[Federal Register: September 3, 2009 (Volume 74, Number 170)]
[Proposed Rules]
[Page 45583-45597]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03se09-18]
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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: Notice of Proposed Rulemaking.
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SUMMARY: This proposed rule would establish annual registration fees
and a fee bracket structure for the Unified Carrier Registration (UCR)
Agreement for the calendar year beginning on 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: You must submit comments on or before September 18, 2009.
ADDRESSES: You may submit comments, identified by docket number FMCSA-
2009-0231 and/or RIN 2126-AB19, by any of the following methods--
Internet, facsimile, regular mail, or hand-deliver.
Federal eRulemaking Portal: Federal Docket Management System (FDMS)
Web site at http://www.regulations.gov.
The FDMS is the preferred method for submitting comments, and we urge you to use it. In the
``Comment'' or ``Submission'' section, type Docket ID Number ``FMCSA--
2009--0231'', select ``Go'', and then click on ``Send a Comment or
Submission.'' You will receive a tracking number when you submit a
comment.
Fax: 1-202-493-2251.
Mail, Courier, or Hand-Deliver: U.S. Department of Transportation,
Docket Operations (M-30), West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue, SE., Washington, DC 20590. Office hours are
between 9 a.m. and 5 p.m., ET, Monday through Friday, except Federal
holidays.
Docket: Comments and material received from the public, as well as
background information and documents mentioned in this preamble, are
part of docket FMCSA-2009-0231, and are available for inspection and
copying on the Internet at
http://www.regulations.gov.
You may also [[Page 45584]] view and copy documents at the U.S. Department of Transportation's
Docket Operations Unit, West Building Ground Floor, Room W12-140, 1200
New Jersey Avenue, SE., Washington, DC.
Privacy Act: All comments will be posted without change including
any personal information provided to the FDMS at
http://www.regulations.gov.
Anyone can search the electronic form of all our
dockets in FDMS, by the name of the individual submitting the comment
(or signing the comment, if submitted on behalf of an association,
business, labor union, etc). The Department of Transportation's (DOT)
complete Privacy Act Statement was published in the Federal Register on
April 11, 2000 (65 FR 19476), and can be viewed at
http://docketsinfo.dot.gov.
Comments received after the comment closing date
will be included in the docket, and we will consider late comments to
the extent practicable. FMCSA may, however, issue a final rule at any
time after the close of the comment period.
FOR FURTHER INFORMATION CONTACT: Ms. Julie Otto, Office of Enforcement
and Program Delivery, (202) 366-0701, FMCSA, Department of
Transportation, 1200 New Jersey Ave. SE., Washington, DC 20590 or by e-
mail at: FMCSAregs@dot.gov.
SUPPLEMENTARY INFORMATION: The preamble is organized as follows:
Table of Contents
I. Legal Basis for the Rulemaking
II. Statutory Requirements for the UCR Fees
III. Background of UCR Fees 2007 to Present
IV. UCR Fee Proposals for Calendar Year 2010
A. The UCR Plan Recommendation
1. Certification of State Revenues
2. Administrative Costs
3. Revenue Target
4. Carrier Population
5. Number of Fee Brackets
6. Fee Levels for Each Bracket
B. The FMCSA Analysis
1. Bracket Shifting
2. Compliance and Enforcement
3. The Board's Response to FMCSA Concerns: Alternative Proposals
V. The FMCSA Fee Proposal
A. Adjustment for Change in CMV Definition
B. Registration Percentage Reasonableness (RPR) Factor
C. Shortfall Adjustment Factor
D. FMCSA Adjustments
VI. Regulatory Changes
VII. Regulatory Analyses and Notices
I. Legal Basis for the Rulemaking
This proposed 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,
Pub. L. 110-53, 121 Stat. 266, 467 (Aug. 3, 2007).
\2\ The Senate bill's provisions were enacted ``with
modifications.'' H. Conf. Rep. No. 109-203, at 1020 (2005).
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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 representing 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 (72 FR 39660),
FMCSA published a notice announcing the reappointment to the Board of
the five Board members from the State agencies nominated by NCSTS. On
June 30 2008, (73 FR 36956) FMCSA published a notice announcing the
reappointment of the members from the four FMCSA service areas to the
Board.
Among its responsibilities, the Board is required to submit to the
Secretary of Transportation \3\ 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 adjustment to the fees
and fee brackets must be adopted following the same timelines and
procedures of 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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\3\ 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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II. 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:
1. Administrative costs associated with the UCR Plan and Agreement.
2. Whether the revenues generated in the previous year and any
surplus or shortage from that or prior years enable
[[Page 45585]]
the participating States to achieve the revenue levels set by the
Board.
3. Provisions governing fees in 49 U.S.C. 14504a(f)(1).
Subsection (f)(1) provides that the fees charged must satisfy the
following criteria:
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)(A) of Public
Law 110-432, Div. A, 122 Stat. 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'' (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, or to the smallest fee charged
under the UCR Agreement.
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 which 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.
III. Background of UCR Fees 2007 to Present
The initial UCR fees and fee structure was 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 as 2007. 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 2007-2009
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Fee per entity
for exempt or
Number of commercial motor non-exempt Fee per entity
vehicles owned or operated by motor carrier, for broker or
Bracket exempt or non-exempt motor motor private leasing
carrier, motor private carrier, carrier, or company
or freight forwarder 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. Figures to date show that States
are approximately 28 percent short of collecting their revenue
entitlement.
[[Page 45586]]
Table 2--UCR Registration Summary 2007 to 2009 *
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State revenue Entities Revenue Revenue
Registration year entitlement registered 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.
Beginning 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.
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 but the Board was
unable to reach consensus on either proposal with both options
receiving an equal number of votes. 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 following sections in this notice of proposed rulemaking (NPRM)
discuss the Board recommendation and other proposals in greater detail
and outline the areas where FMCSA encouraged the Board to address the
issues of greatest concern. Section V details the FMCSA-recommended
2010 UCR fees and fee structure. The NPRM concludes with the regulatory
analysis and notices.
IV. UCR Fee Proposals for Calendar Year 2010
In the course of developing its fee recommendation for 2010, the
Board considered several different proposals, both before and after
submitting a recommendation on April 3, 2009. Some of these proposals,
in addition to the proposal formally recommended, were either supported
by different interests on the Board or were considered for possible
substitution for the recommended proposal. Each proposal is set out in
this NPRM for public comment; however, FMCSA does not believe that each
proposal satisfies the statutory requirements. After setting out and
assessing each proposal, FMCSA proposes a fee and fee bracket structure
that is based on one of the proposals with modifications to meet the
statutory requirements.
