Document ID: FMCSA-2009-0231-0180
Agency: fmcsa
Document Type: Rule
Title: Fees for Unified Carrier Registration Plan and Agreement
Posted Date: 2010-04-27T04:00Z

[Federal Register: April 27, 2010 (Volume 75, Number 80)]
[Rules and Regulations]               
[Page 21993-22012]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ap10-10]                         

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 367

[Docket No. FMCSA-2009-0231]
RIN 2126-AB19

 
Fees for the Unified Carrier Registration Plan and Agreement

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Final rule.

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SUMMARY: This rule establishes annual registration fees and a fee 
bracket structure for the Unified Carrier Registration (UCR) Agreement 
for the calendar year beginning January 1, 2010, as required under the 
Unified Carrier Registration Act of 2005, enacted as Subtitle C of 
Title IV of the Safe, Accountable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users, as amended.

DATES: Effective Date: April 27, 2010.

ADDRESSES: Copies or abstracts of all comments and background documents 
referenced in this document are in Docket No. FMCSA-2009-0231. For 
access to the docket, go to:
     Federal eRulemaking Portal: http://www.regulations.gov. Go 
to the ``Help'' section of regulations.gov to find electronic retrieval 
help and guidelines. Regulations.gov is generally available 24 hours 
each day, 365 days each year.
     DOT Docket Management Facility: U.S. Department of 
Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001. 
Docket Management Facility hours are between 9 a.m. and 5 p.m., e.t., 
Monday through Friday, except Federal holidays.
    Privacy Act: Anyone is able to search the electronic form for all 
comments received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review U.S. 
Department of Transportation's (DOT) complete Privacy Act Statement in 
the Federal Register published on April 11, 2000 (65 FR 19476), or you 
may visit http://docketsinfo.dot.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Julie Otto, Office of Enforcement 
and Program Delivery, (202) 366-0710, FMCSA, Department of 
Transportation, 1200 New Jersey Ave., SE., Washington, DC 20590 or by 
e-mail at: FMCSAregs@dot.gov.

SUPPLEMENTARY INFORMATION: The preamble is organized as follows:

[[Page 21994]]

Table of Contents

I. List of Abbreviations
II. Legal Basis for the Rulemaking
III. Statutory Requirements for the UCR Fees
IV. Background
V. Discussion of Comments on the NPRM
VI. The Final Rule
VII. Regulatory Analyses and Notices

I. List of Abbreviations

    The following is a list of abbreviations used in this document:

Alabama PSC Alabama Public Service Commission
AMSA American Moving and Storage Association
ATA American Trucking Associations
Board Unified Carrier Registration Board of Directors
California DMV California Department of Motor Vehicles
CMV Commercial Motor Vehicle
CTA California Trucking Association
CVSA Commercial Vehicle Safety Alliance
FMCSA Federal Motor Carrier Safety Administration
IFTA International Fuel Tax Agreement
IRP International Registration Plan
MCMIS Motor Carrier Management Information System
Missouri DOT Missouri Department of Transportation
NAICS North American Industry Classification System
NCSTS National Conference of State Transportation Specialists
NPTC National Private Truck Council
Pennsylvania PUC Pennsylvania Public Utility Commission
RPR Registration Percentage Reasonableness
SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users
SSRS Single State Registration System
TCA Truckload Carriers Association
TIA Transportation Intermediaries Association
TRLA Truck Renting and Leasing Association
UCR Unified Carrier Registration
UCR Agreement Unified Carrier Registration Agreement
UPS United Parcel Service

II. Legal Basis for the Rulemaking

    This rule involves an adjustment in the annual registration fees 
for the Unified Carrier Registration Agreement (UCR Agreement) 
established by 49 U.S.C. 14504a, enacted by section 4305(b) of the 
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (SAFETEA-LU) (119 Stat. 1144, 1764 (2005)). Section 
14504a states that the ``Unified Carrier Registration Plan * * * 
mean[s] the organization * * * responsible for developing, 
implementing, and administering the unified carrier registration 
agreement'' (49 U.S.C. 14504a(a)(9)) (UCR Plan). The UCR Agreement 
developed by the UCR Plan is the ``interstate agreement governing the 
collection and distribution of registration and financial 
responsibility information provided and fees paid by motor carriers, 
motor private carriers, brokers, freight forwarders and leasing 
companies * * *'' (49 U.S.C. 14504a(a)(8)).
    Congress in SAFETEA-LU also repealed 49 U.S.C. 14504 governing the 
Single State Registration System (SSRS) (SAFETEA-LU section 
4305(a)).\1\ The legislative history indicates that the purpose of the 
UCR Plan and Agreement is both to ``replace the existing outdated 
system [SSRS]'' for registration of interstate motor carrier entities 
with the States and to ``ensure that States don't lose current revenues 
derived from SSRS'' (S. Rep. 109-120, at 2 (2005)).\2\
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    \1\ This repeal became effective on January 1, 2008, in 
accordance with section 4305(a) of SAFETEA-LU and section 1537(c) of 
the Implementing Recommendations of the 9/11 Commission Act of 2007, 
Public Law 110-53, 121 Stat. 266, 467 (Aug. 3, 2007).
    \2\ The Senate bill's provisions were enacted ``with 
modifications.'' H.R. Rep. No. 109-203, at 1020 (2005) (Conf. Rep.).
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    The statute provides for a 15-member Board of Directors for the UCR 
Plan and Agreement (Board) to be appointed by the Secretary of 
Transportation. The statute specifies that the Board should consist of 
one individual (either the Federal Motor Carrier Safety Administration 
(FMCSA) Deputy Administrator or another Presidential appointee) from 
the Department of Transportation; four directors (one from each of the 
four FMCSA service areas), selected from among the chief administrative 
officers of the State agencies responsible for administering the UCR 
Agreement; five directors from among the professional staffs of State 
agencies responsible for administering the UCR Agreement, to be 
nominated by the National Conference of State Transportation 
Specialists (NCSTS); and five directors from the motor carrier 
industry, of whom at least one must be from a national trade 
association representing the general motor carrier of property industry 
and one from a motor carrier that falls within the smallest fleet fee 
bracket. The establishment of the Board was announced in the Federal 
Register on May 12, 2006 (71 FR 27777). On July 19, 2007, FMCSA 
published a notice announcing the reappointment to the Board of the 
five Board members from the State agencies nominated by NCSTS (72 FR 
39660). On June 30, 2008, FMCSA published a notice announcing the 
reappointment of the members from the four FMCSA service areas to the 
Board (73 FR 36956). On January 28, 2010, (75 FR 4521) FMCSA published 
a request for public comments along with recommendations for 
appointment of the five members from the motor carrier industry.\3\
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    \3\ The terms of the current members from the motor carrier 
industry have expired, but all but one continue to serve until 
either they are reappointed or successors are appointed (49 U.S.C. 
14504a(d)(1)(D)(iii) and (iv)).
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    Among its responsibilities, the Board is required to submit to the 
Secretary of Transportation \4\ a recommendation for the initial annual 
fees to be assessed motor carriers, motor private carriers, freight 
forwarders, brokers and leasing companies (49 U.S.C. 14504a(d)(7)(A)). 
FMCSA is directed to set the fees within 90 days after receiving the 
Board's recommendation and after notice and opportunity for public 
comment (49 U.S.C. 14504a(d)(7)(B)). Subsequent adjustments to the fees 
and fee brackets must be adopted following the same timelines and 
procedures (recommendation by the Board and review and adoption by 
FMCSA) after notice and an opportunity for public comment (Id). As 
provided in 49 U.S.C. 14504a(f)(1)(B): ``The fees shall be determined 
by [FMCSA] based upon the recommendations of the [UCR] Board * * *.'' 
The statute also directs both the Board and FMCSA to consider several 
relevant factors in their respective roles of recommending and setting 
the fees (49 U.S.C. 14504a(d)(7)(A), (f)(1) and (g)). Thus, FMCSA has 
an obligation to consider independently the Board's recommendation in 
light of the statutory requirements, and to make its own determination 
of the appropriate fees and fee bracket structure, including modifying 
the Board's recommendation, if necessary.
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    \4\ The Secretary's functions under section 14504a have been 
delegated to the Administrator of the Federal Motor Carrier Safety 
Administration. 49 CFR 1.73(a)(7), as amended (71 FR 30833, May 31, 
2006).
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III. Statutory Requirements for the UCR Fees

    The statute specifies that fees are to be determined by FMCSA based 
upon the recommendation of the Board. In recommending the level of fees 
to be assessed in any agreement year, and in setting the fee level, 
both the Board and FMCSA shall consider the following factors:
     Administrative costs associated with the UCR Plan and 
Agreement.
     Whether the revenues generated in the previous year and 
any surplus or shortage from that or prior years enable the 
participating States to achieve the revenue levels set by the Board.
     Provisions governing fees in 49 U.S.C. 14504a(f)(1).

