendation upon hearing these new options, and the matter was
referred back to the Subcommittee for further action. At the July 9,
2009, meeting, a vote was taken on two new options. However, both
options received an equal number of votes; the Board was unable to
reach consensus on either proposal. On July 15, 2009, the Board sent a
letter to the Secretary noting this fact and asked FMCSA to proceed
with the rulemaking process using the April 3 recommendation. The
letter from the Board dated July 15, 2009, is available in the docket.
A. FMCSA Analysis of Board Recommendation
The Agency conducted its own analysis of the Board's formal
recommendation, as well as alternative fee proposals considered by the
Revenue and Fee Subcommittee of the Board. FMCSA concluded that it
could not base its fee determination on the Board's recommendation, and
made an independent analysis of two issues in particular: (1) ``bracket
shifting,'' i.e., motor carriers registering in a fee
[[Page 21997]]
bracket that is different from that based on the fleet size reflected
in MCMIS, and (2) the number of motor carrier entities that could be
expected to comply with the statute and register, and the related issue
of the States' level of enforcement. FMCSA carefully examined the
Board's entire fee recommendation, including its methodology and
specific findings. FMCSA also considered the factors specified in
SAFETEA-LU and utilized data and analysis provided by the Board in its
fee recommendation, as well as data from other sources. Based on its
independent analysis, FMCSA published an NPRM on September 3, 2009 (74
FR 45583), containing its own fee proposal.
FMCSA's NPRM described several alternative fee structures for 2010.
First, it noted a proposal informally supported by industry
representatives on the Board as the basis for fees in 2010 (described
in Table 4 in the NPRM (74 FR 45587)). This fee structure, like the
other fee structure evaluated by FMCSA, reflected the revised
definition of CMV consisting only of power units. However, it did not
incorporate any adjustments for bracket shifting and assumed full
compliance by active motor carriers based on an assumption that all
433,535 apparently active entities, as identified in MCMIS and
considered by the Board to be active, would register to pay fees in
2010.
FMCSA noted that experience over the 3 years of UCR's existence,
2007-2009, had shown that a significant proportion of motor carriers
were paying fees based on fleet sizes different from (and usually
smaller than) what would have been expected from the fleet sizes
reported to FMCSA. The net effect of this bracket shifting has been a
significant reduction in expected revenue (25.04 percent in 2008).
FMCSA concluded that bracket shifting, which can be appropriate under
the statute as explained in the NPRM, occurs because the available data
sources used to develop UCR fees and fee structure do not always
accurately predict actual registrations (74 FR 45589).
FMCSA also noted in the NPRM that States participating in the UCR
program sometimes have difficulty registering all of the motor carriers
that appear in the MCMIS database, even after certain filters have been
applied to identify motor carriers that have had recent activity and
are still most likely to be active. As FMCSA noted, the reasons for and
solutions to the level-of-compliance issues are matters of significant
disagreement between the States and industry representatives on the
Board. The States have taken the position that low compliance is due to
limitations in the MCMIS data that prevent identification of the
appropriate active population, even with the use of data filters,
combined with the reluctance of some industry members to register.
Industry representatives have taken the position that insufficient
State enforcement activities are to blame (74 FR 45591). FMCSA asked in
particular for public comment on the reasons for the low level of
compliance and on potential solutions to determining the reasonableness
of the compliance and enforcement activities by the States, including
how they would support a reasonable adjustment in the current fees (74
FR 45591).
B. Compliance and Enforcement
FMCSA concluded that a compliance rate of 100 percent is not
feasible. However, the Agency did agree with the concept of setting
fees based on an assumption of significantly improved compliance and
enforcement activities by the States. Thus, the fees proposed in the
NPRM were set assuming that participating States would achieve a
compliance rate of 90 percent. Because ten non-participating States do
not receive revenues from the UCR Plan, FMCSA assumed that they would
have less incentive to exert effort on enforcement. However, in FMCSA's
opinion, improved roadside enforcement by participating States, to
capture potential registrants from non-participating States when they
cross borders into participating States, would improve compliance rates
among carriers from non-participating States to approximately 59
percent. The Agency therefore based its fee proposal on a weighted
average projected compliance rate of 86.42 percent.\5\
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\5\ This weighted average projected compliance rate has been
slightly adjusted for this final rule.
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C. Bracket Shift
FMCSA estimated the effects of bracket shifting and, in doing so,
recognized that carriers with different fleet sizes pay different fees
and that compliance rates vary by carrier size. The Agency's proposal
takes into account the effect of increased registration rates, due to
anticipated improvements in compliance and enforcement, on revenue
collection. This adjustment assumed that the carriers that remain non-
compliant despite increased enforcement efforts would have somewhat
smaller fleet sizes and the new registrants registering as a result of
increased enforcement efforts would have larger fleet sizes.
Finally, FMCSA noted that, without any other changes, each fee
would need to be adjusted to take into account the elimination of
trailers from the definition of CMV, which reduces many carriers'
fleets. As the Agency noted, ``even with full compliance and no bracket
shift, existing fees would be inadequate and would have to be increased
to meet each State's revenue requirement'' (74 FR 45592). Therefore,
after factoring in compliance improvements and bracket shifting, FMCSA
concluded that the 2009 fees must be increased by a factor of 2.22 to
establish the fees for 2010 proposed in the NPRM. FMCSA concluded that
those fees would provide the revenues to which the participating States
are entitled. The Agency found that the proposed fees were based on a
reasonable estimate of the number of active motor carriers subject to
the UCR fees; reflected the statutory change in the definition of CMV;
addressed bracket shifting; and set reasonable targets for compliance
by the motor carrier industry to encourage enhanced enforcement efforts
by the participating States (74 FR 45595). The proposed 2010 fees as
shown in the NPRM are presented in Table 3.
[[Page 21998]]
Table 3--Fees Under The Unified Carrier Registration Plan and Agreement Proposed for Registration Year 2010
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Fee per entity
Number of CMVs owned or for exempt or
operated by exempt or non- non-exempt motor Fee per entity
Bracket exempt motor carrier, motor carrier, motor for broker or
private carrier, or freight private carrier, leasing company
forwarder or freight
forwarder
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B1.......................................... 0-2........................... $87 $87
B2.......................................... 3-5........................... 258 ................
B3.......................................... 6-20.......................... 514 ................
B4.......................................... 21-100........................ 1,793 ................
B5.......................................... 101-1,000..................... 8,541 ................
B6.......................................... 1,001 and above............... 83,412 ................
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V. Discussion of Comments on the NPRM
The statute established a 90-day time period for FMCSA to set UCR
fees and fee structure following receipt of a recommendation from the
Board. Because of this statutory limit, FMCSA initially set the time
period for public comment at 15 days, concluding on September 18, 2009.
On September 18, the Agency published a notice extending the comment
period for an additional 10 days, to September 28, 2009 (74 FR 47912).
A. Number and Description of Commenters
FMCSA received over 150 comments on the proposed rule from a wide
variety of sources. Comments (including some filed late) were received
from 114 industry members, nearly all of whom registered opposition to
the proposed fees. In addition, 22 industry associations submitted
comments. In general, they also opposed the fees proposed by FMCSA.
Sixteen State agencies and two State associations commented, nearly all
in support of the fee proposal.
B. Comments Favoring the Proposal
Comments
Fifteen State agencies, including the Alabama Public Service
Commission, Colorado Public Utilities Commission, Illinois Commerce
Commission, Kansas Corporation Commission, Kentucky Transportation
Cabinet, Massachusetts Department of Public Utilities, Michigan Public
Service Commission, Missouri Department of Transportation, New Mexico
Public Regulation Commission, New York State Department of
Transportation, North Dakota Department of Transportation, Oklahoma
Corporation Commission, Pennsylvania Public Utility Commission,
Washington Utilities and Transportation Commission, and the West
Virginia Public Service Corporation, expressed strong support for the
fee proposal in the NPRM. Many of the public agencies submitted
essentially identical comments, stating that FMCSA had taken into
account the three key points that needed to be addressed for a new fee
structure: (1) The removal of towed units for purposes of determining
fleet size, which by itself would require a fee increase by a factor of
1.61; (2) bracket shift, resulting in an approximately 26 percent
decrease in revenues; and (3) the level of State enforcement efforts to
address non-compliance. These commenters argued that ``the net effect
of `bracket shift' and the exclusion of trailers have had a much
greater impact on the need for a fee increase than has non-
compliance.'' In addition, the Alabama Public Service Commission
(Alabama PSC) commented that UCR collections and revenue had increased
each year and, considering that the UCR program was only celebrating
its second anniversary in September 2009, its progress to date had been
``commendable.''
Two associations, the National Conference of State Transportation
Specialists (NCSTS) and the Commercial Vehicle Safety Alliance (CVSA),
also supported the proposed fee structure. CVSA stated that the
proposal represents the best method for reaching the goal of revenues
equal to those received under the SSRS. CVSA noted that, despite the
fee increase, the carriers in the top bracket would still pay far less
than they would have paid under SSRS. CVSA also commented that the UCR
program does not allow for a ``revenue windfall,'' meaning that if
revenues exceed the target, FMCSA would be obligated to adjust the fees
downward for the following year. CVSA stressed that the new fee
structure needed to be issued effective no later than November 15,
2009, to preclude additional shortfalls. Finally, CVSA commented that
the fee structure for Registration Years 2008 and 2009 worked to the
industry's benefit because the Board did not recommend a fee increase
despite revenue shortfalls.
One motor carrier approved of the fee proposal because it would
benefit owner-operators and small trucking companies, largely due to
the statutory change in the CMV definition removing trailers for UCR
registration and by applying a fee from a lower bracket, even with the
increased fee from that bracket. Although they did not support the fee
proposal, the American Trucking Associations (ATA) and the
Transportation Intermediaries Association (TIA) both supported the
State revenue entitlement submitted for FMCSA approval with the Board's
recommendation. ATA also described FMCSA's use of MCMIS data to
determine the overall motor carrier population as ``unobjectionable''
and added, ``The underlying data may not be all it should be, but
anyone working in this area must begin with it.''
Response
FMCSA continues to agree that the statutory change in the
definition of motor vehicle (a part of the population factor), bracket
shifting, and the registration compliance rate (the enforcement factor)
are essential factors to consider in the fee calculation methodology.
FMCSA also agrees with ATA's comment that MCMIS data is the starting
point for determining the appropriate carrier population. However, the
Agency also understands the limitations to using MCMIS, which is a
self-reporting system that was not designed for UCR purposes. (See
Section V (C)(4) below for additional discussion.)
Finally, FMCSA also recognizes that those carriers that were
subject to the SSRS program will generally pay less under the 2010 fee
structure than they did under SSRS. More importantly, the UCR Plan
cannot over-collect the fees. To the extent that it collects more than
its target revenue amount, the fees
[[Page 21999]]
would be required to be reduced for 2011 to reflect the over-
collection.