A. The UCR Plan Recommendation
The first proposal is the UCR Plan formal recommendation. The
Board's fee recommendation was approved by a vote of a majority of the
members of the Board on February 12, 2009, and was submitted to the
Secretary on April 3, 2009. It is available at
http://www.regulations.gov
under the docket number shown above. It recommends
establishing the fee and fee bracket structure shown in the following
table:
Table 3--UCR Board Formal Fee and Bracket Recommendation for 2010 Transmitted on April 3, 2009
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Fee per entity
for exempt or
Number of commercial motor non-exempt Fee per entity
vehicles owned or operated by motor carrier, for broker or
Bracket exempt or non-exempt motor motor private leasing
carrier, motor private carrier, carrier, or company
or freight forwarder freight
forwarder
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B1............................................ 0-1............................. $83 $83
B2............................................ 2-5............................. 166 ..............
B3............................................ 6-20............................ 497 ..............
B4............................................ 21-100.......................... 1,741 ..............
B5............................................ 101-1,000....................... 8,373 ..............
B6............................................ 1,001 and above................. 82,983 ..............
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The Board assigned its Revenue and Fees Subcommittee responsibility
for calculating the overall revenue requirement and recommending fees
and the fee bracket structure.\4\ The Board then reviewed the analysis
conducted by the Revenue and Fees Subcommittee and selected the fees
and fee bracket structure that it recommended to FMCSA.\5\
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\4\ The membership of the Subcommittee is shown in Appendix BB
of the April 3 transmittal.
\5\ The FMCSA designated representative abstained from the
Board's vote regarding the fee recommendation to prevent any real or
potential conflict of interest due to his position within FMCSA in
reviewing the Board's recommendation and setting the fees under the
statute.
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During the course of the Subcommittee and Board consideration of
various proposals, industry representatives on the Board \6\ took the
position that they would not support any recommendation that adjusted
the
[[Page 45587]]
fees beyond the amount necessary to reflect the statutory amendment
changing the definition of commercial motor vehicle for purposes of
calculating fleet size. Such a proposal, which was presented, but not
voted on, at the Board's February 12, 2009, public meeting, is set out
in the following table:
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\6\ Under 49 U.S.C. 14504a(d)(1)(B)(iii), five of the fifteen
members of the board are ``from the motor carrier industry.''
Table 4--Proposed Fee and Fee Structure for 2010 Based on Revised Definition of CMV
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Fee per entity
for exempt or
Number of commercial motor non-exempt Fee per entity
vehicles owned or operated by motor carrier, for broker or
Bracket exempt or non-exempt motor motor private leasing
carrier, motor private carrier, carrier, or company
or freight forwarder freight
forwarder
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B1............................................ 0-1............................. $61 $61
B2............................................ 2-5............................. 122 ..............
B3............................................ 6-20............................ 366 ..............
B4............................................ 21-100.......................... 1,281 ..............
B5............................................ 101-1,000....................... 6,163 ..............
B6............................................ 1,001 and above................. 61,081 ..............
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These two proposals in Tables 3 and 4 are similar with one major
exception. The Board's recommendation (Table 3) was premised on an
assumption that only 260,466 motor carrier entities would register with
the UCR Plan in 2010, out of the 433,535 motor carrier entities that
FMCSA and the Board identified as active. The proposal informally
supported by industry representatives (Table 4) assumed that all
433,535 apparently active entities will register in 2010. Because of
the similarity between these two proposals, they can be discussed
together for the purpose of assessing their compliance with the
statutory requirements.
The discussion below of the development of the population will
address the difference between the two proposals. The methodology the
Board and FMCSA used to derive the 433,535 figure is discussed later in
this section. Table 4 is particularly significant in that it sets the
new ``baseline'' for the UCR fee and fee structure based on the
statutory change amending the definition of CMV which removed trailers.
Before discussing the recommendation and various alternative proposals,
FMCSA will discuss the elements common to each proposal.
1. Certification of State Revenues
The first step in certifying State revenue entitlements is to
establish the participating jurisdictions for 2010. Section
14504a(e)(1) of the statute established a final deadline of August 10,
2008, for participation by the 51 States eligible to participate in the
UCR Plan and Agreement.\7\ Of the 38 States that participated in SSRS
in 2006, all but two, California and North Carolina, agreed to
participate in the UCR in registration year 2007. Of the thirteen
States that did not participate in SSRS, only Oregon agreed to
participate in the UCR for registration year 2007.
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\7\ The District of Columbia, which is not participating, is
considered a State for this purpose (49 U.S.C. 13102(21)).
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Prior to the August 10, 2008, statutory deadline, both California
and North Carolina, formerly States participating in SSRS, joined the
UCR Plan. Oregon withdrew from participation and Pennsylvania,\8\
Alaska and Delaware, which had not participated in SSRS, agreed to
participate in the UCR for registration year 2008 and subsequent years.
Therefore, there are now 41 States participating and 10 States
(including the District of Columbia) not participating.
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\8\ Pennsylvania did not participate in SSRS; however, the
statute permits it to collect revenues generated under the UCR
Agreement in an amount equivalent to the amount it collected in
intrastate registration fees from interstate motor carriers in 2004.
49 U.S.C. 14504a(g)(2).
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To develop a nationwide figure for the replacement revenues needed
under the UCR Agreement, the Board asked those States that either had
participated in SSRS or had intrastate registration revenues
statutorily authorized to be included in the total revenue amount to
provide information on the revenues they received for the registration
year 2004. This was the year specified in the statute for establishing
the amount of revenues they were entitled to receive under the UCR
Agreement. The total certified State revenue figure for UCR for 2010 is
$106,777,060. (See Table 5 which is based on Exhibit D to the Board's
recommendation.)
SAFETEA-LU caps the maximum revenue figure for other UCR States
that did not participate in SSRS at $500,000 per year (49 U.S.C.
14504a(g)(3)). Because two such non-SSRS States have agreed to
participate in the UCR for registration year 2010 (Alaska and
Delaware), the Board added $1,000,000 to the total entitlement figure,
bringing the total State revenue requirement for 2010 to $107,777,060.
The Board's calculation of the total revenue for 2010 was properly
based upon the revenues collected by the participating States (both
under SSRS and for intrastate registration of interstate carriers) for
the calendar year 2004. These State revenue entitlements are unchanged
from the entitlements for 2008 and 2009, which were previously approved
by FMCSA orders. In accordance with 49 U.S.C. 14504a(g)(4), FMCSA
proposes to approve the amount of revenue under the UCR Agreement to
which each State participating in 2010 is entitled, as specified in
Table 5.