[[Page 21995]]

Subsection (f)(1) provides that the fees charged to a motor carrier, 
motor private carrier, or freight forwarder under the UCR Agreement 
shall be based on the number of commercial motor vehicles owned or 
operated by the motor carrier, motor private carrier, or freight 
forwarder. The statute initially defined ``commercial motor vehicles'' 
(CMVs) for this purpose as including both self-propelled and towed 
vehicles (former 49 U.S.C. 14504a(a)(1)(A) and 31101(1)). The fees set 
in 2007, and applied, as well, in 2008 and 2009, were determined on 
that basis. However, section 701(d)(1)(B) of the Rail Safety 
Improvement Act of 2008, Public Law 110-432, Div. A, 122 Stat. 4848, 
4906 (Oct. 16, 2008) amended the definition of CMV for the purpose of 
setting UCR fees for years beginning after December 31, 2009, to mean a 
``self-propelled vehicle described in section 31101 [of title 49, 
United States Code]'' (49 U.S.C. 14504a(a)(1)(A)(ii)). Fees charged to 
a broker or leasing company under the UCR Agreement shall be equal to 
the smallest fee charged to a motor carrier, motor private carrier, and 
freight forwarder.
    Section 14504a(f)(1) also stipulates that for the purpose of 
charging fees the Board shall develop no more than 6 and no fewer than 
4 brackets of carriers (including motor private carriers) based on the 
size of the fleet, i.e., the number of CMVs owned or operated. The fee 
scale is required to be progressive in the amount of the fee. The 
registration fees for the UCR Agreement may be adjusted within a 
reasonable range on an annual basis if the revenues derived from the 
fees are either insufficient to provide the participating States with 
the revenues they are entitled to receive or exceed those revenues (49 
U.S.C. 14504a(f)(1)(E)).
    Overall, the fees assessed under the UCR Agreement must produce the 
level of revenue established by statute. Section 14504a(g) establishes 
the revenue entitlements for States that choose to participate in the 
UCR Plan. That section provides that a participating State, which 
participated in SSRS in the registration year prior to the enactment of 
the Unified Carrier Registration Act of 2005 (i.e., the 2004 
registration year), is entitled to receive revenues under the UCR 
Agreement equivalent to the revenues it received in 2004. Participating 
States that also collected intrastate registration fees from interstate 
motor carrier entities (whether or not they participated in SSRS) are 
also entitled to receive revenues of this type under the UCR Agreement, 
in an amount equivalent to the amount received in the 2004 registration 
year. The section also requires that States that did not participate in 
SSRS in 2004, but which choose to participate in the UCR Plan, may 
receive revenues not to exceed $500,000 per year.
    Participating states are required by statute to use UCR revenue 
``for motor carrier safety programs, enforcement, or the administration 
of the UCR plan and UCR agreement'' (49 U.S.C. 14504a(e)(1)(B)). In 
addition, as permitted by statute, at least one-third of the 
participating states use the revenue produced by the UCR program to 
provide their share of the costs of the Motor Carrier Safety Assistance 
Program (MSCAP) that is not provided by a grant from FMCSA. The purpose 
of the MCSAP grant program is ``to improve commercial motor vehicle 
safety and enforce commercial motor vehicle regulations, standards, or 
orders * * *'' (49 U.S.C. 31102(a)). The UCR revenues that contribute 
to the MCSAP are used primarily for driver/vehicle inspections, traffic 
enforcement, compliance reviews, public education and awareness, and 
data collection. A great deal of the funding is used to pay state 
employee salaries to conduct these activities.

Statutory Requirements for the Fees

    The FMCSA acknowledges stakeholders' concerns regarding all the 
factors under the statute that should have been considered when 
determining the fees. For example, in response to the September 3, 
2009, notice of proposed rulemaking (NPRM) the American Trucking 
Associations, Inc. (ATA) and a number of other industry members and 
associations assert that FMCSA has not considered all of the relevant 
factors under the statute in considering the fees that should be set 
for 2010 for the UCR Plan and Agreement. Specifically, ATA asserts that 
the Agency should have considered: (1) The state of the economy; (2) 
the effect of the fee increase on the trucking industry; (3) the 
continuing failure of the States to audit and enforce UCR Agreement 
requirements; (4) the effect on future collections of the elimination 
of towed vehicles from the fleets; (5) the danger of spiraling fee 
increases; and (6) the creation of a ``moral hazard'' by FMCSA's 
acquiescence to an increase in the fees. However, only one of these 
factors is specified expressly in the statute--the effect of the 
elimination of trailers. The factors that FMCSA believes to be relevant 
under the statute are addressed in more detail below. FMCSA will 
address below several comments regarding the economic significance of 
the rulemaking and the impact of the fees to industry. The Agency has 
chosen to discuss these issues in the most relevant sections of the 
rule, rather than in the section reserved for comments.
    FMCSA's interpretation of its responsibilities under 49 U.S.C. 
14504a in setting fees for the UCR Plan and Agreement is guided by the 
primacy the statute places on the need both to set and to adjust the 
fees so that they ``provide the revenues to which the States are 
entitled.'' The statute links the requirement that the fees be adjusted 
``within a reasonable range'' to the provision of sufficient revenues 
to meet the entitlements of the participating States (49 U.S.C. 
14504a(f)(1)(E), see also 49 U.S.C. 14504a(d)(7)(A)(ii)).
    The legislative history accompanying the enactment of the statute 
in 2005 confirms this primary focus on the need to provide the States 
the revenue levels set in accordance with the statute:

    States that currently participate in the SSRS and choose to 
participate in UCRS [sic] would be guaranteed the revenues they 
derived from SSRS during the last fiscal year ending prior to the 
enactment of this Act. States that did not participate in SSRS but 
opt to join UCRS [sic] would be entitled to annual revenues of not 
more than $500,000. (H.R. Rep. 109-203 at 1019 (2005) (Conf. Rep.) 
(emphasis added))

    The emphasized words support FMCSA's interpretation of the statute, 
which gives primacy to providing the revenue entitlements to the 
participating States in each year.
    Section 14504a(h)(4) gives additional support for this 
interpretation. As noted in the comments by the Commercial Vehicle 
Safety Alliance (CVSA), this provision explicitly requires FMCSA to 
reduce the fees for all motor carrier entities in the year following 
any year in which the depository retains any funds in excess of the 
amount necessary to satisfy the revenue entitlements of the 
participating States and the UCR Plan's administrative costs. No 
analogous provision in the statute requires an increase in the fees in 
the following year to make up for any shortfall in the revenues 
provided by the fees.
    In light of this context, FMCSA has interpreted the statutory text 
that directs that any annual adjustment be ``within a reasonable 
range'' to mean that the determination of what is reasonable must be 
made in light of the statutory objective. Whitman v. American Trucking 
Associations, Inc., 531 U.S. 457, 466 (2001) (``Words that can have 
more than one meaning are given context, however, by their 
surroundings.'') and FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 
120, 132 (2000) (``[T]he meaning--or

[[Page 21996]]

ambiguity--of certain words or phrases may only become evident when 
placed in context.'') Therefore, if consideration of a factor 
frustrates the statutory objective of providing the participating 
States sufficient revenues, the statute does not permit FMCSA to 
consider it as a relevant factor.