Consideration of Three Key Factors
Removal of Trailers From Fee Calculation
Comments
Many of the State agencies that supported the proposed fees filed
an identically worded comment stating that because towed units are no
longer part of the equation for purposes of determining fleet size,
this factor alone would result in a need for the fees to increase by a
factor of 1.61. The Missouri Department of Transportation (Missouri
DOT) said that fee adjustment was necessary to account for the change
in definition of CMV, noting that Missouri could expect a 38.7 percent
decline in revenue collection from companies dropping into lower
brackets as a result of the changed definition.
Many industry members acknowledged that it would be necessary to
adjust the fee in response to the statutory change to the definition of
CMV, but opposed any further adjustment. State commenters were
generally opposed to this limited approach, arguing that it would cause
a decrease in revenue.
Response
See Section V(C)(7) below for additional discussion.
Bracket Shift
Comments
State agencies and associations argued that it was necessary to
account for bracket shift in developing the UCR fees because the
statute allowed motor carriers to exclude from their count of vehicles
subject to UCR fees those commercial vehicles not involved in
interstate or international commerce and because UCR does not apply to
certain vehicles below certain weight ratings. Thus, the net effect of
motor carriers shifting upward or downward in brackets was roughly 26
percent less revenue than if the fleet size registered in MCMIS had
been used to determine UCR fees. The Pennsylvania PUC said that self-
certification by carriers will ``inevitably result in bracket shift,''
and that FMCSA had properly included this factor in its fees
calculation.
Response
FMCSA agrees that the net effect of bracket shifting has had a much
greater effect on revenues than had been originally anticipated. By
statute, motor carriers are allowed to exclude portions of their fleets
from UCR registration. The inherent discrepancy between the number of
vehicles in MCMIS and the number of CMVs that carriers may lawfully
include in their fleet sizes for UCR purposes inevitably results in
bracket shift independent of the fee calculation methodology used.
See Section V(C)(4) below for additional discussion.
Improved State Enforcement Efforts
Comments
Some State agencies commented that they have had to identify the
universe of entities subject to the program and then to educate
thousands of motor carriers, motor private carriers, leasing companies,
freight forwarders, and brokers that were not subject to the SSRS but
are now subject to UCR fees. The commenters agreed that States will
need to do more to improve overall compliance. They noted that, under
the NPRM, approximately 66,000 additional entities will have to be
registered into the UCR for 2010 to achieve the revenue goal, and that
this will require States to improve compliance nationally by about 15
percentage points to reach the compliance goal of 86.42 percent.
Several of the States, such as Illinois, Massachusetts, and Michigan
also described increased enforcement and educational activities they
have undertaken and the results they produced.
Response
FMCSA is encouraged to learn of the States' improved enforcement
efforts. However, the Agency encourages more States to register
entities for UCR at the same time as they renew registrations
(including those for the International Registration Plan (IRP)), obtain
International Fuel Tax Agreement (IFTA) credentials, and make excise
tax filings. FMCSA urges States to work closely with FMCSA Division
Offices to leverage pre-existing targeted enforcement efforts, as well
as to improve data integrity issues, to make mass mailings and
notifications more effective. Finally, FMCSA believes that the success
of the UCR fee program depends on the Board working with States to
develop outreach strategies and best practices for educating and
registering carriers. (See the additional discussion in section
V(C)(2)).
C. Comments Opposing the Proposal
Comments
Motor carriers and associations representing carriers submitted
several comments that expressed general opposition to the fee proposal,
based on a wide variety of arguments. The American Moving & Storage
Association (AMSA) strongly opposed the fee proposal as ``excessive,
inappropriate [and] unwarranted.'' United Parcel Service (UPS) said the
proposed fees represented an ``unreasonable rate of increase.'' The
Truckload Carriers Association (TCA) opposed the proposal because it
would ``negatively affect the motor carrier industry in order to
subsidize both non-compliant motor carriers and the states that will
not put forth the effort to increase UCRA [UCR Agreement] compliance.''
TIA called FMCSA's analysis flawed. ATA and TIA both faulted the NPRM
for giving an impression of ``illusory precision.'' They argued that
``the unwarranted show of accuracy covers much guesswork and some
arbitrary assumptions.''
Response
As discussed in Section III above, the Agency has to recognize and
implement its primary statutory mandate to enable States to achieve
their revenue entitlement. Unfortunately, many of the comments
expressing general opposition to the fee adjustment did not address the
important issues. General statements of opposition do not present
compelling arguments about the Agency's statutory mandate. Similarly,
specific objections do not address the relevant statutory factors the
Agency must consider. A more detailed discussion of those contentions
and FMCSA's responses, follows below.
1. Increase Too Large Under Current Economic Conditions
Comments
One of the most common arguments against the proposed fees, made by
over one hundred commenters, including many carriers, was that fees
should not be increased because the trucking industry is suffering from
the current economic downturn. Industry members commented that fee
increases might force them to lay off drivers, sell trucks, or even go
out of business. A number of associations and individual carriers
complained that FMCSA failed to consider the condition of the economy
and the ``devastating effect'' the fees increase would have on the
trucking industry, trucking employment and services and even the
survival of some trucking companies. AMSA commented that FMCSA had not
appropriately considered the fact that household goods movers have
faced a decline in both demand and revenue, forcing many such carriers
to go out of business. Commenters also complained that shipping rates
have declined significantly, putting additional economic pressure on
the industry.
[[Page 22000]]
ATA and TIA commented that the recession has hit the trucking industry
far worse than many other industries. ATA stated that for-hire
truckload revenue has plummeted and that for-hire trucking employment
is at its lowest level in 14 years. The California Trucking Association
(CTA) also opposed the fee proposal, citing declining freight volumes,
a number of recently adopted regulations affecting carriers in the
State, higher diesel prices, and pressures to increase fuel taxes.
Response
FMCSA does not agree with the numerous commenters who asserted that
the proposed rule represents too large an increase to be considered
reasonable under current economic conditions. As discussed in Section
III above, the statute does not permit FMCSA to consider as relevant in
determining whether an adjustment in the UCR fees is ``within a
reasonable range,'' any factor that frustrates the primary purpose of
providing sufficient revenues for the participating States. Current
economic conditions are one such factor.
Nonetheless, FMCSA does not believe that the 2010 fees will have a
significant economic impact on affected carriers.\6\ In 2007, for
example, the trucking industry generated revenue of $228,907 million.
With an estimated inventory of 1,183,000 vehicles generating revenue,
that total represents average revenue of $193,000 each.\7\ Under the
fees for Registration Years 2007-2009, in which the maximum fee per
motor vehicle was $39, the fee accounted for no more than 0.02 percent
(that is, 1/50th of 1%) of revenue. The 2010 fees (a maximum of $76 per
power unit) represent less than about 0.04 percent (1/25th of 1%) of
revenue per power unit. The increase in fees is thus only 0.02 percent
of revenues--about a fifth of a tenth of 1 percent. This increase is
very small even relative to the revenues of extremely small carriers.
---------------------------------------------------------------------------
\6\ In the Regulatory Analysis and Notices section below, FMCSA
complies with applicable regulatory policies to determine that this
final rule is not economically significant. That determination rests
on a different standard than the statutory factors discussed in this
section.
\7\ http://www.census.gov/svsd/www/services/sas/sas_data/48/2007_NAICS48.xls.
---------------------------------------------------------------------------
Data on receipts for individual proprietorships in the North
American Industry Classification System (NAICS 484--Truck
Transportation)--which are assumed to represent the smallest carriers--
show yearly revenue averaging $82,269.\8\ The increase of $37 in the
fee for one motor vehicle from $39 under the 2007-2009 fees to $76 for
2010 is an increase of only 0.045 percent, or little less than half of
a tenth of one percent of the average individual proprietorship
carriers' revenue. Moreover, the $37 difference between the 2009 and
2010 fees comes to less than 15 cents per day for a truck used 5 days a
week for 50 weeks per year. Even if current revenue levels have been
reduced by current economic conditions, the fee increase is very small
in relation to such revenues.
---------------------------------------------------------------------------
\8\ http://www.census.gov/econ/nonemployer/index.html.
---------------------------------------------------------------------------
A critical point that many commenters ignore is that a significant
portion of the $37 fee increase in the first bracket is due solely to
the change in the definition of a CMV. That change alone requires an
increase of about 62 percent, or $24. The remainder, which is only $13,
is less than a hundredth of 1 percent of industry average revenue per
power unit, two-hundredth of 1 percent of the average revenues of an
individual proprietorship, or 5 cents per power unit per day. For the
largest carriers this increase has an even lower per-unit effect.
2. State Compliance and Enforcement
a. Responses to NPRM Questions on Compliance
Question One: FMCSA requested public comment on the reasons for the
low level of compliance.
Comments
The Alaska Trucking Association noted that, according to FMCSA,
only 28 out of 41 participating States actively engage in roadside
enforcement. The commenter expressed doubt that there is any
enforcement in the 10 non-participating States. Since there is no
incentive for non-participating States to conduct UCR enforcement, the
commenter concluded there is unlikely to be any enforcement in the
future in those States. Therefore, the reason for the current low level
of compliance is that ``if there is no reasonable expectation of
getting caught, there is no incentive to comply.''
The Alabama PSC supported the 90 percent registration compliance
factor and noted that ATA had erroneously stated it in its comments as
80 percent. It said that it had made progress working with FMCSA to
improve the data on potential registrants, but work still remained to
be done. It is unreasonable, Alabama PSC argued, to expect the States
to achieve 100 percent compliance when the Federal data upon which they
rely are not 100 percent reliable. Alabama PSC would support a higher
registration compliance factor for non-participating States than the 59
percent proposed by FMCSA, noting that four of the nine non-
participating jurisdictions in the continental U.S. had already
achieved this level of registration for 2009 (VT, NJ, OR, and AZ).
Alabama PSC suggested a factor of 65 to 75 percent.
The Pennsylvania PUC stated that it believes the current compliance
rate is a reflection of various factors, including a potentially
inaccurate carrier population number, the ability of property carriers
to omit vehicles used solely in intrastate commerce, as well as
available enforcement and compliance tools. Pennsylvania agreed with
FMCSA that the compliance rate is higher for larger carriers.
California Department of Motor Vehicles (California DMV) noted that
UCR does not require State participation. Participating States retain
only that amount of the collected UCR fees that equals what they
previously collected under SSRS. Thus, California collected its
entitlements in both 2008 and 2009 and sent $300,000 each year to the
UCR repository for distribution to other States. Because, according to
California DMV, UCR prohibits the States from collecting any intrastate
fees from a carrier that pays UCR fees, California would lose over $7
million in intrastate revenues if California pursued all UCR-defined
interstate carriers. This dynamic occurs for any State that exceeds its
UCR revenue cap or collects intrastate fees. Another reason for non-
compliance, California DMV explained, is that ``carriers do not know
they are non-compliant because they think they are intrastate. A
massive compliance effort would be required to pursue and convince
these carriers to pay with little incentive for the States to do so
because of their capped revenue amounts and their loss of intrastate
fees when the carriers do pay UCR.''
California DMV also noted that before UCR was enacted carriers
could enter information into MCMIS without fear of consequences, since
no credentials or payments were linked to MCMIS filing with respect to
numbers of vehicles and whether or not a carrier was interstate.
