Registration Fees to Rise

This story appears in the Sept. 7 print edition of Transport Topics.

Registration fees that trucking companies and freight brokers must pay will more than double to as much as $83,000 in 2010 under a plan put forward by the Federal Motor Carrier Safety Administration last week.

The fees, collected through the Unified Carrier Registration agreement, will rise more than they would have under a proposal made earlier this year by the board that oversees the registration program. Industry groups protested those fees, arguing they punished companies that voluntarily complied with the rules rather than having states step up collection efforts.

Currently, the UCR fees range from $39 for the smallest companies to $37,500 for the largest firms. States use the fee revenue to fund law enforcement programs.

“To my view, they’ve taken the side of the states in this,” said Bob Pitcher, American Trucking Associations vice president for state laws and vice chairman of the UCR board. “The states have said, ‘We’re short of money here and we’re not obliged to do any work for it.’ And FMCSA has nodded and said, ‘We see that you’re short of money; we’ll raise the fees.’ ”

In its proposal, FMCSA said that without an increase, given the number of companies states can reasonably expect to register, UCR would generate only $51 million, less than half the roughly $113 million the program is required to collect under federal law.

“I still look at it as a compromise in many respects because in order for states to get the entitlement, the 113 [million dollars], we’re going to have to register a lot more carriers than we’re currently registering today,” said Bill Leonard, director of the New York State Department of Transportation’s motor-carrier compliance bureau, and member of the UCR board.

The program has yet to generate the mandated revenue targets to fully replace the now-defunct Single-State Registration System, which, along with a change removing trailers from the count of commercial vehicles for registration purposes, led to the proposed fee increase.

Congress created UCR in 2005 as a replacement for SSRS, which taxed only for-hire carriers. ATA and other groups backed the UCR system because it was intended to reduce fees by broadening the base, by requiring private fleets and freight brokers and forwarders to pay.

To calculate the 2010 increase, FMCSA said it divided the revenue goal of $113 million by the $51 million it expected to generate without a fee increase, to calculate a “shortfall adjustment factor of 2.22432;” it multiplied current fees by that factor to calculate the new levels.

So, for the smallest bracket — for companies with two or fewer trucks — the fee increases to $87 from $39; for moderate-sized fleets of 21 to 100 trucks, the fee rises to $1,793 from $806.

At the high end, fleets of more than 1,000 trucks would see annual fees rise to $83,412 from $37,500.

FMCSA said the 2010 structure, which is roughly in line with what the board recommended earlier this year “meet[s] the statutory requirements” for the registration program.

Leonard said for 2009, states have registered roughly 307,000 carriers, or between 70% and 75% of the companies in the federal database used to calculate the fees.

FMCSA assumes that compliance rate will go up to 86.4%, a figure Pitcher called “purely arbitrary.”

“They haven’t looked to see the level of state compliance efforts now,” he said. “They haven’t looked to see how much of what they call bracket shift is due to noncompliance and how much to problems with the underlying data and so forth.”

Bracket shift refers to fleets moving to a lower-cost bracket by registering fewer vehicles than listed in the database.

Rick Schweitzer, general counsel for the National Private Truck Council and a UCR board member, said it was “pretty clear” that FMCSA wants “to ram this through with a 15-day comment period.”

Schweitzer and NPTC, along with ATA, proposed ending UCR earlier this year in favor of more direct aid to states.

“This is not the time to more than double the fees on motor carriers and it just seems that they are trying to subsidize the noncompliant by increasing the fees on those who voluntarily comply,” Schweitzer said of the proposed increase.

Pitcher said the proposed increase “tends to confirm us in our earlier views” about the need for UCR, adding that ATA was “certainly contemplating potential congressional action to get rid of the program.” But with the passage of a new highway bill this year looking doubtful, he said, “it is very unlikely there’s another vehicle” for changing UCR.

ATA could also sue over the fees, he said, noting that “we always think about the courts.”

However, Schweitzer told Transport Topics that probably nothing, short of a change in the law, could reverse the fee increase.