IV. Background

    The initial UCR fees and fee structure were published by FMCSA on 
August 24, 2007 (72 FR 48585), which allowed the Board to begin 
collecting fees (49 U.S.C. 14504a). On February 1, 2008, the Board 
submitted the 2008 recommendation to FMCSA, indicating that it was 
``too early to ascertain whether the revenues collected in 2007 will 
equal or approximate the total revenue'' to which the States are 
entitled. A copy of this recommendation is provided in this docket. As 
a result, on February 26, 2008 (73 FR 10157), FMCSA published 
correcting amendments to the 2007 final rule, clarifying that the fees 
and fee structure were established for every registration year unless 
(and until) the Board recommended an adjustment to the annual fees (73 
FR 10157). On July 11, 2008, the Board sent a letter to FMCSA stating 
that the fees would remain the same for 2009 as for 2007 and 2008. The 
Board stated that ``additional time to register entities, check that 
carriers registered in the correct bracket, and establish effective 
roadside enforcement'' would result in better collection of revenue. A 
copy of this letter is provided in this docket. The table below shows 
the fees and fee structure in place from 2007 to 2009.

                                Table 1--UCR Fees and Fee Structure 2007 to 2009
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                                                                               Fee per entity
                                                  Number of CMVs owned or       for exempt or
                                                operated by exempt or non-    non-exempt motor   Fee per entity
                   Bracket                      exempt motor carrier, motor    carrier, motor     for broker or
                                                private carrier, or freight   private carrier,   leasing company
                                                         forwarder               or freight
                                                                                  forwarder
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B1..........................................  0-2...........................               $39               $39
B2..........................................  3-5...........................               116  ................
B3..........................................  6-20..........................               231  ................
B4..........................................  21-100........................               806  ................
B5..........................................  101-1,000.....................             3,840  ................
B6..........................................  1,001 and above...............            37,500  ................
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    From collection years 2007 to the present, some participating 
States have achieved their revenue entitlement while others have 
exceeded it. In the latter case, the excess amount is forwarded to a 
depository established by the Board for distribution to those States 
that have not collected enough fees to reach their entitlement (49 
U.S.C. 14504a(h)(2) and (3)). However, overall, revenue collections in 
2009, like the previous years, have fallen short. The following table 
shows the amount of revenue shortfall for each registration year, based 
on information provided by the Board. The participating States are 
approximately 28 percent short of collecting their revenue entitlement.

                                 TablE 2--UCR Registration Summary 2007 to 2009*
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                                            State revenue       Entities                             Revenue
            Registration year                entitlement       registered     Revenue received      shortfall
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2007....................................      $101,772,400           237,157       $73,937,310       $27,835,090
2008....................................       107,777,060           270,794        76,617,155        31,159,905
2009....................................       107,777,060           282,483        77,148,988        30,628,072
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* Does not include estimated administrative expenses and revenue reserve that are included in the overall
  revenue target.

    In early 2009, the Board began discussions to address the shortfall 
in the 2010 fee recommendation. On February 12, 2009, the Board held a 
public meeting by telephone conference call to discuss the 2010 fees 
and fee structure. At that meeting, a motion was made to recommend a 
proposal that passed with a vote of 10 to 3, with one abstention. On 
April 3, 2009, the Board submitted a recommendation based on this 
proposal to the Secretary. The recommendation is available in the 
docket.
    Upon review by FMCSA, several fundamental issues were identified in 
the assumptions of the April 3 recommendation. To clarify the issues 
and assist the Board, FMCSA hosted a conference call on April 23, 2009, 
with the Board's chair and the chair of the Revenue and Fees 
Subcommittee. After this discussion, the Subcommittee met and discussed 
several options at the May 14, 2009, Board meeting. No consensus was 
reached. At the June 16, 2009, meeting, the Board discussed informal 
options developed by a member of both the Board and the Revenue and 
Fees Subcommittee. The Board voted to reconsider the April 3 
recommendation upon hearing these new options, and the matter was 
referred back to the Subcommittee for further action. At the July 9, 
2009, meeting, a vote was taken on two new options. However, both 
options received an equal number of votes; the Board was unable to 
reach consensus on either proposal. On July 15, 2009, the Board sent a 
letter to the Secretary noting this fact and asked FMCSA to proceed 
with the rulemaking process using the April 3 recommendation. The 
letter from the Board dated July 15, 2009, is available in the docket.

A. FMCSA Analysis of Board Recommendation

    The Agency conducted its own analysis of the Board's formal 
recommendation, as well as alternative fee proposals considered by the 
Revenue and Fee Subcommittee of the Board. FMCSA concluded that it 
could not base its fee determination on the Board's recommendation, and 
made an independent analysis of two issues in particular: (1) ``bracket 
shifting,'' i.e., motor carriers registering in a fee

[[Page 21997]]

bracket that is different from that based on the fleet size reflected 
in MCMIS, and (2) the number of motor carrier entities that could be 
expected to comply with the statute and register, and the related issue 
of the States' level of enforcement. FMCSA carefully examined the 
Board's entire fee recommendation, including its methodology and 
specific findings. FMCSA also considered the factors specified in 
SAFETEA-LU and utilized data and analysis provided by the Board in its 
fee recommendation, as well as data from other sources. Based on its 
independent analysis, FMCSA published an NPRM on September 3, 2009 (74 
FR 45583), containing its own fee proposal.
    FMCSA's NPRM described several alternative fee structures for 2010. 
First, it noted a proposal informally supported by industry 
representatives on the Board as the basis for fees in 2010 (described 
in Table 4 in the NPRM (74 FR 45587)). This fee structure, like the 
other fee structure evaluated by FMCSA, reflected the revised 
definition of CMV consisting only of power units. However, it did not 
incorporate any adjustments for bracket shifting and assumed full 
compliance by active motor carriers based on an assumption that all 
433,535 apparently active entities, as identified in MCMIS and 
considered by the Board to be active, would register to pay fees in 
2010.
    FMCSA noted that experience over the 3 years of UCR's existence, 
2007-2009, had shown that a significant proportion of motor carriers 
were paying fees based on fleet sizes different from (and usually 
smaller than) what would have been expected from the fleet sizes 
reported to FMCSA. The net effect of this bracket shifting has been a 
significant reduction in expected revenue (25.04 percent in 2008). 
FMCSA concluded that bracket shifting, which can be appropriate under 
the statute as explained in the NPRM, occurs because the available data 
sources used to develop UCR fees and fee structure do not always 
accurately predict actual registrations (74 FR 45589).
    FMCSA also noted in the NPRM that States participating in the UCR 
program sometimes have difficulty registering all of the motor carriers 
that appear in the MCMIS database, even after certain filters have been 
applied to identify motor carriers that have had recent activity and 
are still most likely to be active. As FMCSA noted, the reasons for and 
solutions to the level-of-compliance issues are matters of significant 
disagreement between the States and industry representatives on the 
Board. The States have taken the position that low compliance is due to 
limitations in the MCMIS data that prevent identification of the 
appropriate active population, even with the use of data filters, 
combined with the reluctance of some industry members to register. 
Industry representatives have taken the position that insufficient 
State enforcement activities are to blame (74 FR 45591). FMCSA asked in 
particular for public comment on the reasons for the low level of 
compliance and on potential solutions to determining the reasonableness 
of the compliance and enforcement activities by the States, including 
how they would support a reasonable adjustment in the current fees (74 
FR 45591).

B. Compliance and Enforcement

    FMCSA concluded that a compliance rate of 100 percent is not 
feasible. However, the Agency did agree with the concept of setting 
fees based on an assumption of significantly improved compliance and 
enforcement activities by the States. Thus, the fees proposed in the 
NPRM were set assuming that participating States would achieve a 
compliance rate of 90 percent. Because ten non-participating States do 
not receive revenues from the UCR Plan, FMCSA assumed that they would 
have less incentive to exert effort on enforcement. However, in FMCSA's 
opinion, improved roadside enforcement by participating States, to 
capture potential registrants from non-participating States when they 
cross borders into participating States, would improve compliance rates 
among carriers from non-participating States to approximately 59 
percent. The Agency therefore based its fee proposal on a weighted 
average projected compliance rate of 86.42 percent.\5\
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    \5\ This weighted average projected compliance rate has been 
slightly adjusted for this final rule.
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C. Bracket Shift

    FMCSA estimated the effects of bracket shifting and, in doing so, 
recognized that carriers with different fleet sizes pay different fees 
and that compliance rates vary by carrier size. The Agency's proposal 
takes into account the effect of increased registration rates, due to 
anticipated improvements in compliance and enforcement, on revenue 
collection. This adjustment assumed that the carriers that remain non-
compliant despite increased enforcement efforts would have somewhat 
smaller fleet sizes and the new registrants registering as a result of 
increased enforcement efforts would have larger fleet sizes.
    Finally, FMCSA noted that, without any other changes, each fee 
would need to be adjusted to take into account the elimination of 
trailers from the definition of CMV, which reduces many carriers' 
fleets. As the Agency noted, ``even with full compliance and no bracket 
shift, existing fees would be inadequate and would have to be increased 
to meet each State's revenue requirement'' (74 FR 45592). Therefore, 
after factoring in compliance improvements and bracket shifting, FMCSA 
concluded that the 2009 fees must be increased by a factor of 2.22 to 
establish the fees for 2010 proposed in the NPRM. FMCSA concluded that 
those fees would provide the revenues to which the participating States 
are entitled. The Agency found that the proposed fees were based on a 
reasonable estimate of the number of active motor carriers subject to 
the UCR fees; reflected the statutory change in the definition of CMV; 
addressed bracket shifting; and set reasonable targets for compliance 
by the motor carrier industry to encourage enhanced enforcement efforts 
by the participating States (74 FR 45595). The proposed 2010 fees as 
shown in the NPRM are presented in Table 3.