Finally, California DMV pointed to the weak compliance efforts of non-
participating States, which may enforce on carriers crossing into their
States, but do little to enforce on any of their own intrastate
carriers who meet the UCR definition of interstate.
The Missouri DOT also said it had identified a number of companies
within the non-compliant group that were operating only within the
State borders in intrastate commerce, out of business, not currently
operating, non-compliant in one or more State motor
[[Page 22001]]
programs (IFTA, IRP, Over Size/Over Weight (OSOW), Operating
Authority), or placed out-of-service. However, getting these changes
into the MCMIS system is difficult and sometimes impossible. If
Missouri could exclude these companies the State's compliance rate
would be 87.5 percent.
CVSA cited two reasons for the expected revenue shortfall, the
prospective change in definition of CMV and bracket shift, and argued
that lack of enforcement by the States was not a major cause of the
shortfall. CVSA contended that the States have stepped up efforts to
enforce the program; and, as of September 2009, the compliance rate had
reached 72 percent. CVSA noted that early in the program's life an
outreach effort was necessary to inform carriers that were not required
to pay under SSRS that they were covered by UCR. In addition, CVSA said
it was important to note that UCR does not have an enforcement mandate
and as a result no nationwide enforcement standard has been promulgated
in rulemaking. In addition, there is no statutory requirement for a UCR
credential to be carried on board trucks. CVSA also noted that
inaccurate information in the carrier population database had impeded
collection efforts. Lists of carriers obtained from MCMIS were not
current and in some cases led to a 25 percent or greater return rate
for registration fee notices. States have had to purge the lists of
carriers that no longer exist.
Several other comments addressed compliance and how to improve it.
One pointed out that Connecticut and New Hampshire are requiring proof
of UCR compliance to renew a registration or obtain IFTA credentials.
Response
FMCSA specifically takes issue with California DMV's assertion that
it has a net loss of $5 million because UCR prohibits the States from
collecting any intrastate fees from a carrier that pays UCR fees. In
FMCSA's view, this loss of revenue occurs because of the stand-alone
preemption provisions of 49 U.S.C. 14504a(c) that are not linked to
registration and payment of fees to the UCR Plan and Agreement. In
other words, section 14504a(c)(1) precludes any State requirement for
payment by interstate motor carriers and interstate motor private
carriers (as defined there) of any of the fees there specified. It
seems that California would lose these revenues regardless of the
payment by those carriers of UCR fees; otherwise, California could
rectify this situation by withdrawing from the UCR Plan under 49 U.S.C.
14504a(e)(3) and (4), which it obviously has not done. Other issues
raised by the commenters are addressed in sections V(C)(4), V(C)(5),
V(C)(6) and V(C)(7).
Question Two: FMCSA requested public comment on determining the
reasonableness of the States' enforcement efforts.
Comments
The Alaska Trucking Association stated that ``at the least'' a
participating State should demonstrate an ongoing effort to register
and collect fees, both administratively and through enforcement. The
commenter also said that non-participating States need to have some
incentive to perform enforcement.
Several States described their current efforts to improve
enforcement. They included assisting each other to reach the collective
registration compliance goals by developing a communication system to
alert each State of new concerns and sharing ``best practices.'' The
Illinois Commerce Commission noted that the State had fulfilled its
commitments in the UCR State Participation Agreement, registering
17,523 carriers and achieving a 90 percent registration percentage of
all ``UCR universe'' carriers in Federal database records, and issuing
over 1,000 citations in the past 12 months. Massachusetts reported that
for the past 3 years it had conducted focused enforcement events with
the Massachusetts State Police, and had worked with FMCSA on data
integrity issues. The Pennsylvania PUC argued that any attempt to
increase the compliance rate should recognize the economic realities of
enforcement among the small fleet carrier population.
California DMV recommended three actions that would require a
legislative change to the UCR Agreement. It also suggested a fourth,
altering the definition of ``interstate carrier'' to match the IRP
definition (which it believed would not require a statutory change) and
using the IRP database to calculate the UCR fee structure.
Missouri argued that using a compliance rate based on the number of
companies registered is not the correct compliance tool to use.
Missouri's current 79.6 percent compliance rate accomplishes a
collection rate of 90.7 percent of the fees that the State believes
should be collected under the program in the State. In addition, 54
percent of Missouri's non-filers are in bracket 1 or bracket 2. Without
a change in the compliance measure, the State could be required to
spend more in resources to collect a small amount of revenue.
Kentucky noted that the State had 82 percent compliance for 2008
and 87.98 percent compliance for 2009. However, over the past 3 years,
Kentucky had a shortfall of approximately $11 million due to the new
UCR program and the need to educate motor carriers about the new
registration program.
Response
FMCSA notes that State agencies generally support the proposed
compliance rates. However, some expressed concern that the lower rate
of 59 percent compliance for non-participating States would not be
adequate and would favor an increase.
FMCSA agrees with State comments that the difficulty in obtaining
UCR compliance is a reflection of various factors, such as the ability
of carriers to omit CMVs for various reasons, lack of a requirement for
States to participate in UCR, the difficulty of obtaining compliance
from non-participating States, and the lack of a requirement for the
UCR entity to carry a credential. Absent statutory changes that would
address these issues, FMCSA believes that compliance by carriers from
non-participating States will continue to be problematic and,
therefore, the Agency is not increasing its estimate of the non-
participating State compliance rate.
b. Comments on Inadequate State Compliance and Enforcement Efforts
Comments
A number of commenters opposed increasing UCR registration fees,
alleging that the States have not undertaken adequate enforcement
measures to ensure compliance. A number of commenters stated that fees
should be raised only after the States have achieved adequate
compliance. ATA and TIA commented that neither FMCSA nor NCSTS has
recognized how significantly non-compliance has contributed to revenue
shortfalls, alleging that 19 participating States have not registered
at least three-quarters of the carriers based within their borders. ATA
and TIA further commented that non-compliance or evasion is likely a
major cause of bracket shift, but because States have not performed any
audits, it is unclear. Another commenter said that FMCSA had erred in
treating bracket shift and non-compliance as separate subjects. The
commenter argued that enforcement of accurate carrier registration
would have a significant impact on the amount of fees collected.
ATA and TIA said that FMCSA had set an arbitrary and capricious
standard
[[Page 22002]]
for State enforcement efforts in developing the proposed fees. ATA and
TIA said that FMCSA made ``a great show'' of including a compliance
factor, but this must be discounted heavily because the fees proposed
by the NPRM are almost exactly the same as those recommended to the
Secretary in February, 2009. The TCA argued that, although 100 percent
compliance was unlikely, it should be the goal of the program and that
there should be no increase until the States make a good faith effort
to register non-compliant entities.
One commenter urged greater emphasis on ticketing or fining non-
compliant carriers when discovered in roadside or scale inspections.
Another said that UCR registration should be made part of the annual
vehicle registration, like the Heavy Vehicle Use Tax, and should
require proof of compliance before the vehicle can be registered.
The National Private Truck Council (NPTC) and the Truck Renting and
Leasing Association (TRALA) faulted the Board and FMCSA for not
developing audit procedures. The Louisiana Motor Transport Association
(LMTA) complained that States were not required to demonstrate that
they could effectively and efficiently administer the program as a
condition of participation. LMTA suggested that States must first make
all efforts to collect outstanding revenue prior to requesting an
increase in fees. The Specialized Carriers & Rigging Association
(SC&RA) also commented that the States have not done a good job of
enforcement, with 19 of the UCR States and all 12 of the non-
participating States failing to require registration and payment of the
fees.
Response
FMCSA agrees that State enforcement activities, and the levels of
compliance with UCR registration requirements by the motor carrier
industry, directly affect the States' revenue, and are therefore
relevant factors for consideration. The Agency's proposal, as set out
in the NPRM, clearly expects an increase in the level of enforcement in
order to produce an increase in compliance (74 FR at 45592-93). The
Agency recognizes that participating States have made improvements in
collection rates as enforcement activity has increased. Based on the
State reports at the Board meetings and data available in MCMIS, FMCSA
believes that the States have been making a ``good faith effort'' to
address compliance and enforcement issues. The most recent data from
MCMIS show that for the first 10 months of 2009, 42 States have issued
21,223 citations to motor carrier entities for not registering with the
UCR Plan. This is a significant improvement over the 7,995 citations
issued by 33 States during the entire previous year of 2008. This is
clear evidence of an increased level of enforcement activity by the
States, and compliance by motor carrier entities has improved
accordingly.
However, the data also show some disparity in the level of activity
by the various States, including a few participating States that are
apparently not issuing roadside citations to unregistered motor
carriers and other entities. For that reason, the Agency's fee proposal
reflects an expectation that the participating States as a whole will
need to register 90 percent (not 80 percent, as incorrectly stated by
ATA) of the entities required to register in those States in order for
the revenue entitlements to be achieved. To meet that level, FMCSA
believes that all of the participating States must, and will, increase
enforcement activities. This includes roadside enforcement and audits,
as well as outreach activity with the essential support of the
industry, to make sure that all motor carrier entities subject to the
UCR registration requirements are aware of and comply with them.
The situation in the non-participating States, however, is more
complex. As indicated in the NPRM, those 10 States cannot receive
revenues from the UCR Plan and thus have no apparent financial
incentive to conduct enforcement within their jurisdictions.\9\ Several
commenters urged the UCR Plan and FMCSA to take steps to improve
compliance by motor carrier entities in the non-participating States.
---------------------------------------------------------------------------
\9\ Data available to FMCSA from MCMIS, if correct, shows that a
few non-participating States are issuing a very small number of
citations and, presumably, collecting fines for not registering with
the UCR Plan, even though it is not entirely clear that non-
participating States have authority to issue them. Cf. 49 U.S.C.
14504a(i)(4).
---------------------------------------------------------------------------
FMCSA has no direct authority to enforce UCR compliance, and
participating States are limited in their ability to enforce against
carriers based in non-participating jurisdictions.\10\ That said,
increasing roadside enforcement efforts (as described above) should
improve compliance by motor carriers and other entities from non-
participating States. Regardless, this only captures those carriers
that operate CMVs into participating States. Participating States are
very limited in their ability to capture interstate carriers based in
non-participating States that do not carry property or passengers into
a participating State. As CVSA noted in its comments, industry
cooperation, such as publication of information in the trade press
about UCR, is vital to the success of the UCR program, and could assist
in increasing compliance by entities in the non-participating States.
The 2010 fee structure adopted here requires participating States to
increase compliance rates for motor carrier entities based in non-
participating States in order to achieve the revenue entitlements.
Nonetheless, two factors must be addressed (the change in definition of
vehicle and bracket shift) that are and will be the primary reasons for
UCR Agreement revenue shortfalls, and not lack of compliance.
---------------------------------------------------------------------------
\10\ Hawaii is one of the ten non-participating States. However,
section 701(d)(1)(C) of the Rail Safety Improvement Act of 2008,
Public Law 110-432, Div. A, 122 Stat. 4848, 4906 (Oct. 16, 2008)
amended the statute so that Hawaiian motor carriers not transporting
household goods (which number only a few hundred) are not required
to register with the UCR Plan. 49 U.S.C. 13504 and
14504a(a)(5)(A)(ii). This will further reduce the number of entities
from non-participating States that will register.