Table 5--State UCR Revenue Entitlements
------------------------------------------------------------------------
Total 2010 UCR
State revenue
entitlements
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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 45588]]
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
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Sub-Total........................................ 106,777,059.81
Alaska............................................... 500,000
Delaware............................................. 500,000
------------------
Total State Revenue Entitlement.................. 107,777,060
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2. Administrative Costs
Under section 14504a(d)(7) of the statute, the costs incurred by
the Board to administer the UCR Agreement are eligible for inclusion in
the total revenue to be collected. The Board continues to estimate
$5,000,000 for 2010 administrative expenses, and included that amount
in the revenue target.
3. Revenue Target
In addition to the 2010 State revenue target ($107,777,060) and the
administrative expenses ($5,000,000), the Board also included a reserve
in its revenue target recommendation to FMCSA an additional amount of
$563,885, equal to one-half of one percent of the State revenue total
and administrative expenses. This calculation methodology is consistent
with the 2007 final rule. This brings the overall UCR entitlement to
$113,340,945.
4. Carrier Population
The Board's recommendation is based on a method for determining the
carrier population that is different from the one used in 2007. In
2007, the Board assumed that revenues would be generated ``from all
motor carrier entities involved in interstate commerce.'' Each of the
five categories of motor carrier entities is defined by statute (in
some cases with modifications or additions found in section 14504a) as
shown in Table 6 below.
Table 6--Categories of Motor Carrier Entities
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Category Definition in 49 U.S.C.
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Motor Carrier................ 13102(14) and 14504a(a)(5).
Motor Private Carrier........ 13102(15).
Freight Forwarder............ 13102(8) [Freight forwarders that operate
motor vehicles are treated as motor
carriers. 13903(b) and 14504a(b)].
Broker....................... 13102(2).
Leasing Company.............. 14504a(a)(4).
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To estimate the number of 2007 UCR entities, the Board (using the
SafetyNet system) filtered data from the FMCSA Motor Carrier Management
Information System (MCMIS) to capture carriers that had updated their
MCS-150 census file \9\, had an inspection, crash, safety audit, or
compliance review recorded within the past 12 months (March 1, 2006,
through February 26, 2007). Applying this criteria (or filter) to
identify recent activity to approximately 730,000 carriers listed in
the database, the Board filtered out almost 380,000 carriers, leaving
an estimated total number of active interstate carriers of 350,698. The
Board then considered freight forwarders and brokers listed in the
FMCSA Licensing and Insurance (L&I) System. The number, as provided by
FMCSA, was approximately 19,000. After freight forwarders that also
operate CMVs were excluded to avoid double counting, the Board
estimated the total number of freight forwarders and brokers as 14,575.
Summing the 350,698 active interstate carriers and 14,575 freight
forwarders and brokers, the Board arrived at a total affected
population of 365,273.
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\9\ Pursuant to 49 CFR 390.19 Motor carrier identification
report, a motor carrier must file its update of the MC-150 form
every 24 months.
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To establish its carrier population estimate for 2010, the Board
began with the MCMIS database for February 4, 2009, and applied the
same filters used in 2007 with the minor change of extending the
activity period to 15 months. The Board also included in the set of
filters whether the carrier had registered under UCR. In addition, the
Board took L&I data on September 10, 2008, and, as before, filtered it
to avoid double counting. For 2010, this process yielded an estimate of
433,535 for the full universe of carriers, brokers and freight
forwarders.
The Board then adjusted the estimated full universe by the
percentage of entities that had actually registered in each of the six
brackets specified in the fee structure, compared to the number of
entities that the Board had determined were potential registrants in
each bracket. This approach yielded a total estimated population of
260,466 carriers, brokers and freight forwarders, as illustrated by the
following table. This table contains the information in Figures 13 and
14 \10\ from the Board's recommendation and provides the percentages
used by the Board to adjust its population estimates.
---------------------------------------------------------------------------
\10\ See figures 13 and 14 as shown on page 8 of the April 3,
transmittal.
[[Page 45589]]
Table 7--Summary of Board Population Estimate for 2010
----------------------------------------------------------------------------------------------------------------
2008
Bracket 2008 Full 2008 Percent (%) 2010 Full 2010
universe Registered registered universe Population
(A) (B) (C) = B/A (D) (E) = D x C
----------------------------------------------------------------------------------------------------------------
1............................ Brokers & 16,457 2,630 16.0 16,457 2,630
Freight
Forwarders.
1............................ 0-1............. 202,415 116,163 57.4 194,425 111,578
2............................ 2-5............. 89,773 56,489 62.9 145,266 91,408
3............................ 6-20............ 85,015 57,946 68.2 65,155 38,275
4............................ 21-100.......... 30,716 23,566 76.7 17,350 13,311
5............................ 101-1,000....... 8,118 6,800 83.8 3,590 3,007
6............................ 1,001-More...... 785 690 87.9 292 257
----------------------------------------------------------------
Totals................... ................ 433,279 264,284 ........... 433,535 260,466
----------------------------------------------------------------------------------------------------------------
The Board's position in adopting this approach was that it was
unreasonable to expect the States to register and collect fees from all
potential registrants. Based on the historical registration experience,
the Board also believed that this approach increased the likelihood of
collecting the target revenues, although the approach was potentially
vulnerable to under-collection if carriers registered in brackets
different from those to which they would be expected to belong to,
based on MCMIS. Industry representatives voiced concern over this
approach, contending it benefited potential registrants who had been
and continued to be noncompliant, while it increased the burden on
compliant registrants.
5. Number of Fee Brackets
The Board recommended the same number of brackets for 2010 that it
had recommended in 2007. The Board decided to use the maximum number of
brackets allowed by statute, thereby reducing the range of fleet sizes
within individual brackets. The Board revised the first bracket for
2010 from 0-2 to 0-1, to reflect the elimination of towed units
(trailers) and similarly, the second bracket was changed from 3-5 to 2-
5. The Board retained brackets 3 through 6 as they had been established
in 2007.
6. Fee Levels for Each Bracket
As discussed above under Section IV.A.3. Revenue Target, the
Board's target revenue figure with administrative costs and reserve for
2010 is $113,340,945. To determine how to allocate the total
entitlement figure of $113,340,945 across the six brackets, the Board
used a model that calculated (1) the number of entities in each
bracket; (2) the revenues generated by each bracket at different fee
amounts; (3) total revenues; and (4) any surplus or deficit from the
$113,340,945 target figure. The Board also considered fairness in terms
of fees per motor vehicle while assigning the fees for each bracket.
This model is consistent with the one used in 2007, it ensures that the
maximum fee per commercial motor vehicle in any given bracket would be
no higher than the maximum fee per commercial motor vehicle in the next
smaller bracket. The fees recommended by the Board range from a low of
$83 for carriers in the lowest bracket (0 to 1 CMVs) to a high of
$82,983 (the 1001-or-greater CMVs bracket). (See Table 3.) The Board
estimated that this fee structure would generate $113,338,310 in
revenues. This amount is slightly below the target figure, with a
projected deficit of $2,635 for the UCR registration year 2010.\11\
---------------------------------------------------------------------------
\11\ A deficit arises when rounding is not applied to the fees,
otherwise the total revenue equals $113,354,360, which leads to a
surplus of $13,415.