[[Page 21998]]

   Table 3--Fees Under The Unified Carrier Registration Plan and Agreement Proposed for Registration Year 2010
----------------------------------------------------------------------------------------------------------------
                                                                               Fee per entity
                                                  Number of CMVs owned or       for exempt or
                                                operated by exempt or non-    non-exempt motor   Fee per entity
                   Bracket                      exempt motor carrier, motor    carrier, motor     for broker or
                                               private  carrier, or freight   private carrier,   leasing company
                                                         forwarder               or freight
                                                                                  forwarder
----------------------------------------------------------------------------------------------------------------
B1..........................................  0-2...........................               $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  ................
----------------------------------------------------------------------------------------------------------------

V. Discussion of Comments on the NPRM

    The statute established a 90-day time period for FMCSA to set UCR 
fees and fee structure following receipt of a recommendation from the 
Board. Because of this statutory limit, FMCSA initially set the time 
period for public comment at 15 days, concluding on September 18, 2009. 
On September 18, the Agency published a notice extending the comment 
period for an additional 10 days, to September 28, 2009 (74 FR 47912).

A. Number and Description of Commenters

    FMCSA received over 150 comments on the proposed rule from a wide 
variety of sources. Comments (including some filed late) were received 
from 114 industry members, nearly all of whom registered opposition to 
the proposed fees. In addition, 22 industry associations submitted 
comments. In general, they also opposed the fees proposed by FMCSA. 
Sixteen State agencies and two State associations commented, nearly all 
in support of the fee proposal.

B. Comments Favoring the Proposal

Comments
    Fifteen State agencies, including the Alabama Public Service 
Commission, Colorado Public Utilities Commission, Illinois Commerce 
Commission, Kansas Corporation Commission, Kentucky Transportation 
Cabinet, Massachusetts Department of Public Utilities, Michigan Public 
Service Commission, Missouri Department of Transportation, New Mexico 
Public Regulation Commission, New York State Department of 
Transportation, North Dakota Department of Transportation, Oklahoma 
Corporation Commission, Pennsylvania Public Utility Commission, 
Washington Utilities and Transportation Commission, and the West 
Virginia Public Service Corporation, expressed strong support for the 
fee proposal in the NPRM. Many of the public agencies submitted 
essentially identical comments, stating that FMCSA had taken into 
account the three key points that needed to be addressed for a new fee 
structure: (1) The removal of towed units for purposes of determining 
fleet size, which by itself would require a fee increase by a factor of 
1.61; (2) bracket shift, resulting in an approximately 26 percent 
decrease in revenues; and (3) the level of State enforcement efforts to 
address non-compliance. These commenters argued that ``the net effect 
of `bracket shift' and the exclusion of trailers have had a much 
greater impact on the need for a fee increase than has non-
compliance.'' In addition, the Alabama Public Service Commission 
(Alabama PSC) commented that UCR collections and revenue had increased 
each year and, considering that the UCR program was only celebrating 
its second anniversary in September 2009, its progress to date had been 
``commendable.''
    Two associations, the National Conference of State Transportation 
Specialists (NCSTS) and the Commercial Vehicle Safety Alliance (CVSA), 
also supported the proposed fee structure. CVSA stated that the 
proposal represents the best method for reaching the goal of revenues 
equal to those received under the SSRS. CVSA noted that, despite the 
fee increase, the carriers in the top bracket would still pay far less 
than they would have paid under SSRS. CVSA also commented that the UCR 
program does not allow for a ``revenue windfall,'' meaning that if 
revenues exceed the target, FMCSA would be obligated to adjust the fees 
downward for the following year. CVSA stressed that the new fee 
structure needed to be issued effective no later than November 15, 
2009, to preclude additional shortfalls. Finally, CVSA commented that 
the fee structure for Registration Years 2008 and 2009 worked to the 
industry's benefit because the Board did not recommend a fee increase 
despite revenue shortfalls.
    One motor carrier approved of the fee proposal because it would 
benefit owner-operators and small trucking companies, largely due to 
the statutory change in the CMV definition removing trailers for UCR 
registration and by applying a fee from a lower bracket, even with the 
increased fee from that bracket. Although they did not support the fee 
proposal, the American Trucking Associations (ATA) and the 
Transportation Intermediaries Association (TIA) both supported the 
State revenue entitlement submitted for FMCSA approval with the Board's 
recommendation. ATA also described FMCSA's use of MCMIS data to 
determine the overall motor carrier population as ``unobjectionable'' 
and added, ``The underlying data may not be all it should be, but 
anyone working in this area must begin with it.''
Response
    FMCSA continues to agree that the statutory change in the 
definition of motor vehicle (a part of the population factor), bracket 
shifting, and the registration compliance rate (the enforcement factor) 
are essential factors to consider in the fee calculation methodology. 
FMCSA also agrees with ATA's comment that MCMIS data is the starting 
point for determining the appropriate carrier population. However, the 
Agency also understands the limitations to using MCMIS, which is a 
self-reporting system that was not designed for UCR purposes. (See 
Section V (C)(4) below for additional discussion.)
    Finally, FMCSA also recognizes that those carriers that were 
subject to the SSRS program will generally pay less under the 2010 fee 
structure than they did under SSRS. More importantly, the UCR Plan 
cannot over-collect the fees. To the extent that it collects more than 
its target revenue amount, the fees

[[Page 21999]]

would be required to be reduced for 2011 to reflect the over-
collection.