---------------------------------------------------------------------------
3. Increased Fees Should Not Fall on Compliant Entities/Fees Unfair
Comments
Many commenters, including numerous individuals and carriers,
stated that raising the fees as proposed is unfair because it increases
the burden on compliant carriers to the non-compliant carriers'
benefit. The Minnesota Trucking Association commented that increasing
fees only for the compliant carriers raised basic questions of fairness
and not only rewards bad behavior, but also creates a competitive
advantage for the offenders in terms of liquidity and cash flow. Some
commenters stated that companies that are not complying with the UCR
are using the money saved to help maintain positive cash flow, while
those in compliance are suffering. The California DMV commented that
the fees must apply to all with a reasonable expectation of compliance.
ATA and TIA said that the failure of the States to enforce UCR
Agreement requirements is the major reason for its opposition to the
proposed fee increases. The absence of serious State enforcement
efforts, in particular the lack of State audits of UCR Agreement
compliance, calls into serious question FMCSA's asserted basis for the
increases. The Alaska Trucking Association commented that, by accepting
the premise that it was ``unreasonable to expect the States to register
and collect fees from all potential registrants,'' both the Board and
FMCSA have endorsed a fundamentally unfair fee structure that
[[Page 22003]]
will cause more and more potential registrants to become non-compliant.
The Alaska Trucking Association recommended no fee increase until the
States make a solid commitment to enforce registration and the payment
of fees. Similar arguments were made by the Snack Foods Association and
AMSA, which expressed concern that the unprecedented large increase in
fees will result in increased non-compliance.
Some commenters, in addition to those who stressed the unfairness
of assessing fees against the compliant carriers to the benefit of the
noncompliant carriers, raised other fairness issues. One truck operator
argued he should not be required to pay higher fees because trailers
were no longer counted toward the fees assessed other companies.
Another said that removing the fees for trailers is not a tradeoff and
that smaller carriers will end up paying more than twice as much. The
American Bus Association disagreed with FMCSA that the proposal in the
NPRM is a compromise fair to all parties. The doubling of fees, by
itself, makes the proposal unfair, but the disproportionate effect on
the compliant carriers also makes it unjust.
Two California truckers noted that none of California's neighboring
States participate in the UCR program and that no agency in those
States enforces enrollment by interstate truckers, placing California
carriers at a competitive disadvantage. Additional fee increases will
only increase this disadvantage, they said. One of these commenters
also noted that because California already recoups its UCR Agreement
entitlement, all additional fees received are distributed to States
with shortfalls and do not benefit California carriers. The CTA echoed
comments critical of California's participation in the program, arguing
that States meeting revenue goals should not be punished. The CTA
commented that California carriers would experience a net loss from the
fees proposed due to potential job losses and a decrease in freight
movement. Any increase of UCR fees ``to account for other states'
safety program funding shortfall adds another layer to an already
unlevel playing field.''
The comments from the States indicated that compliance has been
increasing as enforcement activity has increased. NCSTS, joined by
several participating States, reported that registration for 2009 had
increased to 307,767 carriers. Alabama PSC claimed that 2009
registrations had increased to ``over 310,000.'' In addition, the
Pennsylvania PUC and Missouri DOT both noted that FMCSA was correct
that the compliance rate (calculated as the number of carriers
registered under the UCR plan divided by the total number of carriers
that should potentially register) is not synonymous with the actual
revenue collection rate (calculated as the actual revenue collected
divided by the targeted revenue amount). The FMCSA's Registration
Percentage Reasonableness (RPR) factor is a reasonable compliance
target, Pennsylvania stated; and FMCSA ``reasonably approximated the
effect of the increased compliance goal on targeted revenue.''
Response
FMCSA does not agree that the 2010 fee structure unfairly burdens
compliant carriers. In developing the fees proposed in the NPRM, FMCSA
determined that the levels of both State enforcement and carrier
compliance are relevant factors to consider because they directly
affect States' ability to achieve their revenue entitlement. Although
the Board's recommended fees were based on the population of previously
compliant carriers, FMCSA specifically rejected this approach. Under
the 2010 fee structure FMCSA proposed, the Plan will not reach the
overall revenue target unless the States improve compliance by
increasing enforcement efforts and registering a significantly greater
number of unregistered carriers.
Furthermore, the data show that compliance has improved with each
year that the UCR Agreement has been in effect, as shown in Table 2 in
the NPRM (74 FR 45586). New data made available to the Agency since the
NRPM was published show that registrations have increased to 276,286
carriers for 2007, 299,908 carriers for 2008, and 314,456 carriers for
2009, all improvements over the registration levels shown in Table 2 of
the NPRM. Recent enforcement activity has apparently captured entities
that should have registered in previous years as well as the current
year. More recent data also show a clear improvement in compliance
rates. Compliance rates for 2008 registrations in both participating
and nonparticipating States, as of March and September 2009, are shown
in the table below.
Table 4--UCR Registration Compliance Rates--2008 Registration Year
------------------------------------------------------------------------
As of
As of March September
2009 2009
------------------------------------------------------------------------
Non-Participating States...................... 40.45% 42.22%
Participating States.......................... 66.28% 74.14%
All States.................................... 62.51% 69.48%
------------------------------------------------------------------------
Registration totals for both categories of all States and all
participating States include registrations by Canadian and Mexican
carriers.
Although these data show a continued increase in compliance with
UCR registration requirements by the motor carrier industry, further
improvement is essential to address the fairness concerns of the
commenters. As proposed in the NPRM, the 2010 fee structure depends on
the States registering 374,200 motor carrier entities to achieve the
required revenue levels under the statute (see Table 13, 74 FR 45593).
As adjusted below, the States will need to register 370,664 entities or
a weighted average of 85.50 percent in all States (including Canadian
and Mexican carriers) in order to achieve the revenue levels expected.
In FMCSA's view, a fee structure based on compliance rates of 90
percent in the participating States and 59 percent in the non-
participating States is aggressive but fair and balanced.
In any case, lack of enforcement is not the sole reason the
participating States have failed to achieve their revenue entitlements.
As explained in the NPRM, the Agency believes that the most significant
cause of past revenue shortfalls is bracket shifting. This means that
even if the States achieved 100 percent compliance at 2009 fee levels,
they would nonetheless experience a revenue shortfall warranting a fee
adjustment.
4. FMCSA's Analysis of Bracket Shifting Inadequate
Comments
Many industry commenters disagreed with FMCSA's treatment of
bracket shifting. Most of the comments echoed objections ATA
articulated in its comments. ATA identified what it believed are the
five causes of bracket shifting:
1. The MCMIS data on a carrier may be erroneous, and the carrier
legitimately pays fees at a level different than the recorded data
would predict;
2. The carrier chooses under the Act to base its fee calculation on
the actual number of vehicles it operated during the preceding year
instead of the
[[Page 22004]]
number it reported to FMCSA, and therefore falls into a different
bracket;
3. The carrier operates some of its vehicles solely in intrastate
commerce, excludes these from its fleet count, as is permitted by the
Act, and pays less than expected;
4. The carrier is legitimately confused about the requirements of
the Act, and excludes trailing equipment or equipment operated in
interstate commerce but solely within a single state; and
5. The carrier cheats, and knowingly pays less than it owes.
According to ATA, the fourth and fifth causes of bracket shift
listed above reflect noncompliance and are very likely major causes of
the States' revenue shortfalls. However, ATA acknowledges that it is
currently impossible to know what proportion of the reported 25 percent
revenue loss constitutes non-compliance, because no States have yet
performed any audits. ATA also criticized FMCSA's ``unquestioning
acceptance'' of the analysis of bracket shift made available to the
Board and said that the Agency should not accept this ``superficial''
analysis without some verification.
ATA also pointed out that inclusion of trailers and other towed
vehicles in the UCR program led to a great deal of confusion on the
part of motor carriers when they had to calculate the size of their
fleets, and led many to underpay by mistake what they owed. ATA stated
that this aspect of the administration of the program should not be
ignored.
Several commenters agreed with FMCSA that bracket shifting is a
significant contributor to revenue shortfalls, but disagreed that it
was appropriate to adjust the fees to compensate for it. The Snack Food
Association commented that MCMIS data do not always predict actual
registrations and that a large number of carriers are intentionally
under-reporting their fleet sizes.
UPS expressed concern at ``the almost total absence of any type of
review of the appropriateness of'' bracket shifting. UPS also commented
that bracket shifting may be due to the fact that many industry members
do not understand that the definition of interstate transportation for
UCR registration purposes is ``significantly different than the
interpretation in most states which hold that the vehicle not the cargo
or passengers must cross state lines.'' As a result, UPS strongly
disagrees with FMCSA's (and most States') acceptance of self-reported
figures.
Alabama PSC challenged ATA's suggestion that bracket shift could be
the result of mistake or fraud, stating that Alabama's initial efforts
at auditing carriers had uncovered ``no evidence of fraud or mistake.''
Alabama PSC also challenged ATA's claim that the States had not yet
performed any audits of bracket shifting, noting that ATA and other
industry representatives voted against a recent Board resolution
requiring carriers that remove vehicles from their fleet count to
maintain a vehicle-specific list so that States may conduct accurate
audits of bracket shifting. Alabama PSC concluded that the vast
majority of bracket shifting appears to be legitimate and that it would
be unreasonable not to include it as a factor in the 2010 fees, with a
reasonable adjustment to the factor to account for mistake or fraud.
Some commenters criticized the use of FMCSA's MCMIS data base as
the source of the carrier population, stating that faulty data are one
potential cause of bracket shifting. The TRLA and the NPTC both said
that MCMIS 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. They, along with other commenters, also faulted
FMCSA for having no systematic mechanism for verifying and correcting
the data submitted by the registrants, although they acknowledged the
efforts of some States to clean up MCMIS data. RTLA and NPTC said that
data quality issues have made it ``problematic at best'' to determine
an appropriate fee schedule that would generate the amount of revenue
allowed by the UCR Act. The California DMV commented ``the MCMIS data
is not a good benchmark to calculate the UCR fees.'' Finally, a carrier
commented that the States should be provided accurate information of
the number of interstate carriers from their State and then be required
to obtain compliance of at least 90 percent if they are to participate.
Response
FMCSA believes that bracket shifting has been a significant factor
in causing the overall revenue shortfall. As explained in the NPRM,
bracket shifting has caused a significant portion of the revenue
shortfall in Registration Years 2007-2009. The shortfalls have occurred
because motor carriers are not always required to use the number of
CMVs reported to FMCSA and incorporated into MCMIS as the number of
CMVs used to determine the applicable fee for UCR registration (74 FR
45589-90).
Only the participating States have access to the underlying data on
revenue yields by bracket used to develop the analysis presented to the
Board and utilized by FMCSA in developing the fees; FMCSA does not. No
industry representative on the Board challenged the accuracy of the
data on the revenue effect of bracket shifting shown in Table 8 in the
NPRM when it was presented at Board meetings earlier this year.