---------------------------------------------------------------------------
B. The FMCSA Analysis
FMCSA's primary issues with the April 3 Board recommendation
involve: (1) The need to recognize the revenue shortfalls caused by
``bracket shifting,'' i.e., motor carriers registering in a fee bracket
that is different from that 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.
1. Bracket Shifting
The UCR registration fees and fee brackets have been based on the
assumption that motor carrier entities subject to UCR registration
requirements will pay fees based on the number of vehicles (fleet size)
reported in the motor carrier identification report (Form MCS-150).
Under 49 CFR 390.19, this report is required to be filed with FMCSA and
updated at least biennially. However, experience over three years has
shown that a significant proportion of motor carriers are paying fees
based on fleet sizes that are different than what would be expected
from the fleet sizes reported to FMCSA. Empirical analyses prepared by
or on behalf of a member of the Board have shown that the overall net
effect of this bracket shifting by registering motor carriers has been
a significant reduction in expected revenue (25.04 percent in 2008).
Bracket shifting, which can be appropriate under the statute, occurs
because available data sources used to develop the UCR fees and fee
structures do not always accurately predict actual registrations.
On Form MCS-150, motor carriers are required to report separately
the number of self-propelled vehicles (i.e., power units) of various
types and the number of towed vehicles (i.e., trailers), if any, that
are owned or leased by the carrier, and then total ``the number of each
type of CMV that [it] uses in its U.S. operations.'' See instructions
for item 26, Form MCS-150 at http://www.fmcsa.dot.gov/forms/forms.htm
r-l/MCS-150-Instructions-and-Form.pdf. That information is compiled in
MCMIS. The data, including the number of self-propelled and towed CMVs
operated by motor carriers, was and is made available to the Board to
enable it to develop its fees and fee bracket structure. The fees for
the registration years 2007, 2008 and 2009 were developed by the Board
on the assumption that each motor carrier that registered would pay a
fee according to the bracket that is indicated by the number of
vehicles owned and operated (both self-propelled and towed) reported in
the MCMIS database. For 2010, because of the change in the applicable
definition for CMV, the fleet sizes and applicable fees will be
determined only by the number of self-propelled CMVs.
There are several ways that a motor carrier entity can determine
its fleet size. Fees charged to a registering motor carrier or freight
forwarder ``shall be based on the number of commercial motor vehicles
owned or operated * * *'' (49 U.S.C. 14504a(f)(1)(A)(i)). A
[[Page 45590]]
CMV is ``owned or operated'' by the motor carrier or freight forwarder
if, during the registration year, it is either registered under Federal
or State law (or both) or controlled under a ``long term lease'' (49
U.S.C. 14504a(f)(2)). The UCR Plan has determined that a lease of a CMV
must be for more than 30 days to be considered a long term lease. See
http://www.ucr.in.gov/MCS/2009%20UCR%20Instruction%20Sheet.doc.
However, FMCSA requires that all leased vehicles, long term or
otherwise, be reported on the MCS-150.
A registering motor carrier or freight forwarder then has the
option of basing the number of CMVs owned or operated on either (1) the
number reported on its most recently filed MCS-150; or (2) the total
number owned or operated for the 12-month period ending on June 30 of
the year preceding the registration year (49 U.S.C. 14504a(f)(3)). This
number is determined, for either option, after excluding leased
vehicles that are under lease terms of 30 days or less.
http://www.ucr.in.gov/MCS/2009%20UCR%20Instruction%20Sheet.doc.
A motor carrier may include in its calculation of fleet size ``any commercial
motor vehicle'' (49 U.S.C. 14504a(f)(3)) and ``any self-propelled
vehicle used on the highway in commerce to transport passengers or
property for compensation regardless of the gross vehicle weight rating
of the vehicle or the number of passengers transported by such
vehicle'' (49 U.S.C. 14504a(a)(1)(B)). On the other hand, motor
carriers and motor private carriers may elect not to include any CMV
used ``exclusively in the intrastate transportation of property, waste,
or recyclable material'' (49 U.S.C. 14504a(f)(3)).
Tables 8 and 9 below show the effect of bracket shifting in 2008.
Table 8 shows the fee brackets that motor carriers selected when
registering under the UCR Plan for 2008 and compares that to the
brackets in which the carriers would have registered if the fleet size
used was derived from MCMIS. Table 9 shows the revenue impacts of the
brackets shifting in Table 8. A board member presented these tables to
the Board during public meetings in June and July, 2009, and the tables
have been placed in the docket.
Table 8--2008 UCR Registration
--------------------------------------------------------------------------------------------------------------------------------------------------------
Paid bracket
MCMIS Bracket ---------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 Totals
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 107,277 7,109 1,617 94 6 0 116,103
2....................................... 18,732 33,518 4,002 108 5 0 56,365
3....................................... 6,132 10,390 40,086 1,191 18 2 57,819
4....................................... 1,092 1,026 5,968 15,264 174 0 23,524
5....................................... 253 112 429 1,714 4,265 21 6,794
6....................................... 45 4 19 50 182 388 688
---------------------------------------------------------------------------------------------------------------
Totals.............................. 133,531 52,159 52,121 18,421 4,650 411 261,293
---------------------------------------------------------------------------------------------------------------
Fees paid........................... $5,207,709 $6,050,444 $12,039,951 $14,847,326 $17,856,000 $15,412,500 $71,413,930
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 9--Revenue Impact 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
Paid bracket
MCMIS Bracket ---------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 Totals
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................. .............. $(547,393) $(310,464) $(72,098) $(22,806) ............... $(952,761)
2................................. $1,442,364 ............... (460,230) (74,520) (18,620) ............... 888,994
3................................. 1,177,344 1,194,850 ............... (684,825) (64,962) $(74,538) 1,547,869
4................................. 837,564 707,940 3,431,600 ............... (527,916) ............... 4,449,188
5................................. 961,653 417,088 1,548,261 5,200,276 ............... (706,860) 7,420,418
6................................. 1,685,745 149,536 708,111 1,834,700 6,126,120 ............... 10,504,212
---------------------------------------------------------------------------------------------------------------------
Revenue change................ 6,104,670 1,922,021 4,917,278 6,203,533 5,491,816 (781,398) 23,857,920
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Numbers in parentheses indicate a positive revenue impact whereas numbers not in parentheses indicate a negative revenue impact.