Consideration of Three Key Factors

Removal of Trailers From Fee Calculation
Comments
    Many of the State agencies that supported the proposed fees filed 
an identically worded comment stating that because towed units are no 
longer part of the equation for purposes of determining fleet size, 
this factor alone would result in a need for the fees to increase by a 
factor of 1.61. The Missouri Department of Transportation (Missouri 
DOT) said that fee adjustment was necessary to account for the change 
in definition of CMV, noting that Missouri could expect a 38.7 percent 
decline in revenue collection from companies dropping into lower 
brackets as a result of the changed definition.
    Many industry members acknowledged that it would be necessary to 
adjust the fee in response to the statutory change to the definition of 
CMV, but opposed any further adjustment. State commenters were 
generally opposed to this limited approach, arguing that it would cause 
a decrease in revenue.
Response
    See Section V(C)(7) below for additional discussion.
Bracket Shift
Comments
    State agencies and associations argued that it was necessary to 
account for bracket shift in developing the UCR fees because the 
statute allowed motor carriers to exclude from their count of vehicles 
subject to UCR fees those commercial vehicles not involved in 
interstate or international commerce and because UCR does not apply to 
certain vehicles below certain weight ratings. Thus, the net effect of 
motor carriers shifting upward or downward in brackets was roughly 26 
percent less revenue than if the fleet size registered in MCMIS had 
been used to determine UCR fees. The Pennsylvania PUC said that self-
certification by carriers will ``inevitably result in bracket shift,'' 
and that FMCSA had properly included this factor in its fees 
calculation.
Response
    FMCSA agrees that the net effect of bracket shifting has had a much 
greater effect on revenues than had been originally anticipated. By 
statute, motor carriers are allowed to exclude portions of their fleets 
from UCR registration. The inherent discrepancy between the number of 
vehicles in MCMIS and the number of CMVs that carriers may lawfully 
include in their fleet sizes for UCR purposes inevitably results in 
bracket shift independent of the fee calculation methodology used.
    See Section V(C)(4) below for additional discussion.
Improved State Enforcement Efforts
Comments
    Some State agencies commented that they have had to identify the 
universe of entities subject to the program and then to educate 
thousands of motor carriers, motor private carriers, leasing companies, 
freight forwarders, and brokers that were not subject to the SSRS but 
are now subject to UCR fees. The commenters agreed that States will 
need to do more to improve overall compliance. They noted that, under 
the NPRM, approximately 66,000 additional entities will have to be 
registered into the UCR for 2010 to achieve the revenue goal, and that 
this will require States to improve compliance nationally by about 15 
percentage points to reach the compliance goal of 86.42 percent. 
Several of the States, such as Illinois, Massachusetts, and Michigan 
also described increased enforcement and educational activities they 
have undertaken and the results they produced.
Response
    FMCSA is encouraged to learn of the States' improved enforcement 
efforts. However, the Agency encourages more States to register 
entities for UCR at the same time as they renew registrations 
(including those for the International Registration Plan (IRP)), obtain 
International Fuel Tax Agreement (IFTA) credentials, and make excise 
tax filings. FMCSA urges States to work closely with FMCSA Division 
Offices to leverage pre-existing targeted enforcement efforts, as well 
as to improve data integrity issues, to make mass mailings and 
notifications more effective. Finally, FMCSA believes that the success 
of the UCR fee program depends on the Board working with States to 
develop outreach strategies and best practices for educating and 
registering carriers. (See the additional discussion in section 
V(C)(2)).
C. Comments Opposing the Proposal
Comments
    Motor carriers and associations representing carriers submitted 
several comments that expressed general opposition to the fee proposal, 
based on a wide variety of arguments. The American Moving & Storage 
Association (AMSA) strongly opposed the fee proposal as ``excessive, 
inappropriate [and] unwarranted.'' United Parcel Service (UPS) said the 
proposed fees represented an ``unreasonable rate of increase.'' The 
Truckload Carriers Association (TCA) opposed the proposal because it 
would ``negatively affect the motor carrier industry in order to 
subsidize both non-compliant motor carriers and the states that will 
not put forth the effort to increase UCRA [UCR Agreement] compliance.'' 
TIA called FMCSA's analysis flawed. ATA and TIA both faulted the NPRM 
for giving an impression of ``illusory precision.'' They argued that 
``the unwarranted show of accuracy covers much guesswork and some 
arbitrary assumptions.''
Response
    As discussed in Section III above, the Agency has to recognize and 
implement its primary statutory mandate to enable States to achieve 
their revenue entitlement. Unfortunately, many of the comments 
expressing general opposition to the fee adjustment did not address the 
important issues. General statements of opposition do not present 
compelling arguments about the Agency's statutory mandate. Similarly, 
specific objections do not address the relevant statutory factors the 
Agency must consider. A more detailed discussion of those contentions 
and FMCSA's responses, follows below.
1. Increase Too Large Under Current Economic Conditions
Comments
    One of the most common arguments against the proposed fees, made by 
over one hundred commenters, including many carriers, was that fees 
should not be increased because the trucking industry is suffering from 
the current economic downturn. Industry members commented that fee 
increases might force them to lay off drivers, sell trucks, or even go 
out of business. A number of associations and individual carriers 
complained that FMCSA failed to consider the condition of the economy 
and the ``devastating effect'' the fees increase would have on the 
trucking industry, trucking employment and services and even the 
survival of some trucking companies. AMSA commented that FMCSA had not 
appropriately considered the fact that household goods movers have 
faced a decline in both demand and revenue, forcing many such carriers 
to go out of business. Commenters also complained that shipping rates 
have declined significantly, putting additional economic pressure on 
the industry.

[[Page 22000]]

ATA and TIA commented that the recession has hit the trucking industry 
far worse than many other industries. ATA stated that for-hire 
truckload revenue has plummeted and that for-hire trucking employment 
is at its lowest level in 14 years. The California Trucking Association 
(CTA) also opposed the fee proposal, citing declining freight volumes, 
a number of recently adopted regulations affecting carriers in the 
State, higher diesel prices, and pressures to increase fuel taxes.
Response
    FMCSA does not agree with the numerous commenters who asserted that 
the proposed rule represents too large an increase to be considered 
reasonable under current economic conditions. As discussed in Section 
III above, the statute does not permit FMCSA to consider as relevant in 
determining whether an adjustment in the UCR fees is ``within a 
reasonable range,'' any factor that frustrates the primary purpose of 
providing sufficient revenues for the participating States. Current 
economic conditions are one such factor.
    Nonetheless, FMCSA does not believe that the 2010 fees will have a 
significant economic impact on affected carriers.\6\ In 2007, for 
example, the trucking industry generated revenue of $228,907 million. 
With an estimated inventory of 1,183,000 vehicles generating revenue, 
that total represents average revenue of $193,000 each.\7\ Under the 
fees for Registration Years 2007-2009, in which the maximum fee per 
motor vehicle was $39, the fee accounted for no more than 0.02 percent 
(that is, 1/50th of 1%) of revenue. The 2010 fees (a maximum of $76 per 
power unit) represent less than about 0.04 percent (1/25th of 1%) of 
revenue per power unit. The increase in fees is thus only 0.02 percent 
of revenues--about a fifth of a tenth of 1 percent. This increase is 
very small even relative to the revenues of extremely small carriers.
---------------------------------------------------------------------------

    \6\ In the Regulatory Analysis and Notices section below, FMCSA 
complies with applicable regulatory policies to determine that this 
final rule is not economically significant. That determination rests 
on a different standard than the statutory factors discussed in this 
section.
    \7\ http://www.census.gov/svsd/www/services/sas/sas_data/48/
2007_NAICS48.xls.
---------------------------------------------------------------------------

    Data on receipts for individual proprietorships in the North 
American Industry Classification System (NAICS 484--Truck 
Transportation)--which are assumed to represent the smallest carriers--
show yearly revenue averaging $82,269.\8\ The increase of $37 in the 
fee for one motor vehicle from $39 under the 2007-2009 fees to $76 for 
2010 is an increase of only 0.045 percent, or little less than half of 
a tenth of one percent of the average individual proprietorship 
carriers' revenue. Moreover, the $37 difference between the 2009 and 
2010 fees comes to less than 15 cents per day for a truck used 5 days a 
week for 50 weeks per year. Even if current revenue levels have been 
reduced by current economic conditions, the fee increase is very small 
in relation to such revenues.
---------------------------------------------------------------------------

    \8\ http://www.census.gov/econ/nonemployer/index.html.
---------------------------------------------------------------------------