The data from MCMIS, despite apparent inadequacies, are the only
data source available for developing the UCR fees and fee structure. As
even ATA acknowledged: ``The agency's analysis of the overall motor
carrier population is unobjectionable. The underlying data may not be
all it should be, but anyone working in this area must begin with it.''
The MCMIS data base was not designed for and was not intended for use
as a source for designing and then collecting the fees for the UCR Plan
and Agreement. Nonetheless, FMCSA has made the data available for use
by the UCR Plan and the participating States, at their request,
because, as ATA points out, it is probably the best source that is
available. The implementation of the UCR Plan and Agreement has had the
benefit (along with other considerations) of leading FMCSA to implement
procedures to improve the accuracy, reliability and timeliness of the
motor carrier data in MCMIS. A few commenters also noted that the
reliability of the MCMIS data used in the implementation and
administration of the UCR Plan's registration has improved over time.
Nonetheless, the motor carrier information contained in MCMIS, as
self-reported by carriers filing and updating information on a form
MCS-150, is not the sole basis under the statute for determining the
appropriate fees to be paid by a carrier registering with the UCR Plan.
As explained in detail in the NPRM, the statute permits carriers to
register under a different fleet size than that which is reported in
MCMIS (74 FR 45589-90).
Generally FMCSA agrees with ATA and other commenters that there are
a number of reasons for bracket shifting, some lawful and some not.
However, ATA did not identify all of the legitimate reasons for which a
motor carrier may shift to a bracket different than that indicated by
the MCMIS database. For example, motor carriers may also exclude from
their fleets vehicles under lease for terms of 30 days or less.
Moreover, motor carriers may add CMVs to their fleets for the purpose
of UCR registration, and, as indicated in the NPRM, hundreds of
carriers apparently did so.
[[Page 22005]]
FMCSA agrees that many motor carriers subject to the UCR Plan and
Agreement do not fully understand their rights and responsibilities
with respect to fees. Comments indicate that some motor carriers may
not understand that there are legitimate reasons for adjusting the
number of vehicles in their fleets for the purpose of registering with
the UCR Plan. One motor carrier, for example, complained about having
to pay a fee based on 148 power units when only 28 were used in
interstate movements, while the rest were used to transport seasonal
agricultural products within California. By statute, this carrier ``may
elect not to include commercial motor vehicles used exclusively in the
intrastate transportation of property * * * '' (49 U.S.C.
14504a(f)(3)). This commenter did not explain why it would not make
such an election, which would reduce its fee from $8,541 to $1,793
under the proposal in the NPRM. Nevertheless, this is but one example
of the many legitimate opportunities for a carrier to shift to a
different UCR fee bracket.
ATA does not support with any evidence its statement that
registrations with improper bracket shifting ``are very likely major
causes of the states' revenue shortfalls.'' On the other hand, the
Alabama PSC reports in its comments that: ``Alabama's initial efforts
at auditing carriers have uncovered no evidence of fraud or mistake.''
ATA also implies that the change removing towed vehicles from the CMV
definition will reduce the amount of bracket shifting.
On the other hand, as the example discussed above shows, there are
still numerous situations that would allow a motor carrier to adjust
its fleet size for UCR registration purposes, even when only power
units are considered. FMCSA agrees that the removal of trailers and
other towed vehicles from the definition of commercial motor vehicles
for the purpose of determining the number of such vehicles owned and
operated may lessen, but will not eliminate, bracket shifting. As
indicated in the NPRM, and in the discussion above, there are numerous
legitimate grounds for a registering motor carrier or freight forwarder
to rely on in making such adjustments. Therefore, in the Agency's
judgment, it would be reasonable to incorporate into the adjustment of
the fees for 2010 an estimate that bracket shifting will produce a
reduction of 15% in the revenues that would be expected from the number
of CMVs reflected in the MCMIS data base. This is a change from the
estimated revenue reduction of approximately 25% used in the NPRM. If
industry's supposition that bracket shifting will diminish with the
removal of towed CMVs from the fleets proves to be true to such an
extent that revenues collected under the UCR Plan and Agreement,
despite FMCSA's estimate that revenue loss due to bracket shifting will
fall to 15%, the statute requires the Board and FMCSA to reduce the
fees accordingly in the following year (49 U.S.C. 14504a(h)(4)).
5. Compliance Rates Likely To Decline
Comments
Some commenters, including ATA and TIA, argued that sharply
increased UCR Agreement fees would increase noncompliance, creating a
future spiral of State revenue shortfalls and requests for yet higher
fees. The Snack Food Association said that placing almost the entire
burden of a solution on compliant carriers was unfair and that it was
likely that a fee increase of this magnitude would decrease compliance
rates.
Response
FMCSA has no evidence to conclude that this final rule will
increase non-compliance and create future spirals of revenue shortfalls
and increased fees. State revenue collection for Registration Year 2010
will depend not only on the fees published in this final rule, but also
on States increasing their enforcement efforts. Given the incentive for
greater enforcement built into this rule, there is no basis to conclude
that higher fees will result in greater non-compliance. In fact, the
opposite is true. States have every incentive to improve enforcement so
that they can achieve the full amounts to which they are entitled.
Finally, the Agency will be observing the Board's and the States'
enforcement and audit activities closely. Future State revenue
shortfalls do not in and of themselves guarantee fee increases.
6. Problem of Moral Hazard/Self-Fulfilling Prophecy
Comments
ATA, TIA, and YRC Worldwide commented that, by mirroring the
Board's proposal, FMCSA's proposal would create a moral hazard by
signaling to States that they do not need to exert any enforcement
efforts. UPS disagreed with FMCSA's division of the discussion of
enforcement into participating and non-participating States. According
to UPS, because UCR is a safety program, enforcement should not be
optional for States. UPS also commented that revenue should not be the
incentive for safety enforcement. UPS has very serious concerns about
allowing any State or group of States the option of selectively
enforcing Federal law. According to UPS, non-participating States
should not be allowed to use the lack of revenue as an excuse for not
enforcing the program.
UPS argued in favor of using the total population, without any
reductions, as the basis for the fee calculation. That a significant
number have not registered ``is not a justification for accepting this
non-compliance,'' in UPS' opinion, and ``is evidence of the lack of
effective enforcement of the UCR by the states.''
Response
FMCSA disagrees that the final rule will create a moral hazard or
other incentive for States not to enforce the UCR program against
eligible entities.
Despite characterizations to the contrary, FMCSA's proposal does
not mirror or substantially adopt the Board's proposal. FMCSA did not
believe that the Board's proposal took into account the need for
increased State enforcement efforts, among other things. As a result,
FMCSA proposed a different fee structure that factored in an average
compliance rate of 86.4 percent, which has been slightly adjusted to
85.5 percent in this final rule. This is a significant increase over
the compliance rate for registration years 2007--2009, as well as the
compliance rate incorporated into the Board's April 3, 2009, proposal.
FMCSA believes that the fee structure incorporated in this final rule
sets realistic compliance goals that require States to improve their
enforcement efforts in order to reach the statutory entitlement
amounts.
As explained above, the statute only authorizes FMCSA to set fees.
Clearly, FMCSA can create incentives for enforcement, as it has in this
final rule, by setting fees that require increased enforcement efforts
in order for participating States to reach their entitlement levels.
FMCSA believes that participating States can improve the number of
registrations by targeting carriers through roadside enforcement
efforts, especially at State border crossings, and mailing campaigns.
Still, FMCSA recognizes that participating States' opportunities for
extra-jurisdictional enforcement are inherently limited. A number of
carriers transporting goods or people in interstate commerce might
never leave their home States. There is very little that participating
States can do in these circumstances, except undertaking outreach
efforts. FMCSA has attempted to balance the realities of these
limitations with its statutory directive to set fees so that States
receive their entitlement revenue amounts.
[[Page 22006]]
7. Fee Increase in Response to Change to CMV Definition
Comments
A minority of commenters from industry and a few industry
associations opposed any increase in the fees, even that portion of the
increase required to reflect the change in the statute defining
``commercial motor vehicle'' for UCR purposes beginning in 2010.
However, a substantial proportion of the motor carrier commenters,
following the lead of ATA, and all of the comments on behalf of State
interests, agreed that some increase in the fees is necessary because
of that statutory change. Two commenters stated that the industry
understands that a fee adjustment is necessary to accommodate the
elimination of trailers from the fee calculation, and that ``Table 4 in
the NPRM would be acceptable to most in the trucking industry.''
Several trucking associations also stated that they would accept the
fees in Table 4 of the NPRM that reflected only the change in the
definition. ATA and TIA also commented that the exclusion of towed
units from the definition of CMV should eliminate some confusion among
motor carriers and result in some revenue gain.
Response
FMCSA does not agree that the 2010 fee adjustment should take into
account only the statutory change to the definition of CMV. As
explained previously, the statute requires FMCSA to set the fees at a
level that will provide the States their revenue entitlements. In order
to discharge its statutory duties, FMCSA must also take into account
the realities of bracket shifting and a reasonable compliance rate.
These two factors, especially bracket shifting, have been, in FMCSA's
view, the cause of the revenue shortfalls, and must be taken into
account as well in setting the fees for 2010. A fee level that only
takes into account the statutory change would not enable the
participating States to reach their statutorily mandated revenues.
8. Other Arguments Against Fee Proposals
a. FMCSA Did Not Balance All Factors Appropriately
Comments
ATA and TIA commented that by not granting the Board sole
discretion to set fees, Federal law implies that FMCSA is to exercise
some discretion and balance the interests of the participating States
with the interests of the industry members. ATA and TIA argued that
there is no indication in the NPRM that the Agency has done this.
Response
Although many commenters contend that FMCSA has an implied duty to
balance State and industry interests, none have cited legal authority
to support this position. In many respects, the specific language of
the statute restricts, rather than expands, the Agency's discretion. As
explained above, FMCSA may balance State and industry interests only to
the extent that doing so does not frustrate its statutory obligation to
set fees that enable States to achieve their revenue entitlements. (See
Section III, above.)
b. Eliminate Administrative Costs and Reserve From the Calculation
Comments
Alaska Trucking Association objected to including $5 million for
administrative expenses under the current economic conditions. An
individual trucker echoed this objection. ATA and TIA objected to
including both $5 million for administrative expenses and the $563,885
revenue reserve. ATA said that the reserve fund request is unsupported
by statute, and the concept ``belies the assumed precision that
underlies the rest of the fee proposal.'' Minnesota Trucking
Association commented that there is no economic justification for
including administrative expenses and a revenue reserve.
Response
FMCSA disagrees with the commenters who contend that including
administrative costs in the fee calculation is inappropriate. In
setting the fees, the statute directs FMCSA to consider administrative
costs associated with the UCR Plan and Agreement (49 U.S.C.
14504a(d)(7)(A)(i)). Considering this statutory obligation, FMCSA
believes it is not only reasonable, but imperative, to include these
costs in the fee calculation. The amount of the estimated
administrative costs was approved by the UCR Plan's board of directors,
and FMCSA does not see any basis for rejecting that recommendation.