For example, of the 261,293 total number of carriers registered for
2008 (as of the date of the analysis in the above tables), 116,103
appeared to have fleet sizes from the MCMIS data that indicated that
they should have registered in the lowest UCR fee bracket. However,
almost 9,000 of those carriers registered in a higher bracket, for a
net revenue gain of almost $1 million. On the other hand, 26,254
carriers registered in the lowest bracket (MCMIS Bracket 2-6, under
Paid Bracket 1) although the MCMIS data indicated that they should be
registered in a bracket with a higher fee. The net result was a revenue
yield that was over $6.1 million less than expected. Similar patterns
appear in the other brackets--some carriers are registering in higher
brackets than expected--but significant numbers of carriers registered
in lower brackets. For registration year 2008, as Table 9 shows, the
net reduction in the expected revenue caused by bracket shifting was
$23,857,920. This represented about a 25.04 percent shortfall in the
expected revenues for 2008.
This amount was a substantial portion of the total revenue
shortfall of $31,159,905 experienced by the UCR Plan for registration
year 2008. Shortfalls in 2007 and 2009 were apparently due to a similar
phenomenon. In order to fulfill the statutory objective of ensuring
that the revenues derived from the fees are sufficient to provide the
revenues to
[[Page 45591]]
which the participating States are entitled (see 49 U.S.C.
14504a(f)(1)(E)(i)), it appears to FMCSA that an adjustment needs to be
applied to the current fees to recognize the occurrence of bracket
shifting.
2. Compliance and Enforcement
Another factor affecting the revenues derived from the UCR
registration fees is the difficulty that participating States have in
registering all of the motor carrier entities that appear in the FMCSA
MCMIS database. Filtering that data in order to identify activity, the
Board and FMCSA based the initial fees established in 2007 on the
expectation that 365,273 motor carrier entities were active and would
register (Fees for Unified Carrier Registration Plan and Agreement
NPRM, 72 FR 29472, 29475, May 29, 2007). In the April 3 submission, the
Board developed an estimated total of 433,535 entities that would be
active in 2010 by updating its activity indicia. However, the formal
recommendation posited that only 260,466 of those entities would
register for 2010, a relatively low level of compliance. The proposal
supported by the motor carrier industry representatives, on the other
hand, posited that all 433,535 of these entities would register for
2010, even though during the past three years the UCR Plan has never
achieved 100 percent compliance. See Table 2.
The reason for and solutions to this level of compliance is a
matter of significant disagreement between the States and industry
representatives on the Board. States have taken the position that low
compliance is due to limitations in the MCMIS data that prevent
identification of the appropriate active population, combined with
industry reluctance to register. Industry representatives have taken
the position that insufficient State enforcement activities are to
blame.
FMCSA believes that, though no realistic level of enforcement would
lead to 100 percent compliance, increased enforcement efforts on the
part of the participating States will be able to increase compliance
rates to a significant degree. FMCSA requests public comment on the
reasons for the low level of compliance. FMCSA also requests public
comment on potential solutions to determining the reasonableness of the
compliance and enforcement efforts by the States, including how they
would support a reasonable adjustment in the current fees.
3. The Board's Response to FMCSA Concerns: Alternative Proposals
In response to FMCSA concerns regarding the April 3 fee
recommendation, the Board's Revenue and Fee Subcommittee considered two
alternative fee proposals taking into account FMCSA's principal areas
of concern: Appropriate population definition, compliance rates, and
bracket shifting. These proposals relied upon a carrier population of
433,535, and used the current bracket structure. Both proposals
included a compliance factor, which indicated that it would be
reasonable to expect 90 percent of motor carrier entities in the
participating States to register, and 80 percent of the entities in
non-participating States to register. This factor has been named the
Registration Percentage Reasonableness, or RPR Factor.
The ten non-participating jurisdictions receive no revenues from
the UCR Plan, and thus have little motivation to devote resources to
enforcement of the UCR registration. Entities from those States engaged
in interstate transportation activities can only be subject to possible
enforcement if they conduct operations in a participating State. Data
reviewed by FMCSA indicates that only about 40 percent of motor carrier
entities in non-participating States are registering with the UCR Plan.
The first alternative proposal (Table 10) assumed that the
historical trend of revenue shortfall caused by bracket shifting would
continue in 2010 at the 2008 rate. The second proposal (Table 11)
assumed that the bracket shifting rate for 2010 would be about half of
the 2008 rate. This assumption was based on the fact that, under the
new definition of CMV, 2010 fleet sizes are estimated to approximate
one-half of the prior years' fleet sizes. The development of these
proposals was set out in the presentation made to the Board on July 9,
2009, which has been placed in the docket for this rulemaking.
Applying these adjustments produced fees shown in the following two
tables:
Table 10--Alternative Fee Proposal for 2010 (No. 1)
----------------------------------------------------------------------------------------------------------------
Fee per entity
for exempt or
Number of commercial motor non-exempt Fee per entity
vehicles owned or operated by motor carrier, for broker or
Bracket exempt or non-exempt motor motor private leasing
carrier, motor private carrier, carrier, or company
or freight forwarder freight
forwarder
----------------------------------------------------------------------------------------------------------------
B1............................................ 0-2............................. $99 $99
B2............................................ 3-5............................. 295 ..............
B3............................................ 6-20............................ 587 ..............
B4............................................ 21-100.......................... 2,047 ..............
B5............................................ 101-1,000....................... 9,754 ..............
B6............................................ 1,001 and above................. 95,250 ..............
----------------------------------------------------------------------------------------------------------------
[[Page 45592]]
Table 11--Alternative Fee Proposal for 2010 (No. 2)
----------------------------------------------------------------------------------------------------------------
Fee per entity
for exempt or
Number of commercial motor non-exempt Fee per entity
vehicles owned or operated by motor carrier, for broker or
Bracket exempt or non-exempt motor motor private leasing
carrier, motor private carrier, carrier, or company
or freight forwarder freight
forwarder
----------------------------------------------------------------------------------------------------------------
B1............................................ 0-2............................. $83 $83
B2............................................ 3-5............................. 246 ..............
B3............................................ 6-20............................ 490 ..............
B4............................................ 21-100.......................... 1,709 ..............
B5............................................ 101-1,000....................... 8,141 ..............
B6............................................ 1,001 and above................. 79,500 ..............
----------------------------------------------------------------------------------------------------------------
The FMCSA fee proposal described below in Section V is derived from
the fee and fee bracket structure set forth in Table 10.
V. The FMCSA Fee Proposal
FMCSA and the Board are required to consider the factors
established by statute and laid out in detail in Section II, Statutory
Requirements for UCR Fees, above. In addition, FMCSA is required to
base its fee determination on the Board's recommendation. This
requirement does not, however, obligate FMCSA to adopt the Board's
recommendation without modification. To the contrary, FMCSA has an
independent responsibility to ensure that any fees it sets meet the
statutory requirements set forth at 49 U.S.C. 14504a.