    A critical point that many commenters ignore is that a significant 
portion of the $37 fee increase in the first bracket is due solely to 
the change in the definition of a CMV. That change alone requires an 
increase of about 62 percent, or $24. The remainder, which is only $13, 
is less than a hundredth of 1 percent of industry average revenue per 
power unit, two-hundredth of 1 percent of the average revenues of an 
individual proprietorship, or 5 cents per power unit per day. For the 
largest carriers this increase has an even lower per-unit effect.
2. State Compliance and Enforcement
a. Responses to NPRM Questions on Compliance
    Question One: FMCSA requested public comment on the reasons for the 
low level of compliance.
Comments
    The Alaska Trucking Association noted that, according to FMCSA, 
only 28 out of 41 participating States actively engage in roadside 
enforcement. The commenter expressed doubt that there is any 
enforcement in the 10 non-participating States. Since there is no 
incentive for non-participating States to conduct UCR enforcement, the 
commenter concluded there is unlikely to be any enforcement in the 
future in those States. Therefore, the reason for the current low level 
of compliance is that ``if there is no reasonable expectation of 
getting caught, there is no incentive to comply.''
    The Alabama PSC supported the 90 percent registration compliance 
factor and noted that ATA had erroneously stated it in its comments as 
80 percent. It said that it had made progress working with FMCSA to 
improve the data on potential registrants, but work still remained to 
be done. It is unreasonable, Alabama PSC argued, to expect the States 
to achieve 100 percent compliance when the Federal data upon which they 
rely are not 100 percent reliable. Alabama PSC would support a higher 
registration compliance factor for non-participating States than the 59 
percent proposed by FMCSA, noting that four of the nine non-
participating jurisdictions in the continental U.S. had already 
achieved this level of registration for 2009 (VT, NJ, OR, and AZ). 
Alabama PSC suggested a factor of 65 to 75 percent.
    The Pennsylvania PUC stated that it believes the current compliance 
rate is a reflection of various factors, including a potentially 
inaccurate carrier population number, the ability of property carriers 
to omit vehicles used solely in intrastate commerce, as well as 
available enforcement and compliance tools. Pennsylvania agreed with 
FMCSA that the compliance rate is higher for larger carriers.
    California Department of Motor Vehicles (California DMV) noted that 
UCR does not require State participation. Participating States retain 
only that amount of the collected UCR fees that equals what they 
previously collected under SSRS. Thus, California collected its 
entitlements in both 2008 and 2009 and sent $300,000 each year to the 
UCR repository for distribution to other States. Because, according to 
California DMV, UCR prohibits the States from collecting any intrastate 
fees from a carrier that pays UCR fees, California would lose over $7 
million in intrastate revenues if California pursued all UCR-defined 
interstate carriers. This dynamic occurs for any State that exceeds its 
UCR revenue cap or collects intrastate fees. Another reason for non-
compliance, California DMV explained, is that ``carriers do not know 
they are non-compliant because they think they are intrastate. A 
massive compliance effort would be required to pursue and convince 
these carriers to pay with little incentive for the States to do so 
because of their capped revenue amounts and their loss of intrastate 
fees when the carriers do pay UCR.''
    California DMV also noted that before UCR was enacted carriers 
could enter information into MCMIS without fear of consequences, since 
no credentials or payments were linked to MCMIS filing with respect to 
numbers of vehicles and whether or not a carrier was interstate. 
Finally, California DMV pointed to the weak compliance efforts of non-
participating States, which may enforce on carriers crossing into their 
States, but do little to enforce on any of their own intrastate 
carriers who meet the UCR definition of interstate.
    The Missouri DOT also said it had identified a number of companies 
within the non-compliant group that were operating only within the 
State borders in intrastate commerce, out of business, not currently 
operating, non-compliant in one or more State motor

[[Page 22001]]

programs (IFTA, IRP, Over Size/Over Weight (OSOW), Operating 
Authority), or placed out-of-service. However, getting these changes 
into the MCMIS system is difficult and sometimes impossible. If 
Missouri could exclude these companies the State's compliance rate 
would be 87.5 percent.
    CVSA cited two reasons for the expected revenue shortfall, the 
prospective change in definition of CMV and bracket shift, and argued 
that lack of enforcement by the States was not a major cause of the 
shortfall. CVSA contended that the States have stepped up efforts to 
enforce the program; and, as of September 2009, the compliance rate had 
reached 72 percent. CVSA noted that early in the program's life an 
outreach effort was necessary to inform carriers that were not required 
to pay under SSRS that they were covered by UCR. In addition, CVSA said 
it was important to note that UCR does not have an enforcement mandate 
and as a result no nationwide enforcement standard has been promulgated 
in rulemaking. In addition, there is no statutory requirement for a UCR 
credential to be carried on board trucks. CVSA also noted that 
inaccurate information in the carrier population database had impeded 
collection efforts. Lists of carriers obtained from MCMIS were not 
current and in some cases led to a 25 percent or greater return rate 
for registration fee notices. States have had to purge the lists of 
carriers that no longer exist.
    Several other comments addressed compliance and how to improve it. 
One pointed out that Connecticut and New Hampshire are requiring proof 
of UCR compliance to renew a registration or obtain IFTA credentials.
Response
    FMCSA specifically takes issue with California DMV's assertion that 
it has a net loss of $5 million because UCR prohibits the States from 
collecting any intrastate fees from a carrier that pays UCR fees. In 
FMCSA's view, this loss of revenue occurs because of the stand-alone 
preemption provisions of 49 U.S.C. 14504a(c) that are not linked to 
registration and payment of fees to the UCR Plan and Agreement. In 
other words, section 14504a(c)(1) precludes any State requirement for 
payment by interstate motor carriers and interstate motor private 
carriers (as defined there) of any of the fees there specified. It 
seems that California would lose these revenues regardless of the 
payment by those carriers of UCR fees; otherwise, California could 
rectify this situation by withdrawing from the UCR Plan under 49 U.S.C. 
14504a(e)(3) and (4), which it obviously has not done. Other issues 
raised by the commenters are addressed in sections V(C)(4), V(C)(5), 
V(C)(6) and V(C)(7).
    Question Two: FMCSA requested public comment on determining the 
reasonableness of the States' enforcement efforts.
Comments
    The Alaska Trucking Association stated that ``at the least'' a 
participating State should demonstrate an ongoing effort to register 
and collect fees, both administratively and through enforcement. The 
commenter also said that non-participating States need to have some 
incentive to perform enforcement.
    Several States described their current efforts to improve 
enforcement. They included assisting each other to reach the collective 
registration compliance goals by developing a communication system to 
alert each State of new concerns and sharing ``best practices.'' The 
Illinois Commerce Commission noted that the State had fulfilled its 
commitments in the UCR State Participation Agreement, registering 
17,523 carriers and achieving a 90 percent registration percentage of 
all ``UCR universe'' carriers in Federal database records, and issuing 
over 1,000 citations in the past 12 months. Massachusetts reported that 
for the past 3 years it had conducted focused enforcement events with 
the Massachusetts State Police, and had worked with FMCSA on data 
integrity issues. The Pennsylvania PUC argued that any attempt to 
increase the compliance rate should recognize the economic realities of 
enforcement among the small fleet carrier population.
    California DMV recommended three actions that would require a 
legislative change to the UCR Agreement. It also suggested a fourth, 
altering the definition of ``interstate carrier'' to match the IRP 
definition (which it believed would not require a statutory change) and 
using the IRP database to calculate the UCR fee structure.
    Missouri argued that using a compliance rate based on the number of 
companies registered is not the correct compliance tool to use. 
Missouri's current 79.6 percent compliance rate accomplishes a 
collection rate of 90.7 percent of the fees that the State believes 
should be collected under the program in the State. In addition, 54 
percent of Missouri's non-filers are in bracket 1 or bracket 2. Without 
a change in the compliance measure, the State could be required to 
spend more in resources to collect a small amount of revenue.
    Kentucky noted that the State had 82 percent compliance for 2008 
and 87.98 percent compliance for 2009. However, over the past 3 years, 
Kentucky had a shortfall of approximately $11 million due to the new 
UCR program and the need to educate motor carriers about the new 
registration program.
Response
    FMCSA notes that State agencies generally support the proposed 
compliance rates. However, some expressed concern that the lower rate 
of 59 percent compliance for non-participating States would not be 
adequate and would favor an increase.
    FMCSA agrees with State comments that the difficulty in obtaining 
UCR compliance is a reflection of various factors, such as the ability 
of carriers to omit CMVs for various reasons, lack of a requirement for 
States to participate in UCR, the difficulty of obtaining compliance 
from non-participating States, and the lack of a requirement for the 
UCR entity to carry a credential. Absent statutory changes that would 
address these issues, FMCSA believes that compliance by carriers from 
non-participating States will continue to be problematic and, 
therefore, the Agency is not increasing its estimate of the non-
participating State compliance rate.
b. Comments on Inadequate State Compliance and Enforcement Efforts
Comments
    A number of commenters opposed increasing UCR registration fees, 
alleging that the States have not undertaken adequate enforcement 
measures to ensure compliance. A number of commenters stated that fees 
should be raised only after the States have achieved adequate 
compliance. ATA and TIA commented that neither FMCSA nor NCSTS has 
recognized how significantly non-compliance has contributed to revenue 
shortfalls, alleging that 19 participating States have not registered 
at least three-quarters of the carriers based within their borders. ATA 
and TIA further commented that non-compliance or evasion is likely a 
major cause of bracket shift, but because States have not performed any 
audits, it is unclear. Another commenter said that FMCSA had erred in 
treating bracket shift and non-compliance as separate subjects. The 
commenter argued that enforcement of accurate carrier registration 
would have a significant impact on the amount of fees collected.
    ATA and TIA said that FMCSA had set an arbitrary and capricious 
standard