Although FMCSA is not statutorily obligated to include a revenue
reserve in the fee calculation, the Agency nonetheless believes it is
within its discretion to include this amount if it is necessary to
fulfill its statutory obligations. This amount was designed to account
for any uncertainties involved in the fee calculation to ensure that
the States are able to achieve their entitlement revenue levels. In
fact, FMCSA included a 0.5 percent revenue reserve as a component of
the fees for Registration Years 2007-2009 without receiving any
negative comments.
Nonetheless, FMCSA has decided to remove the revenue reserve
component from the fee calculations in the final rule. After 3 years of
experience administering the fees, FMCSA believes that the initial
uncertainties prompting inclusion of a revenue reserve have diminished.
Both FMCSA and the Plan have a greater understanding of the factors
that have caused under-collection (such as population definition,
compliance rates and bracket shifting) and have adjusted the final rule
accordingly. As a result, the Plan should face significantly less
uncertainty, negating the need for the revenue reserve. This final rule
removes the revenue reserve from the amount of the total revenue
entitlement, which has been adjusted to $112,777,060 from the
$113,340,945 proposed in the NPRM (74 FR 45588).
c. ``Reasonable'' Fee Required by Statute
Comments
Several trucking associations and carriers, citing 49 U.S.C.
14504a(f)(1)(E), argued that the law requires UCR fees to be adjusted
``within a reasonable range'' and that the proposed increase is not
``reasonable.'' These commenters included ATA, TIA, UPS, the American
Bus Association, the Snack Food Association, the United Motorcoach
Association, and National Tank Truck Carriers. Some asserted that,
given the state of the economy, the increase proposed by the NPRM is
not reasonable; others pointed to the size of the proposed increase as
unreasonable. The TRLA and the NPTC also opposed the proposed fees as
unreasonable and in violation of Sec. 14504a(e)(1)(B). In addition,
they argued that the State recipients of UCR fee revenues have not
demonstrated that they are in compliance with the requirement in the
UCR Act that they use an amount equivalent to the UCR revenues on motor
carrier safety programs, enforcement, or administration of the UCR
program, citing Sec. 14504a(e)(1)(B). The NPTC added that private
motor carriers did not pay into the SSRS, but they agreed to pay UCR
fees on the grounds that the revenue would be used solely for motor
carrier safety enforcement. NPTC said that, 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 CMV is inherently unreasonable. The
Snack Food Association also argued that the doubling of fees did not
meet the ``reasonable range'' test, especially given
[[Page 22007]]
the ``extreme economic pressures'' facing the for-hire carrier
industry. The American Bus Association also commented that FMCSA had
merely ``rubber-stamped'' the Board's request ``in the mistaken belief
that it must approve any request,'' and questioned whether the Agency
had fulfilled its duty to determine the reasonableness of a Board
adjustment recommendation.
Response
FMCSA does not agree that the 2010 UCR fees are unreasonable. FMCSA
has interpreted the statutory text that directs that any annual
adjustment be ``within a reasonable range'' to mean that the
determination of what is reasonable must be made in the context of its
obligation to enable States to receive their statutorily mandated
revenues. As explained in Section III, above, factors that frustrate
the statutory objective of providing the participating States their
entitled revenues are not consistent with FMCSA's statutory directive.
FMCSA disagrees that it has ``rubber-stamped'' the Board's
recommendation or that the Secretary has not discharged his statutory
duties. In fact, FMCSA concluded that the Board's recommendation
submitted on April 3, 2009, did not adequately address three factors:
carrier population, bracket shifting and enforcement. In the NPRM,
FMCSA explained in detail why it believes that the fees should take
these factors into account and how the fees should be calculated. In
incorporating these factors into its proposed fee, including a detailed
explanation of its calculations, FMCSA proposed a methodology very
different from that which the Board recommended.
Finally, FMCSA does not agree that the reasonableness of the fees
depends on an audit of States' use of UCR registration fees. Although
several commenters asserted that FMCSA has a duty to ensure that States
are using these revenues for safety enforcement, none identified with
any specificity the legal basis for this assertion. FMCSA is not aware
of any statutory or other provision that requires it to conduct an
audit of State activities prior to adjusting the fees.
d. FMCSA Should Retain Current Fees
Comments
Several owner-operators asked explicitly that the current fees be
kept in place while the implicit message from many other commenters was
the same. One trucking company said that all fee increases ``other than
the absolute minimum necessary to support the programs'' should be
postponed until it is clear the motor carrier industry is moving out of
the current recession. California U-Haul commented the fees should
remain consistent with prior years, suggesting that an increased
emphasis on enforcement would result in increased revenue.
Response
FMCSA does not agree that the 2010 fees should remain the same as
the fees set for Registration Years 2007-2009. FMCSA has a statutory
duty to enable States to achieve their revenue entitlements and does
not believe that setting 2010 fees at current levels is consistent with
that duty. As explained above, the Agency believes that the 2010 fees
must take into account the change to the definition of CMV, bracket
shifting and compliance rates.
e. Partial Increase Associated With Increased Enforcement
Comments
FMCSA received several comments requesting that the Agency modify
the timing of the fee and alter the method of enforcement. One
commenter requested a partial increase in the fees, with the remaining
amount phased in over time. A commenter requested that FMCSA allow
roadside enforcement to collect all outstanding UCR fees from that
motor carrier for all registration years before allowing the motor
carrier to continue its travel.
Response
FMCSA does not agree that these alternatives would present a better
fee structure than that proposed in the NPRM. A phased-in fee structure
would further complicate enforcement efforts, creating additional
expenses and confusion for both participating States and registering
entities. The 2010 fee structure is the Agency's best attempt to
rectify the shortcomings of previous years' fees, including addressing
population, bracket shifting and compliance issues. Finally, as
explained above, while FMCSA can encourage States to take enforcement
action indirectly by setting compliance goals, it has no authority to
require States to take specific enforcement actions. Any effort to make
UCR delinquency an out-of-service criterion must be taken up at the
State level.
f. Increase Number of Brackets/Revise Bracket Structure
Comments
ATA and TIA approved of using the maximum number of brackets
permitted by statute, as FMCSA had done. ATA and TIA also said that
FMCSA had properly applied the principle of progressivity required by
the Act so that the per-vehicle fees at the bottom of each bracket are
substantially equivalent across the fee structure. However, other
commenters criticized the bracket structure. One commenter argued that
the fees should be assessed on a per-power-unit basis instead of using
brackets.
A few commenters addressed the break point between the first two
brackets. Both the Minnesota Trucking Association and the Missouri DOT
supported changing bracket 1 from 0-2 to 0-1 and bracket 2 from 3-5 to
2-5, as recommended by the Board. This would keep more companies in the
same tier category as previously and minimize the revenue loss. Another
commenter said FMCSA should reconsider whether the lowest bracket
should break at one or two power units. It cited a decision by the
Board that a business operating one power unit is significantly
different from one that operates two or more. ATA and TIA also
addressed the lowest bracket and said that FMCSA should explain the
discrepancy between its proposal and the Board's recommendation.
Response
While FMCSA acknowledges commenters' concerns about the bracket
structure, the Agency has decided to retain the bracket structure from
the current fees in this final rule. Inevitably, because of the limited
number of brackets and heterogeneous types of vehicles and operations,
either the existing UCR fee structure or a new UCR proposal could prove
advantageous to some carriers and disadvantageous to other carriers.
The changes proposed by FMCSA actually help to redress some of the
disparities in fees per power unit that exist under the current rule.
(See the Regulatory Flexibility Act section below.) The rule could be
adjusted to reduce the impacts on any individual carrier or group of
carriers, but given that the same revenue target would have to be met,
this would only result in the collection of additional revenues from
other carriers. Other changes in the bracket structure (such as
increasing the number of brackets) would require a statutory amendment.
Nonetheless, in an effort to respond to comments on the bracket
structure, FMCSA will assist the UCR Plan in revisiting the bracket
structure when the UCR Plan begins considering any adjustments in fees
for future registration years. The Agency can provide technical
assistance to support a thorough analysis of alternative bracket
structures to reduce the
[[Page 22008]]
economic impact on small businesses to the greatest extent practicable.
While the statute requires the UCR Plan to develop no more than 6 and
no fewer than 4 brackets of carriers (including motor private carriers)
based on the size of the fleet, the statute does provide flexibility in
the number of power units included in each of the brackets and allows
the registration fees to be adjusted within a reasonable range on an
annual basis if the fees are either insufficient to provide the
participating States with the revenues they are entitled to receive or
lead to a revenue excess (49 U.S.C. 14504a(f)(1)(E)). Therefore,
separate from this rulemaking, the Agency will assist the UCR Plan in
revisiting the bracket structure and in considering alternatives to the
current structure, to the extent practicable under the current statute,
while ensuring the States receive the funds necessary to fulfill the
statutory requirement
g. Tie Fees to Other Motor Carrier Programs
Comments
One commenter suggested looking at the IRP as the basis for the UCR
fees. State-issued registrations would not be issued until the required
fees are paid. This would provide a fee that is more manageable for
every power unit subject to submitting Internal Revenue Service Form
2290. Another urged ``make it a requirement with a lesser fee to show
proof of payment when doing the yearly registration or IFTA renewal
same as the 2290.'' The California DMV argued that because the data in
MCMIS are inaccurate due to poor carrier reporting and a confusing
``interstate carrier'' definition, the UCR fee calculation should be
based on the IRP count of interstate carriers. Because the IRP requires
a carrier to cross the jurisdictional line to be considered an
interstate carrier, use of IRP would ensure an ``absolute, accurate
count'' of interstate carriers, although it would exclude from UCR
registration carriers operating in a single State while transporting
interstate passengers or property. Fees also could be affixed to the
IRP credential process.
Other comments suggested tying UCR funds to existing FMCSA grant
programs (e.g., Performance and Registration Information Systems
Management [PRISM] or Motor Carrier Safety Assistance Program [MCSAP]).
Commenters suggested that linking UCR funding to these programs would
provide enforcement incentives to both participating and non-
participating States.
Response
FMCSA does not believe that it has the legal authority to adopt the
changes these commenters requested. The Board, not FMCSA, has the
authority to issue the rules and regulations, including those related
to administration of the program (49 U.S.C. 14504a(d)(2)). In the
absence of statutory authorization, FMCSA lacks the authority to re-
structure or order the re-structuring of the manner in which UCR fees
are collected. However, some States have enacted legislation
authorizing them to collect UCR fees at the same time they register
vehicles and collect IFTA fees. FMCSA encourages all States to engage
in this kind of proactive collection effort, but lacks the authority to
mandate it.
Some of the program linkages and other suggestions submitted by
commenters may have merit. However, all of them would require statutory
changes that are clearly beyond FMCSA's power to accomplish in this
rulemaking. Such changes may well be appropriate for consideration by
Congress during the next reauthorization of motor carrier programs
administered by the Department of Transportation but unless and until
such changes are enacted, FMCSA must carry out its responsibilities
under the current provisions of the statute.
h. Fees for 2010
Comments
ATA contends that the States may not begin assessing and collecting
UCR fees for 2010 ``until the fee structure is amended to reflect the
statutory change [in the definition of CMVs].''