In discharging its statutory duty, FMCSA carefully examined the
Board's entire fee recommendation, including the methodology and
specific findings of the Board. FMCSA also independently 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. FMCSA does not propose to set the fee contained in the
Board's April 3 recommendation because FMCSA believes that it does not
meet the statutory requirements. FMCSA has developed a proposal based
on the alternative proposal shown in Table 10, above.
A. Adjustment for Change in CMV Definition
The alternative proposals started with the revenue requirement,
calculated (as described above) to be $113,340,945, and then estimated
the maximum revenue that would be collected, taking into account the
change to the definition of CMV that includes power units only. Table
12, below, shows this calculation for a population close to, but not
exactly the same as, the full population. Multiplying the number of
motor carrier entities in each bracket by the fees per entity yields
the total revenues for each bracket, as shown in the third column from
the left. Summing across all six brackets yields the maximum total
revenue that could be collected in 2010 (assuming full compliance and
no bracket shifting). This amount would be just over $70 million, well
short of the $113 million revenue requirement.
The elimination of trailers from the definition of CMV reduces many
carriers' fleet sizes, causing some of them to drop into a lower
bracket and, consequently pay less. Thus, 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.
According to the alternative proposals, increasing each fee by a
factor of 1.617905 would raise revenues to $113 million after the
change in the CMV definition, all other things being unchanged. This
adjustment is shown in the final two columns on the right--the fees
have been increased by a factor of almost 1.618, and the totals for the
brackets are shown to total the $113 million revenue requirement.
Table 12--Derivation of Fees Needed To Generate the Full Revenue Requirement With 100% Compliance and No Bracket
Shift
----------------------------------------------------------------------------------------------------------------
Current
Bracket Current fee Carriers Revenue fees times Revenue
1.618
----------------------------------------------------------------------------------------------------------------
0-2...................................... $39 267,144 $10,418,616 $63 $16,830,072
3-5...................................... 116 76,499 8,873,884 188 14,381,812
6-20..................................... 231 56,321 13,010,151 374 21,064,054
21-100................................... 806 17,260 13,911,560 1,304 22,507,040
101-1000................................. 3,840 3,513 13,489,920 6,213 21,826,269
1001+.................................... 37,500 276 10,350,000 60,671 16,745,196
----------------------------------------------------------------------
Total................................ ........... 421,013 70,054,131 ........... 113,354,443
----------------------------------------------------------------------------------------------------------------
Because these calculations exclude any consideration of the effect
of either compliance or bracket shift, they show an unrealistically
high collection of revenue. The fees would have to be set higher in
order to overcome these additional factors affecting overall revenue.
However, it is also clear, as even the motor carrier industry interests
recognize, that an increase of more than 61 percent is necessary just
to account for the statutory change.
B. Registration Percentage Reasonableness (RPR) Factor
In response to FMCSA concern that the Board's recommendation did
not take into account improved enforcement activities, the alternative
proposals included a goal of 90 percent
[[Page 45593]]
compliance by motor carrier entities based in participating States. For
entities in the non-participating States, however, the alternative
proposals did not consider a compliance target of 90 percent to be
feasible. Because those States do not receive revenues through the UCR
system, they do not have the incentive to exert effort on enforcement;
and compliance rates could well remain low. For this reason, the
alternative proposals used a lower goal of 80 percent compliance for
registration by entities in the non-participating States.
While FMCSA acknowledges that 100 percent compliance may not be
feasible, it agrees with the concept of setting fees based on an
assumption of significantly improved compliance and enforcement
activities. This concept represents a reasonable compromise between
fairness to compliant carriers, giving incentives to States to improve
enforcement, and maximizing the chance of meeting the States' revenue
requirements.
FMCSA, however, believes that the compliance target included in the
alternative proposals for carriers in non-participating States is
unrealistically high in light of the limited leverage that the
participating States have over enforcement beyond their borders. Recent
data compiled by FMCSA shows compliance rates of approximately 40
percent among carriers based in non-participating States. FMCSA
considers a target of 59 percent in non-participating States to be more
reasonable. FMCSA believes that if participating States improve their
roadside enforcement activities, they will be able to capture potential
registrants from non-participating States when they cross borders into
participating States. Based on data provided by the Board, FMCSA has
determined that currently, only 28 of the 41 participating States, or
just over two-thirds, actively engage in roadside enforcement. If all
41 participating States actively conducted roadside UCR enforcement at
the same level conducted by the 28 participating States, FMCSA believes
that such increased use of this enforcement tool would improve
compliance rates among carriers from the non-participating States.
FMCSA estimates that the current 40 percent compliance rate by carriers
in non-participating States might reasonably be expected to improve to
(41/28) * 40 percent, or 59 percent.
As shown in Table 13, the alternative proposals combined the
assumptions of 90 and 80 percent compliance in participating and non-
participating States respectively, to generate a weighted average
projected compliance rate of 88.85 percent. This table also shows the
effects of FMCSA's adjusted compliance rate of 59 percent in the non-
participating States. The FMCSA proposal produces a weighted average
projected compliance rate of 86.42 percent.
Table 13--Registration Percentage Reasonableness (RPR) Factor
----------------------------------------------------------------------------------------------------------------
Approximate Board's FMCSA's
recent Board's projected FMCSA's projected
population estimated RPR registrations estimated RPR registrations
----------------------------------------------------------------------------------------------------------------
Participating States............ 383,000 90% 344,700 90% 344,700
Non-Participating States........ 50,000 80% 40,000 59% 29,500
-------------------------------------------------------------------------------
Total....................... 433,000 88.85% 384,700 86.42% 374,200
----------------------------------------------------------------------------------------------------------------
C. Shortfall Adjustment Factor
Factoring in both the change in definition of CMV and the RPR, the
first alternative proposal calculated the maximum revenue to be only
88.85 percent of $70,054,131, or $62,239,770, a loss of $7,814,351 and
considerably less than the $113,340,945 revenue requirement. The effect
of bracket shift, calculated at its 2008 rate, would be to reduce the
maximum $70,054,131 revenue by 25.04 percent for a loss of $17,541,552.
Subtracting both the RPR and bracket shift factors from the maximum
anticipated revenue of $70,054,131 yields a reduced maximum anticipated
revenue totaling $44,698,218.
To determine an appropriate fee increase that would remedy the
shortfall, the alternative proposal then divided the maximum adjusted
anticipated revenue ($44,698,218) into the revenue requirement
($113,340,945). This produced a shortfall adjustment factor of about
2.54. Multiplying this factor by the current fees for each bracket
yielded a set of fees with a maximum of $99 per CMV.