[[Page 22002]]

for State enforcement efforts in developing the proposed fees. ATA and 
TIA said that FMCSA made ``a great show'' of including a compliance 
factor, but this must be discounted heavily because the fees proposed 
by the NPRM are almost exactly the same as those recommended to the 
Secretary in February, 2009. The TCA argued that, although 100 percent 
compliance was unlikely, it should be the goal of the program and that 
there should be no increase until the States make a good faith effort 
to register non-compliant entities.
    One commenter urged greater emphasis on ticketing or fining non-
compliant carriers when discovered in roadside or scale inspections. 
Another said that UCR registration should be made part of the annual 
vehicle registration, like the Heavy Vehicle Use Tax, and should 
require proof of compliance before the vehicle can be registered.
    The National Private Truck Council (NPTC) and the Truck Renting and 
Leasing Association (TRALA) faulted the Board and FMCSA for not 
developing audit procedures. The Louisiana Motor Transport Association 
(LMTA) complained that States were not required to demonstrate that 
they could effectively and efficiently administer the program as a 
condition of participation. LMTA suggested that States must first make 
all efforts to collect outstanding revenue prior to requesting an 
increase in fees. The Specialized Carriers & Rigging Association 
(SC&RA) also commented that the States have not done a good job of 
enforcement, with 19 of the UCR States and all 12 of the non-
participating States failing to require registration and payment of the 
fees.
Response
    FMCSA agrees that State enforcement activities, and the levels of 
compliance with UCR registration requirements by the motor carrier 
industry, directly affect the States' revenue, and are therefore 
relevant factors for consideration. The Agency's proposal, as set out 
in the NPRM, clearly expects an increase in the level of enforcement in 
order to produce an increase in compliance (74 FR at 45592-93). The 
Agency recognizes that participating States have made improvements in 
collection rates as enforcement activity has increased. Based on the 
State reports at the Board meetings and data available in MCMIS, FMCSA 
believes that the States have been making a ``good faith effort'' to 
address compliance and enforcement issues. The most recent data from 
MCMIS show that for the first 10 months of 2009, 42 States have issued 
21,223 citations to motor carrier entities for not registering with the 
UCR Plan. This is a significant improvement over the 7,995 citations 
issued by 33 States during the entire previous year of 2008. This is 
clear evidence of an increased level of enforcement activity by the 
States, and compliance by motor carrier entities has improved 
accordingly.
    However, the data also show some disparity in the level of activity 
by the various States, including a few participating States that are 
apparently not issuing roadside citations to unregistered motor 
carriers and other entities. For that reason, the Agency's fee proposal 
reflects an expectation that the participating States as a whole will 
need to register 90 percent (not 80 percent, as incorrectly stated by 
ATA) of the entities required to register in those States in order for 
the revenue entitlements to be achieved. To meet that level, FMCSA 
believes that all of the participating States must, and will, increase 
enforcement activities. This includes roadside enforcement and audits, 
as well as outreach activity with the essential support of the 
industry, to make sure that all motor carrier entities subject to the 
UCR registration requirements are aware of and comply with them.
    The situation in the non-participating States, however, is more 
complex. As indicated in the NPRM, those 10 States cannot receive 
revenues from the UCR Plan and thus have no apparent financial 
incentive to conduct enforcement within their jurisdictions.\9\ Several 
commenters urged the UCR Plan and FMCSA to take steps to improve 
compliance by motor carrier entities in the non-participating States.
---------------------------------------------------------------------------

    \9\ Data available to FMCSA from MCMIS, if correct, shows that a 
few non-participating States are issuing a very small number of 
citations and, presumably, collecting fines for not registering with 
the UCR Plan, even though it is not entirely clear that non-
participating States have authority to issue them. Cf. 49 U.S.C. 
14504a(i)(4).
---------------------------------------------------------------------------

    FMCSA has no direct authority to enforce UCR compliance, and 
participating States are limited in their ability to enforce against 
carriers based in non-participating jurisdictions.\10\ That said, 
increasing roadside enforcement efforts (as described above) should 
improve compliance by motor carriers and other entities from non-
participating States. Regardless, this only captures those carriers 
that operate CMVs into participating States. Participating States are 
very limited in their ability to capture interstate carriers based in 
non-participating States that do not carry property or passengers into 
a participating State. As CVSA noted in its comments, industry 
cooperation, such as publication of information in the trade press 
about UCR, is vital to the success of the UCR program, and could assist 
in increasing compliance by entities in the non-participating States. 
The 2010 fee structure adopted here requires participating States to 
increase compliance rates for motor carrier entities based in non-
participating States in order to achieve the revenue entitlements. 
Nonetheless, two factors must be addressed (the change in definition of 
vehicle and bracket shift) that are and will be the primary reasons for 
UCR Agreement revenue shortfalls, and not lack of compliance.
---------------------------------------------------------------------------

    \10\ Hawaii is one of the ten non-participating States. However, 
section 701(d)(1)(C) of the Rail Safety Improvement Act of 2008, 
Public Law 110-432, Div. A, 122 Stat. 4848, 4906 (Oct. 16, 2008) 
amended the statute so that Hawaiian motor carriers not transporting 
household goods (which number only a few hundred) are not required 
to register with the UCR Plan. 49 U.S.C. 13504 and 
14504a(a)(5)(A)(ii). This will further reduce the number of entities 
from non-participating States that will register.
---------------------------------------------------------------------------

3. Increased Fees Should Not Fall on Compliant Entities/Fees Unfair
Comments
    Many commenters, including numerous individuals and carriers, 
stated that raising the fees as proposed is unfair because it increases 
the burden on compliant carriers to the non-compliant carriers' 
benefit. The Minnesota Trucking Association commented that increasing 
fees only for the compliant carriers raised basic questions of fairness 
and not only rewards bad behavior, but also creates a competitive 
advantage for the offenders in terms of liquidity and cash flow. Some 
commenters stated that companies that are not complying with the UCR 
are using the money saved to help maintain positive cash flow, while 
those in compliance are suffering. The California DMV commented that 
the fees must apply to all with a reasonable expectation of compliance. 
ATA and TIA said that the failure of the States to enforce UCR 
Agreement requirements is the major reason for its opposition to the 
proposed fee increases. The absence of serious State enforcement 
efforts, in particular the lack of State audits of UCR Agreement 
compliance, calls into serious question FMCSA's asserted basis for the 
increases. The Alaska Trucking Association commented that, by accepting 
the premise that it was ``unreasonable to expect the States to register 
and collect fees from all potential registrants,'' both the Board and 
FMCSA have endorsed a fundamentally unfair fee structure that

[[Page 22003]]

