Industry Groups Blast UCR Plan while States Support Fee Hike

This story appears in the Oct. 5 print edition of Transport Topics.

In comments to the Federal Motor Carrier Safety Administration about the agency’s proposed sharp Unified Carrier Registration fee increase, industry groups and state enforcement agencies continued to debate the need for and size of the increase.

Last month, FMCSA proposed to more than double the UCR fees truck fleets must pay, raising them by 122% to between $87 and $83,412 per company, to compensate for lower-than-expected receipts and changes in federal law that ended the requirement to pay registration fees for trailers.

“The proposed fee does not meet the minimal standards of reasonableness and equity,” the Snack Food Association said in its comments on the regulation. “The insufficiencies in revenue collection are the result of inadequate state enforcement, widespread noncompliance and insufficient data. At a minimum, these institutional shortcomings must be addressed before any fee increase is established.”

The California Trucking Association called the fee increase “too extreme,” adding that it “would accept a fee structure that accommodates elimination of trailing equipment alone.”

UCR was created in 2005 as a replacement for the Single-State Registration System, which required for-hire fleets to pay a $10-per-vehicle fee that was used to fund state enforcement activities.

The new UCR system expanded the registration requirement to include private fleets, freight forwarders, brokers and truck leasing companies, and changed the structure from a per-vehicle fee to a system based on brackets ranging from companies owning fewer than two trucks to those owning more than 1,000.

Expressing the view of the states, which receive the UCR revenue, Michael Fielek, director of the Michigan Public Service Commission’s Motor Carrier Division, said his agency believed FMCSA “appropriately” weighed the issues when setting the fees and “strongly supports the fee structure proposed by FMCSA and requests that the fees be approved without delay.”

Similarly, Jan Skouby, who is with the Missouri Department of Transportation, backed the UCR increase because the funds generated “are dedicated to safety programs that all states and commercial vehicle partners administer to make our highways safer.”

In protesting the steep fee increase, several fleets and trucking groups raised the poor record of states in getting noncompliant companies to pay the registration fees.

“Unless and until states are penalized for failing to mount a credible enforcement program against noncompliant carriers and brokers, the inequities resulting from this defective program will continue,” said Dick Reiser, executive vice president and general counsel of Werner Enterprises Inc.

Ronald Lennox, vice president of the Canadian Trucking Alliance, called the increase “eye-popping, to say the least,” in the face of a recession that has sharply cut truckers’ revenue.

“Until FMCSA can demonstrate that adequate steps have been taken to address deficiencies in the collection of UCR fees, CTA believes that the proposed 2010 fee structure . . . should not proceed, and that no carrier should be required to pay more than it did in 2009,” Lennox said.

Steve Keppler, interim executive director of the Commercial Vehicle Safety Alliance, cited discussions by the UCR board that showed “stepped-up efforts of states to enforce the program.

“Lack of enforcement by the states is not the major cause of the shortfall,” he said.

In its proposal, FMCSA said it believes states should be able to register roughly 86% of all carriers required to pay the fees, even though in previous years, registrations fell well short of expected levels.

Missouri official Skouby said the way state efforts are measured should be changed to reflect the amount of money states collect, not the number of fleets they register.

“A better compliance measure, therefore, is the amount of collections, instead of a compliance rate,” she said. “Missouri’s current 79.6% compliance rate accomplishes a collection of 90.7% of the fees we believe are due.”

UPS Inc. Vice President Tom Jensen suggested that perhaps a “financial incentive” would improve states’ efforts to register more vehicles. If a state registers only 70% of the fleets it is expected to, then it would receive only 70% of the federal money it would be entitled to under the UCR distribution system.

In its comments, American Trucking Associations, one of the chief critics of the UCR fee proposal, said that given the weakness of the economy, the size of the increase was “not reasonable . . . as required by [federal law].”

The federation also reiterated its claim that, “on the whole, states participating in the UCR program have not done their part to enforce the requirements of the program.”

ATA also accused FMCSA of having a bias favoring the states, saying the agency “very evidently considered only the request of the UCR states in preparing its proposal.”

“The statute does not require so one-sided a process and, in fact, demands a more balanced approach,” ATA said.

In the past, ATA has suggested doing away with UCR and replacing it with direct federal aid, a position supported by more industry groups.

“The problems with the UCR are ultimately incurable,” the Snack Food Association said, adding that the “best solution is for Congress to repeal the UCR.”