Table 14--Derivation of Fee for Alternative Proposal
------------------------------------------------------------------------
Current
Bracket Number of CMVs Current fee times
fee 2.54
------------------------------------------------------------------------
1.............................. 0-2.............. $39 $99
2.............................. 3-5.............. 116 295
3.............................. 6-20............. 231 587
4.............................. 21-100........... 806 2,047
5.............................. 101-1,000........ 3,840 9,754
6.............................. 1,001 and above.. 37,500 95,250
------------------------------------------------------------------------
The second alternative proposal included the same analysis set
forth above, but with a 12.52 percent bracket shift factor (instead of
25.04 percent). This was based on the assumption that the bracket
shifting rate for 2010 would be about half of the 2008 rate. This
assumption was based on the fact that, under the new definition of CMV,
2010 fleet sizes are estimated to be approximately one-half of the
prior years' fleet sizes, leaving out trailers and the data
uncertainties associated with them. However, FMCSA does not believe
that the Subcommittee provided convincing support or justification for
this assumption.
[[Page 45594]]
D. FMCSA Adjustments
FMCSA agrees with the basic principles of this alternative fee
proposal, but makes several adjustments. First, as discussed in Section
V.B., above, the Agency's proposal adjusts the RPR factor and resulting
compliance rate slightly--from 88.85 percent to 86.42 percent--to
reflect the difficulty of increasing compliance in non-participating
States.
Second, the Agency's proposal is based on a reconsideration of the
effects of increasing the compliance rate. The alternative proposal's
calculations assume that registering 88.85 percent of carriers would
mean bringing in 88.85 percent of revenue. However, compliance rates
measured as a percentage of carriers will not be directly proportional
to revenues. This is because carriers with different fleet sizes pay
different fees, and compliance rates vary by carrier size. As shown
below, increasing revenue collection to 88.85 percent of the maximum
available revenue would represent only a small increase from existing
levels and would not reflect the effect that projected increased
compliance levels of 80 or 90 percent of carriers would have on
revenue. To address this issue, FMCSA developed a proposal that
calculates the effect of increased registration rates on revenue
collection.
The FMCSA proposal starts by estimating the total revenue that the
existing UCR fee structure would bring in if there were (1) 100 percent
participation using the 2010 carrier population; (2) no change in the
definition of CMVs; and (3) no bracket shift. This estimate is made by
multiplying the current fee for each bracket by the total number of
active carriers in the MCMIS data base falling into that bracket, based
on the previous CMV definition (which included both power units and
trailers). Freight forwarders and brokers are included in the first
bracket. Summing the products across all six brackets yields
$123,964,113 in revenue, as shown in Table 15.
Table 15--Calculation of Maximum Revenue at Existing Fees
------------------------------------------------------------------------
Active Maximum
Bracket carriers Current fee revenue by
(MCMIS)* per entity bracket
------------------------------------------------------------------------
1**........................... 218,829 $39 8,534,331
2............................. 89,773 116 10,413,668
3............................. 85,058 231 19,648,398
4............................. 30,716 806 24,757,096
5............................. 8,118 3,840 31,173,120
6............................. 785 37,500 29,437,500
-----------------------------------------
Total..................... 433,279 ........... 123,964,113
------------------------------------------------------------------------
* Population scaled down from 433,322 to the 2008 estimate of 433,279.
** Includes brokers and freight forwarders.
This amount represents the most that the UCR Plan could generate if
no changes were made to the existing fees. (Note that this total is
greater than the revenue target of $113,340,945, because the bracket
and fee structure was originally developed assuming a somewhat smaller
active population.)
Starting with this maximum revenue ($123,964,113), FMCSA then
estimated the effects of bracket shifting. Assuming that bracket
shifting reduces revenue collection across the spectrum by the same
25.04 percent calculated for registered carriers, FMCSA found that the
maximum revenue would be $123,964,113 * (100 percent-25.04 percent),
which is $92,923,499. The actual amount of revenue collected in 2008
was $76,617,155, which is about 82.5 percent of the adjusted maximum
revenue after bracket shifting is taken into account. The difference
between these two amounts, $16,306,344, is the estimated loss of
revenue resulting from non-compliance. FMCSA believes that some portion
of this lost revenue could be recovered by increasing the compliance
rate.
The FMCSA proposal estimates the amount that could be recovered by
comparing the current compliance rate to the RPR developed for the
alternative proposals and modified by FMCSA. The compliance in 2008 was
270,794 registrants out of a total population of 433,279, for a rate of
62.50 percent. (Note that this rate is considerably lower than the rate
of revenue collection which was 82.5 percent of the maximum revenue
available after the effect of bracket shift. This difference is due to
the greater compliance rate of larger entities, which raises revenue
collections disproportionately.) A compliance rate of 62.50 percent
leaves 37.50 percent noncompliance. Raising the compliance rate to
86.42 percent assumes that most of the current noncompliant carriers
would register. The increase from 62.50 percent compliance to 86.42
percent would mean capturing 63.79 percent of all non-compliant
carriers. (The increase in compliance by 23.92 percentage points out of
the total of 37.50 percent noncompliant carriers would mean that the
improvement in compliance would represent 23.92/37.50 or 63.79 percent
of all noncompliant carriers.)
The next step in FMCSA's approach is to calculate how much of the
$16,306,344 in lost revenues would be brought in by capturing 63.79
percent of the noncompliant carriers. This calculation is difficult to
perform because FMCSA believes there is no data available that can
predict with certainty the fleet sizes of the carriers that would be
brought in to reach the RPR. Nonetheless, it is likely that, just as
with the carrier population as a whole, the carriers that remain non-
compliant despite increased enforcement efforts would have somewhat
smaller fleet sizes. The new registrants captured as a result of
increased enforcement efforts would have larger fleet sizes. Therefore,
the percentage of currently uncollected revenues that would continue to
remain uncollected even after enforcement efforts are improved would be
smaller than the percentage of currently unregistered carriers that
would still remain unregistered.
FMCSA does not know of any method to estimate with certainty the
extent of this effect. However, it is reasonable to assume that the
relationship between the percentage of uncollected revenues and the
percentage of unregistered carriers after the increase in compliance
will be similar to the relationship between the current percentage of
uncollected revenues and current
[[Page 45595]]
percentage of unregistered carriers. Currently, (100 percent-82.5
percent) or 17.5 percent of revenues are not being collected. The ratio
of 17.5 percent in uncollected revenues to the 37.5 percent of carriers
that are not registered is 0.468. As stated previously, with improved
compliance, FMCSA believes that 63.79 percent of non-compliant carriers
can be registered, leaving only 36.21 percent non-compliant.