Response
The comment by ATA does not reflect a correct interpretation of the
effect of the amendment to 49 U.S.C. 14504a(a)(1)(A) modifying the
definition of ``commercial motor vehicle'' that became effective for
years beginning after December 31, 2009. The FMCSA recently issued
regulatory guidance on the effect of the amendment on the application
of the fees established in 49 CFR 367.20 (Regulatory Guidance
Concerning the Applicability of Fees for the Unified Carrier
Registration Plan and Agreement, 75 FR 9487 (March 2, 2010). The
statutory amendment of the applicable definition of commercial motor
vehicles in 49 U.S.C. 14504a that applies beginning after December 31,
2009, also governs the application of the fees established by Sec.
367.20 so that it applies to registration years beginning after
December 31, 2009 until superseded by an adjusted set of fees.
Therefore, the States participating in the UCR Plan and Agreement may
assess and collect fees pursuant to the fee schedule set forth in 49
CFR 367.20 until the fees adopted in this final rule become effective.
A technical change in the heading of 49 CFR 367.20 is necessary to
reflect the regulatory guidance.
VI. The Final Rule
After considering the comments received on the proposed rule, FMCSA
is adopting the final rule as proposed with changes.
In accordance with 49 U.S.C. 14504a(g)(4), FMCSA proposed in the
NPRM to approve the amount of revenue under the UCR Agreement to which
each State participating in 2010 is entitled. The FMCSA included in its
proposed revenue estimate administrative expenses of $5 million and a
revenue reserve of 0.5 percent. After evaluating comments that opposed
inclusion of the administrative expenses and the revenue reserve, FMCSA
has concluded that it is statutorily required to include the
administrative expenses, but has decided to remove the revenue reserve
component from the fee calculations in the final rule. FMCSA is,
therefore, approving the amount of revenue under the UCR Agreement to
which each State participating in 2010 is entitled, and the final 2010
revenue target, as specified in the following table.
Table 5--State UCR Revenue Entitlements and Final 2010 Revenue Target
------------------------------------------------------------------------
Total 2010 UCR
State revenue
entitlements
------------------------------------------------------------------------
Alabama............................................... $2,939,964.00
Arkansas.............................................. 1,817,360.00
California............................................ 2,131,710.00
Colorado.............................................. 1,801,615.00
Connecticut........................................... 3,129,840.00
Georgia............................................... 2,660,060.00
Idaho................................................. 547,696.68
Illinois.............................................. 3,516,993.00
Indiana............................................... 2,364,879.00
Iowa.................................................. 474,742.00
Kansas................................................ 4,344,290.00
Kentucky.............................................. 5,365,980.00
Louisiana............................................. 4,063,836.00
Maine................................................. 1,555,672.00
Massachusetts......................................... 2,282,887.00
Michigan.............................................. 7,520,717.00
Minnesota............................................. 1,137,132.30
Missouri.............................................. 2,342,000.00
Mississippi........................................... 4,322,100.00
Montana............................................... 1,049,063.00
Nebraska.............................................. 741,974.00
New Hampshire......................................... 2,273,299.00
New Mexico............................................ 3,292,233.00
New York.............................................. 4,414,538.00
[[Page 22009]]
North Carolina........................................ 372,007.00
North Dakota.......................................... 2,010,434.00
Ohio.................................................. 4,813,877.74
Oklahoma.............................................. 2,457,796.00
Pennsylvania.......................................... 4,945,527.00
Rhode Island.......................................... 2,285,486.00
South Carolina........................................ 2,420,120.00
South Dakota.......................................... 855,623.00
Tennessee............................................. 4,759,329.00
Texas................................................. 2,718,628.06
Utah.................................................. 2,098,408.00
Virginia.............................................. 4,852,865.00
Washington............................................ 2,467,971.00
West Virginia......................................... 1,431,727.03
Wisconsin............................................. 2,196,680.00
-----------------
Sub-Total........................................... 106,777,059.81
Alaska................................................ 500,000
Delaware.............................................. 500,000
-----------------
Total State Revenue Entitlement..................... 107,777,060
Administrative Expenses............................... 5,000,000
-----------------
Total 2010 Revenue Target........................... 112,777,060
------------------------------------------------------------------------
FMCSA is also revising the RPR factor set out in Table 13 of the
NPRM. Because of time constraints, an approximate recent population was
used to develop the weighted average projected compliance rate of 86.42
percent. Data for 2008 are now available that provide the actual number
of motor carrier entities allocated between the participating and non-
participating States. As a result, a slight adjustment in the
calculations in Table 13 has been made. The revised table is set out
below:
Table 6 (Table 13 Revised)--Registration Percentage Reasonableness (RPR) Factor
----------------------------------------------------------------------------------------------------------------
Recent Board's FMCSA's
population projected FMCSA's projected
(2008) registrations estimated RPR registrations
----------------------------------------------------------------------------------------------------------------
Participating States........................ 370,575 333,518 90% 333,518
Non-Participating States.................... 62,960 50,368 59% 37,146
-------------------------------------------------------------------
Total................................... 433,535 383,886 85.50% 370,664
----------------------------------------------------------------------------------------------------------------
The one substantial change made in this final rule involves the
appropriate adjustment to recognize bracket shifting. In the NPRM,
FMCSA considered empirical data reflecting the participating States'
actual experience with bracket shifting during the years 2007-2009. The
analysis indicated that the States experienced a reduction of expected
revenues of approximately 25% as a result of bracket shifting during
those registration years. The proposed fees in the NPRM were based on
an expectation that a similar amount of revenue loss from bracket
shifting would occur in 2010. The adjustment was made because motor
carriers would register in a different bracket than the bracket
predicted from the number of CMVs reported to FMCSA and reflected in
the MCMIS data. As previously explained, there are several provisions
that permit motor carriers to adjust the number of commercial motor
vehicles reported to FMCSA when registering and determining the
applicable fee. In addition, as suggested in the comments, some
carriers may not have included towed CMVs in the number of CMVs used to
determine the applicable fee because of confusion or an unclear
understanding of the applicable requirements.\11\ Now that the
statutory amendment means trailers and other towed vehicles are not to
be considered in determining the number of commercial motor vehicles,
the possibility of confusion or uncertainty is reduced. Because of the
many other legitimate reasons that bracket shifting can occur, FMCSA
finds that it is appropriate, in setting the fees in this final rule,
to incorporate a smaller factor of 15% (instead of the 25% proposed in
the NPRM) for the revenue loss expected to occur in 2010 because of
bracket shifting.
---------------------------------------------------------------------------
\11\ Under SSRS, only self-propelled vehicles were ever subject
to the payment of the per-vehicle fees charged, which may have
created some confusion when the UCR Plan's fees were implemented.
See 49 CFR 367.1(c).
---------------------------------------------------------------------------
The table below shows the fees adopted by this rule as a result of
the FMCSA's decision to remove the revenue reserve component from the
fee calculations, the revision of the RPR factor and the modification
of the factor used to adjust for the estimated effect of bracket
shifting in 2010.
Table 7--Fees Under the Unified Carrier Registration Plan and Agreement for Registration Year 2010
----------------------------------------------------------------------------------------------------------------
Fee per entity
Number of CMVs owned or for exempt or
operated by exempt or non- non-exempt motor Fee per entity
Bracket exempt motor carrier, motor carrier, motor for broker or
private carrier, or freight private carrier, leasing company
forwarder or freight
forwarder
----------------------------------------------------------------------------------------------------------------
B1.......................................... 0-2........................... $76 $76
B2.......................................... 3-5........................... 227 ................
B3.......................................... 6-20.......................... 452 ................
B4.......................................... 21-100........................ 1,576 ................
B5.......................................... 101-1,000..................... 7,511 ................
B6.......................................... 1,001 and above............... 73,346 ................
----------------------------------------------------------------------------------------------------------------
[[Page 22010]]
As indicated previously in this preamble, FMCSA will assist the UCR
Plan in revisiting the bracket structure when the Plan begins
considering any adjustments in the fees for future registration years.
The Agency can provide technical assistance to support a thorough
analysis of alternative bracket structures to reduce the economic
impact on small businesses to the greatest extent practicable.
FMCSA also received comments supporting its proposal to revise 49
CFR part 367 by eliminating current subpart A, which contains
regulations implementing the provisions of now-repealed 49 U.S.C.
14504. Therefore, this final rule removes current 49 CFR part 367
subpart A in its entirety. Second, the heading of 49 CFR 367.20 is
changed to specify that the fees established by that section are
applicable for each registration year until a subsequent adjustment in
the fees becomes effective. Third, a new 49 U.S.C. 367.30 establishes
the fees applicable to registration years beginning on January 1, 2010.
As described above, the elimination of a revenue reserve from the 2010
revenue target and a revision to the blended estimated compliance rate
has caused FMCSA to revise and reduce slightly the 2010 fees proposed
in the NPRM. Finally, this final rule makes a technical change in the
headings to the fee tables to make clear that the fees are applicable
to all entities that are required to register and pay fees to the UCR
Plan.
VII. Regulatory Analyses and Notices
Administrative Procedure Act
The Administrative Procedure Act's rulemaking provision in
subsection (d)(3) of 5 U.S.C. 553 allows FMCSA to make a final rule
effective on its publication date for good cause. Making this final
rule effective on the date of publication will allow the participating
States to begin registering motor carrier entities and billing and
collecting fees for 2010 in accordance with the established procedures.
Such immediate effectiveness will not harm any person or regulated
entity, but will avoid any confusion caused by departure from those
procedures. Any delay in collecting 2010 fees could also have a serious
impact on participating States by causing them to lay off State
employees and to curtail compliance and enforcement efforts, thereby
jeopardizing the statutory objective of ensuring State revenues. FMCSA
therefore finds that it is necessary to make this final rule effective
immediately upon publication.
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
In the NPRM, FMCSA made a preliminary determination that the
proposed rule was not a significant regulatory action within the
meaning of Executive Order 12866 and the U.S. Department of
Transportation's regulatory policies and procedures (DOT Order 2100.5
dated May 22, 1980; 44 FR 11034, February 26, 1979). It made this
preliminary determination by finding that the costs of the proposed
regulatory action would not exceed the $100 million annual threshold as
defined in Executive Order 12866.
Comments on the Economic Significance and Other Significance of the
Rulemaking
Several commenters said that FMCSA's determination that this is not
a significant rulemaking is erroneous and that the regulatory action
involved is significant, both economically and otherwise under
Executive Order 12866, and therefore deserves a full administrative
review.
Response
1. The Final Rule Is Not Economically Significant
FMCSA does not agree with the commenters' contention that this rule
is economically significant. Although the total fees collected are
projected to be over $100 million annually, the change from the
existing situation (e.g., the approximately $77 million collected in
2008 and in 2009 (see 74 FR at 45586) is well below $100 million. This
situation is similar to previous UCR rulemakings, which were also
determined to be not economically significant. Finally, as shown under
section V (C)(1) above, the effects on the motor carrier industry would
be too small on a per-CMV basis to have a material impact.
