The Small Business in Transportation Coalition, a trade group representing truckers, carriers and brokers, said it is suing the Indiana Department of Revenue for $1 billion.
SBTC, which made the announcement Nov. 17, alleges that the state’s revenue department has been unlawfully collecting motor carrier registration fees for a decade. The trade group estimates that the department has collected $100 million a year for 10 years under the Unified Carrier Registration program.
Indiana Department of Revenue Commissioner Adam Krupp said the department was selected in 2008 to administer the collection of UCR Plan fees from operators of vehicles engaged in interstate travel. It has received an administrative fee of less than 1% of the total amount collected and distributed over the last decade, according to Krupp.
“We believe this lawsuit is frivolous and will ultimately be dismissed,” Krupp said.
The program emanates from the Unified Carrier Registration Act of 2005, whereby states collect fees from motor carriers to create safety initiatives. According to Indiana’s UCR agreement, the state “has or will have the legal authority, resources and qualified personnel necessary to administer the agreement.”
“We reviewed all the Indiana statutes that have any applicability to motor carriers and we could not find a single statute that allows the Indiana Department of Revenue to register people under the UCR system or collect any fees,” said Jim Bopp, the attorney representing SBTC. “Indiana has never given Indiana Department of Revenue the authority to do this. This is just mind-blowing.”
SBTC is calling for the revenue department to refund truckers who have been made to pay these fees. According to James Lamb, president of SBTC, each independent owner-operator that has paid UCR fees through Indiana would probably get back about $500.
The lawsuit marks the latest chapter in a series of interactions the trade group has had with the revenue department and the UCR board over the past decade. Lamb said he began investigating the fee collection practices in 2010, when he was serving as president of the Association of Independent Property Brokers & Agents, a trade group representing freight brokers that was absorbed into SBTC in 2014.
In 2011, the property brokers and agents sent a letter to the UCR board demanding that it immediately stop collecting “unlawful fees and advise within 10 business days UCR board’s and/or the State of Indiana’s agreement and intent to refund any and all fees collected in violation of federal law.”
Lamb said that the UCR board members “threw their hands up” in response to the letter and directed SBTC’s qualms to Indiana.
“Indiana is the agent of the board,” Lamb said. “That’s not to say that our investigation has relieved the board of its responsibility for compliance with the law. There seems to be mismanagement that is going on with respect to the UCR program, both at the board level and at the agent level in terms of Indiana Department of Revenue.”
In 2016, the Federal Trade Commission charged Lamb and his company, DOTAuthority, with violating federal law by presenting himself as an agent of the U.S. Department of Transportation and inadequately disclosing fees charged to help fleet owners comply with UCR requirements. DOTAuthority offers fleet owners registration services for a fee.
FTC’s complaint states that the defendant took millions from small businesses by sending misleading robocalls and emails that create the “false impression” that he is affiliated with U.S. DOT and the Unified Registration System.
The Unified Registration System combines the various registration forms that carriers use into a single, online registration application. This system, which is administered by the Federal Motor Carrier Safety Administration, is not affiliated with the UCR program.
Indiana’s revenue department’s Motor Carrier Services Division received complaints about marketing tactics by a number of companies, including Lamb’s, and forwarded the complaints to FTC for action.
Lamb said SBTC’s lawsuit is not related to the state revenue department’s role in the federal charge.