Multiplying 0.468 by 36.21 percent yields 17.0 percent, which is
FMCSA's estimate of the percentage of currently uncollected revenues
that will remain uncollected even after compliance improves (i.e., even
after registering 63.79 percent of currently noncompliant carriers).
Thus, (100 percent-17.0 percent) or 83.0 percent of the currently
uncollected revenues are assumed to be recoverable when 63.79 percent
of the currently noncompliant carriers are registered. Multiplying the
$16,306,344 in currently uncollected revenues by 83.0 percent yields an
increase of $13,543,247.
This increase in revenue, added to the $76,617,155 that was
collected at current compliance rates, would bring collections to
$90,160,402. However, this estimate does not take into account the
change in the definition of CMV. Eliminating trailers from the
carriers' fleet sizes caused many of them to drop to lower brackets,
where they pay lower amounts. In the absence of a change in fees,
revenue would drop significantly. FMCSA estimates the size of this drop
by comparing the maximum revenue available from the existing
population, as recorded in MCMIS using the new CMV definition, to the
maximum revenue available using the old definition. Comparing the
maximum revenue derived using the new definition of CMV and the 2010
population ($70,018,681) with the maximum revenue derived using the old
definition ($123,964,113) produces a ratio of 0.5648. Applying this
factor to the figure we derived earlier by taking into account the RPR
and bracket shifting ($90,160,402) results in estimated revenues of
only $50,925,322 if the current fees were not increased. This revenue
estimate, based on the 2008 population, would rise very slightly to
$50,955,411 after scaling up by 433,535/433,279 to account for the
slightly larger 2010 population. In other words, after factoring in the
RPR and bracket shifting, FMCSA estimates that the Plan would only
collect $50,955,411 if the fees are not adjusted.
This is far less than the revenue amount the States are entitled to
receive by statute. Consequently, the FMCSA proposal includes an
adjustment factor to remedy this shortfall. Dividing the revenue target
($113,340,945) by the estimated revenue based on current fees
($50,954,411) produces a shortfall adjustment factor of 2.22432.
Applying this factor to the current fees yields FMCSA's proposed fee
structure, as shown in Table 16.
Table 16--Derivation of Fee for FMCSA Proposal
------------------------------------------------------------------------
2009 fee
Bracket Number of CMVs Current fee times
2.22432
------------------------------------------------------------------------
1............................ 0-2............ $39 $87
2............................ 3-5............ 116 258
3............................ 6-20........... 231 514
4............................ 21-100......... 806 1,793
5............................ 101-1,000...... 3,840 8,541
6............................ 1,001 and above 37,500 83,412
------------------------------------------------------------------------
FMCSA believes that this proposal meets the statutory objective of
ensuring that the fees are sufficient to provide the revenues to which
the participating States are entitled. It is based on a reasonable
estimate of the number of active motor carrier entities subject to the
UCR fees. It adjusts the fees to reflect the statutory change in the
applicable definition of commercial motor vehicle. It further adjusts
the fees to recognize the historical occurrence of revenue shortfalls
caused by bracket shifting. Finally, it establishes reasonable targets
for compliance by the motor carrier industry to encourage enhanced
enforcement efforts by the participating States.
VI. Regulatory Changes
In view of the foregoing, FMCSA is proposing to revise 49 CFR part
367 in several respects. First, current subpart A, which contains
regulations implementing the provisions of now-repealed 49 U.S.C.
14504, would be removed in its entirety. Second, the heading of 49 CFR
367.20 would be changed to specify that the fees established would be
applicable to registration years 2007, 2008 and 2009. Third, a new 49
U.S.C. 367.30 would establish the fees applicable to registration years
beginning on January 1, 2010. A technical change is also being proposed
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
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
FMCSA has determined this proposed rule is a nonsignificant
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).
The costs of this NPRM would not exceed the $100 million annual
threshold as defined in Executive Order 12866. 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 in SAFETEA-LU. Because a majority of
the fees under the proposed rule are already being collected under the
UCR system, the total cost of the proposed 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
preliminary regulatory analysis analyzing the rule. A copy of the
preliminary analysis document is included in the docket referenced at
the beginning of this notice.
[[Page 45596]]
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement and Fairness Act (SBREFA), (5 U.S.C.
601-612), requires Federal agencies to analyze the impact of
rulemakings on small entities, unless the agency certifies the proposed
rule will not have a significant economic impact on a substantial
number of small entities. FMCSA has determined that the fees being
proposed in this rule would affect large numbers of small entities
because the proposed 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.
After careful consideration, however, FMCSA has determined that, in
every case involving a viable small entity, the recommended UCR fee
will be well below the threshold level of one percent of revenues used
for determining significant impacts. This conclusion is based on the
observation that the maximum fee per vehicle is $87, 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.\12\ 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.
---------------------------------------------------------------------------
\12\ 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/_____________________________________-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
preliminarily determined that this proposal would not have an impact of
$136.1 million or more in any one year.
Executive Order 12988 (Civil Justice Reform)
This proposed 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 proposed action under Executive Order
13045, Protection of Children from Environmental Health Risks and
Safety Risks. We have determined preliminarily 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 proposed 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 proposed rule has been analyzed in accordance with the
principles and criteria contained in Executive Order 13132. FMCSA has
preliminarily 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. FMCSA also requests comments on any 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. We have determined that there
are no current new information collection requirements by FMCSA
associated with this proposed rule.
National Environmental Policy Act
The agency analyzed this 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 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.
We have 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 proposed rule under Executive Order 13211,
Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined preliminarily 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.
For the reasons discussed in the preamble, the Federal Motor
Carrier Safety Administration proposes to amend title 49 CFR chapter
III, subchapter B, part 367 as follows:
PART 367--STANDARDS FOR REGISTRATION WITH STATES
1. Revise the authority citation for part 367 to read as follows:
Authority: 49 U.S.C. 13301, 14504a; and 49 CFR 1.73.
[[Page 45597]]
Subpart A--[Removed and Reserved]
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
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 Registration Years 2007, 2008 and 2009.
* * * * *
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
----------------------------------------------------------------------------------------------------------------
Number of commercial motor
vehicles owned or operated Fee per entity for
by exempt or non-exempt exempt or non-exempt Fee per entity
Bracket motor carrier, motor motor carrier, motor for broker or
private carrier, or private carrier, or leasing company
freight forwarder freight forwarder
----------------------------------------------------------------------------------------------------------------
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 .................
----------------------------------------------------------------------------------------------------------------
Issued on: August 28, 2009.
Rose A. McMurray,
Acting Deputy Administrator.
[FR Doc. E9-21232 Filed 9-2-09; 8:45 am]
BILLING CODE 4910-EX-P
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