Therefore, FMCSA adheres to its preliminary determination that this
rule is not economically significant based on the size of the
additional fees to be collected under the UCR. The costs of the rule
are required pursuant to an explicit Congressional mandate. Because a
majority of the fees under the final rule are already being collected
under the UCR system, the total cost of the final rule will be
substantially less than $100 million per year. A major intent of the
proposed rule is to eliminate the revenue shortfalls that the UCR
system has experienced over the past several years; that shortfall was
$38 million in 2008, for instance, and of similar magnitude in 2007 and
2009. This increase, though, will clearly be less than the $100 million
threshold for a significant impact on the economy. The Agency has
prepared a regulatory analysis of the rule. A copy of the analysis
document is included in the docket referenced at the beginning of this
notice.
2. The Final Rule Is Significant on Other Grounds
FMCSA finds that novel legal or policy issues are raised in this
regulatory action, and that the final rule is significant under
Executive Order 12866. FMCSA received over 150 comments, a number of
which raised novel legal or policy issues that are appropriate for
review under the regulatory review provisions of that order.
Regulatory Flexibility Act
In compliance with the Regulatory Flexibility Act (RFA), as amended
by the Small Business Regulatory Enforcement Fairness Act (SBREFA), (5
U.S.C. 601-612), FMCSA has considered the effects of this regulatory
action on small entities. The fees being set in this rule would affect
large numbers of small entities because the rule sets fees for hundreds
of thousands of carriers of all sizes, and small entities are defined
to include all entities that are not dominant in their industries. In
previous rulemakings, FMCSA identified for-hire carriers with fewer
than 145 power units (i.e., trucks or tractors) as small. Thus, all of
the for-hire carriers in Brackets 1 through 4 would be considered
small, as would many of those in Bracket 5.
Carriers are not required to report revenue to the Agency, but are
required to provide the Agency with the number of power units they
operate when they apply for operating authority and to update this
figure biennially. Because FMCSA does not have direct revenue figures,
power units serve as a proxy to determine the carrier size that would
qualify as a small business given the SBA's revenue threshold. In order
to produce this estimate, it is necessary to determine the average
revenue generated by a power unit. With regards to truck power units,
the Agency determined in the 2003 Hours of Service Rulemaking RIA \12\
that a power unit produces about $172,000 in revenue
[[Page 22011]]
annually (adjusted for inflation).\13\ According to the SBA, motor
carriers with annual revenue of $25.5 million are considered a small
business.\14\ This equates to 148 power units (25,500,000/172,000).
Thus, FMCSA considers motor carriers with 148 power units or less to be
a small business for SBA purposes.
---------------------------------------------------------------------------
\12\ Regulatory Analysis for: Hours of Service of Drivers;
Driver Rest and Sleep for Safe Operations, Final Rule--Federal Motor
Carrier Safety Administration. 68 FR 22456--Published 4/23/2003.
\13\ The 2000 TTS Blue Book of Trucking Companies, number
adjusted to 2008 dollars for inflation.
\14\ U.S. Small Business Administration Table of Small Business
Size Standards matched to North American Industry Classification
(NAIC) System codes, effective August 22, 2008. See NAIC subsector
484, Truck Transportation.
---------------------------------------------------------------------------
With regards to bus power units, the Agency conducted a preliminary
analysis to estimate the average number of power units (PUs) for a
small entity earning $7 million annually, based on an assumption that a
passenger carrying CMV generates annual revenues of $150,000. This
estimate compares reasonably to the estimated average annual revenue
per power unit for the trucking industry ($172,000). A lower estimate
was used because buses generally do not accumulate as many vehicle
miles traveled (VMT) per power units as trucks,\15\ and it is assumed
therefore that they would generate less revenue on average. The
analysis concluded that passenger carriers with 47 PUs or fewer
($7,000,000 divided by $150,000/PU = 46.7 PU) would be considered small
entities. The Agency then looked at the number and percentage of
passenger carriers registered with FMCSA that would fall under that
definition (of having 47 PUs or less). The results show that 28,838
\16\ (or 99%) of all active registered passenger carriers have 47 PUs
or less. Therefore, the overwhelming majority of passenger carriers
would be considered small entities.
---------------------------------------------------------------------------
\15\ FMCSA Large Truck and Bus Crash Facts 2008, Tables 1 and
20; http://fmcsa.dot.gov/facts-research/LTBCF2008/Index-2008Large_TruckandBusCrashFacts.aspx.
\16\ FMCSA MCMIS snapshot on 2/19/2010.
---------------------------------------------------------------------------
After careful consideration, however, FMCSA has determined that the
recommended UCR fee will, in every case involving a viable small
entity, be well below the threshold level of one percent of revenues
used for determining significant impacts. This conclusion is based the
observation that the maximum fee per vehicle is $76, which is less than
one percent of the $14,500 annual salary of even a single employee
working 40 hours per week for 50 weeks per year and earning the current
Federal minimum wage of $7.25.\17\ Because an entity without sufficient
revenues to pay even one employee per vehicle would not be viable, it
is clear that the recommended UCR fees will not reach the threshold of
one percent of revenues. Thus, FMCSA certifies that the rule will not
have a significant economic impact on a substantial number of small
entities.
---------------------------------------------------------------------------
\17\ The Fair Labor Standards Act (FLSA) establishes minimum
wage, overtime pay, recordkeeping, and youth employment standards
affecting employees in the private sector and in Federal, State, and
local governments. Covered nonexempt workers are entitled to a
minimum wage of not less than $7.25 per hour effective July 24,
2009. http://www.dol.gov/esa/whd/flsa/.
---------------------------------------------------------------------------
Several commenters addressed the impact of the change in the fees
on small entities. A carrier with 11 tractors noted that its costs are
spread over fewer assets than those of larger companies. The carrier
also said that any further cost increases will drive smaller companies
out of business. The American Bus Association said that the average bus
operator has eight motorcoaches, and described the operator as a small
business that would be impacted by the fees. FMCSA cannot validate this
and therefore did not include this in the analysis. In contrast,
another carrier approved of the proposed fee structure because it would
benefit owner-operators and small trucking companies.
Based on this analysis as well as the rule's regulatory evaluation,
FMCSA certifies that the rule will not have a significant economic
impact on a substantial number of small entities.
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; 2 U.S.C.
1532) requires each agency to assess the effects of its regulatory
actions on State, local, and tribal governments and the private sector.
Any agency promulgating a final rule likely to result in a Federal
mandate requiring expenditures by a State, local, or tribal government,
or by the private sector of $136.1 million or more in any one year,
must prepare a written statement incorporating various assessments,
estimates, and descriptions that are delineated in the Act. FMCSA has
determined that this rule will not have an impact of $136.1 million or
more in any one year.
Executive Order 12988 (Civil Justice Reform)
This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.
Executive Order 13045 (Protection of Children)
FMCSA has analyzed this rule under Executive Order 13045,
Protection of Children from Environmental Health Risks and Safety
Risks. FMCSA has determined that this rulemaking would not create an
environmental risk to health or safety that would disproportionately
affect children.
Executive Order 12630 (Taking of Private Property)
This rule would not affect a taking of private property or
otherwise have taking implications under Executive Order 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights.
Executive Order 13132 (Federalism)
This rule has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132. FMCSA has determined that
this rulemaking would not have a substantial direct effect on States,
nor would it limit the policy-making discretion of the States. Nothing
in this proposal would preempt any State law or regulation. As detailed
above, the UCR Board of Directors includes substantial State
representation. The States have already had notice of this action and
opportunity for input through their representatives and through
comments submitted on the NPRM. FMCSA received comments from the States
that failure to promulgate this rule would have a substantial direct
effect on the States as outlined in Executive Order 13132.
Executive Order 12372 (Intergovernmental Review)
The regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this program.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that FMCSA consider the impact of paperwork and other information
collection burdens imposed on the public. FMCSA has determined that
there are no current or new information collection requirements by
FMCSA associated with this rule.
National Environmental Policy Act
The Agency analyzed this final rule for the purpose of the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and
determined under our environmental procedures Order 5610.1, issued
March 1, 2004 (69 FR 9680), that this action is categorically excluded
(CE) under Appendix 2, paragraph 6.h of the Order from further
environmental
[[Page 22012]]
documentation. The CE under Appendix 2, paragraph 6.h relates to
establishing regulations and actions taken pursuant to the regulations
implementing procedures to collect fees that will be charged for motor
carrier registrations and insurance.
FMCSA has also analyzed this rule under the Clean Air Act, as
amended (CAA), section 176(c) (42 U.S.C. 7401 et seq.), and
implementing regulations promulgated by the Environmental Protection
Agency. Approval of this action is exempt from the CAA's General
Conformity requirement since it involves policy development.
Executive Order 13211 (Energy Effects)
FMCSA has analyzed this rule under Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. FMCSA has determined that it would not be a
``significant energy action'' under that Executive Order because it
would not be likely to have a significant adverse effect on the supply,
distribution, or use of energy.
List of Subjects in 49 CFR Part 367
Commercial motor vehicle, Financial responsibility, Motor carriers,
Motor vehicle safety, Registration, Reporting and recordkeeping
requirements.
0
For the reasons discussed in the preamble, the Federal Motor Carrier
Safety Administration is amending title 49 CFR Chapter III, subchapter
B, part 367 as follows:
PART 367--STANDARDS FOR REGISTRATION WITH STATES
0
1. Revise the authority citation for part 367 to read as follows:
Authority: 49 U.S.C. 13301, 14504a; and 49 CFR 1.73.
Subpart A--[Removed and Reserved]
0
2. Remove and reserve subpart A, consisting of Sec. Sec. 367.1 through
367.7 and Appendix A to subpart A.
Subpart B--Fees Under the Unified Carrier Registration Plan and
Agreement
0
3. Amend subpart B by revising the heading of Sec. 367.20 to read as
follows:
Sec. 367.20 Fees Under the Unified Carrier Registration Plan and
Agreement for Each Registration Year Until Any Subsequent Adjustment in
the Fees Becomes Effective.
* * * * *
0
4. Add Sec. 367.30 to subpart B to read as follows:
Sec. 367.30 Fees Under the Unified Carrier Registration Plan and
Agreement for Registration Years Beginning in 2010.
Fees Under the Unified Carrier Registration Plan and Agreement for Each Registration Year
----------------------------------------------------------------------------------------------------------------
Fee per entity
Number of commercial motor for exempt or
vehicles owned or operated by non-exempt motor Fee per entity
Bracket exempt or non-exempt motor carrier, motor for broker or
carrier, motor private private carrier, leasing company
carrier, or freight forwarder or freight
forwarder
----------------------------------------------------------------------------------------------------------------
B1.......................................... 0-2........................... $76 $76
B2.......................................... 3-5........................... 227 ................
B3.......................................... 6-20.......................... 452 ................
B4.......................................... 21-100........................ 1,576 ................
B5.......................................... 101-1,000..................... 7,511 ................
B6.......................................... 1,001 and above............... 73,346 ................
----------------------------------------------------------------------------------------------------------------
Issued on: April 21, 2010.
Alais L.M. Griffin,
Chief Counsel.
[FR Doc. 2010-9674 Filed 4-26-10; 8:45 am]
BILLING CODE 4910-EX-P