will cause more and more potential registrants to become non-compliant. 
The Alaska Trucking Association recommended no fee increase until the 
States make a solid commitment to enforce registration and the payment 
of fees. Similar arguments were made by the Snack Foods Association and 
AMSA, which expressed concern that the unprecedented large increase in 
fees will result in increased non-compliance.
    Some commenters, in addition to those who stressed the unfairness 
of assessing fees against the compliant carriers to the benefit of the 
noncompliant carriers, raised other fairness issues. One truck operator 
argued he should not be required to pay higher fees because trailers 
were no longer counted toward the fees assessed other companies. 
Another said that removing the fees for trailers is not a tradeoff and 
that smaller carriers will end up paying more than twice as much. The 
American Bus Association disagreed with FMCSA that the proposal in the 
NPRM is a compromise fair to all parties. The doubling of fees, by 
itself, makes the proposal unfair, but the disproportionate effect on 
the compliant carriers also makes it unjust.
    Two California truckers noted that none of California's neighboring 
States participate in the UCR program and that no agency in those 
States enforces enrollment by interstate truckers, placing California 
carriers at a competitive disadvantage. Additional fee increases will 
only increase this disadvantage, they said. One of these commenters 
also noted that because California already recoups its UCR Agreement 
entitlement, all additional fees received are distributed to States 
with shortfalls and do not benefit California carriers. The CTA echoed 
comments critical of California's participation in the program, arguing 
that States meeting revenue goals should not be punished. The CTA 
commented that California carriers would experience a net loss from the 
fees proposed due to potential job losses and a decrease in freight 
movement. Any increase of UCR fees ``to account for other states' 
safety program funding shortfall adds another layer to an already 
unlevel playing field.''
    The comments from the States indicated that compliance has been 
increasing as enforcement activity has increased. NCSTS, joined by 
several participating States, reported that registration for 2009 had 
increased to 307,767 carriers. Alabama PSC claimed that 2009 
registrations had increased to ``over 310,000.'' In addition, the 
Pennsylvania PUC and Missouri DOT both noted that FMCSA was correct 
that the compliance rate (calculated as the number of carriers 
registered under the UCR plan divided by the total number of carriers 
that should potentially register) is not synonymous with the actual 
revenue collection rate (calculated as the actual revenue collected 
divided by the targeted revenue amount). The FMCSA's Registration 
Percentage Reasonableness (RPR) factor is a reasonable compliance 
target, Pennsylvania stated; and FMCSA ``reasonably approximated the 
effect of the increased compliance goal on targeted revenue.''
Response
    FMCSA does not agree that the 2010 fee structure unfairly burdens 
compliant carriers. In developing the fees proposed in the NPRM, FMCSA 
determined that the levels of both State enforcement and carrier 
compliance are relevant factors to consider because they directly 
affect States' ability to achieve their revenue entitlement. Although 
the Board's recommended fees were based on the population of previously 
compliant carriers, FMCSA specifically rejected this approach. Under 
the 2010 fee structure FMCSA proposed, the Plan will not reach the 
overall revenue target unless the States improve compliance by 
increasing enforcement efforts and registering a significantly greater 
number of unregistered carriers.
    Furthermore, the data show that compliance has improved with each 
year that the UCR Agreement has been in effect, as shown in Table 2 in 
the NPRM (74 FR 45586). New data made available to the Agency since the 
NRPM was published show that registrations have increased to 276,286 
carriers for 2007, 299,908 carriers for 2008, and 314,456 carriers for 
2009, all improvements over the registration levels shown in Table 2 of 
the NPRM. Recent enforcement activity has apparently captured entities 
that should have registered in previous years as well as the current 
year. More recent data also show a clear improvement in compliance 
rates. Compliance rates for 2008 registrations in both participating 
and nonparticipating States, as of March and September 2009, are shown 
in the table below.

   Table 4--UCR Registration Compliance Rates--2008 Registration Year
------------------------------------------------------------------------
                                                                As of
                                                As of March   September
                                                    2009         2009
------------------------------------------------------------------------
Non-Participating States......................       40.45%       42.22%
Participating States..........................       66.28%       74.14%
All States....................................       62.51%       69.48%
------------------------------------------------------------------------

    Registration totals for both categories of all States and all 
participating States include registrations by Canadian and Mexican 
carriers.
    Although these data show a continued increase in compliance with 
UCR registration requirements by the motor carrier industry, further 
improvement is essential to address the fairness concerns of the 
commenters. As proposed in the NPRM, the 2010 fee structure depends on 
the States registering 374,200 motor carrier entities to achieve the 
required revenue levels under the statute (see Table 13, 74 FR 45593). 
As adjusted below, the States will need to register 370,664 entities or 
a weighted average of 85.50 percent in all States (including Canadian 
and Mexican carriers) in order to achieve the revenue levels expected. 
In FMCSA's view, a fee structure based on compliance rates of 90 
percent in the participating States and 59 percent in the non-
participating States is aggressive but fair and balanced.
    In any case, lack of enforcement is not the sole reason the 
participating States have failed to achieve their revenue entitlements. 
As explained in the NPRM, the Agency believes that the most significant 
cause of past revenue shortfalls is bracket shifting. This means that 
even if the States achieved 100 percent compliance at 2009 fee levels, 
they would nonetheless experience a revenue shortfall warranting a fee 
adjustment.
4. FMCSA's Analysis of Bracket Shifting Inadequate
Comments
    Many industry commenters disagreed with FMCSA's treatment of 
bracket shifting. Most of the comments echoed objections ATA 
articulated in its comments. ATA identified what it believed are the 
five causes of bracket shifting:
    1. The MCMIS data on a carrier may be erroneous, and the carrier 
legitimately pays fees at a level different than the recorded data 
would predict;
    2. The carrier chooses under the Act to base its fee calculation on 
the actual number of vehicles it operated during the preceding year 
instead of the

[[Page 22004]]

number it reported to FMCSA, and therefore falls into a different 
bracket;
    3. The carrier operates some of its vehicles solely in intrastate 
commerce, excludes these from its fleet count, as is permitted by the 
Act, and pays less than expected;
    4. The carrier is legitimately confused about the requirements of 
the Act, and excludes trailing equipment or equipment operated in 
interstate commerce but solely within a single state; and
    5. The carrier cheats, and knowingly pays less than it owes.
    According to ATA, the fourth and fifth causes of bracket shift 
listed above reflect noncompliance and are very likely major causes of 
the States' revenue shortfalls. However, ATA acknowledges that it is 
currently impossible to know what proportion of the reported 25 percent 
revenue loss constitutes non-compliance, because no States have yet 
performed any audits. ATA also criticized FMCSA's ``unquestioning 
acceptance'' of the analysis of bracket shift made available to the 
Board and said that the Agency should not accept this ``superficial'' 
analysis without some verification.
    ATA also pointed out that inclusion of trailers and other towed 
vehicles in the UCR program led to a great deal of confusion on the 
part of motor carriers when they had to calculate the size of their 
fleets, and led many to underpay by mistake what they owed. ATA stated 
that this aspect of the administration of the program should not be 
ignored.
    Several commenters agreed with FMCSA that bracket shifting is a 
significant contributor to revenue shortfalls, but disagreed that it 
was appropriate to adjust the fees to compensate for it. The Snack Food 
Association commented that MCMIS data do not always predict actual 
registrations and that a large number of carriers are intentionally 
under-reporting their fleet sizes.
    UPS expressed concern at ``the almost total absence of any type of 
review of the appropriateness of'' bracket shifting. UPS also commented 
that bracket shifting may be due to the fact that many industry members 
do not understand that the definition of interstate transportation for 
UCR registration purposes is ``significantly different than the 
interpretation in most states which hold that the vehicle not the cargo 
or passengers must cross state lines.'' As a result, UPS strongly 
disagrees with FMCSA's (and most States') acceptance of self-reported 
figures.
    Alabama PSC challenged ATA's suggestion that bracket shift could be 
the result of mistake or fraud, stating that Alabama's initial efforts 
at auditing carriers had uncovered ``no evidence of fraud or mistake.'' 
Alabama PSC also challenged ATA's claim that the States had not yet 
performed any audits of bracket shifting, noting that ATA and other 
industry representatives voted against a recent Board resolution 
requiring carriers that remove vehicles from their fleet count to 
maintain a vehicle-specific list so that States may conduct accurate 
audits of bracket shifting. Alabama PSC concluded that the vast 
majority of bracket shifting appears to be legitimate and that it would 
be unreasonable not to include it as a factor in the 2010 fees, with a 
reasonable adjustment to the factor to account for mistake or fraud.
    Some commenters criticized the use of FMCSA's MCMIS data base as 
the source of the carrier population, stating that faulty data are one 
potential cause of bracket shifting. The TRLA and the NPTC both said 
that MCMIS is ``fundamentally flawed'' because there is no mechanism 
for purging the system of entities that have gone out of business, 
merged, consolidated, filed bankruptcy, or simply disappeared from 
regulatory oversight. They, along with other commenters, also faulted 
FMCSA for having no systematic mechanism for verifying and correcting 
the data submitted by the registrants, although they acknowledged the 
efforts of some States to clean up MCMIS data. RTLA and NPTC said that 
data quality issues have made it ``problematic at best'' to determine 
an appropriate fee schedule that would generate the amount of revenue 
allowed by the UCR Act. The California DMV commented ``the MCMIS data 
is not a good benchmark to calculate the UCR fees.'' Finally, a carrier 
commented that the States should be provided accurate information of 
the number of interstate carriers from their State and then be required 
to obtain compliance of at least 90 percent if they are to participate.
Response
    FMCSA believes that bracket shifting has been a significant factor 
in causing the overall revenue shortfall. As explained in the NPRM, 
bracket shifting has caused a significant portion of the revenue 
shortfall in Registration Years 2007-2009. The shortfalls have occurred 
because motor carriers are not always required to use the number of 
CMVs reported to FMCSA and incorporated into MCMIS as the number of 
CMVs used to determine the applicable fee for UCR registration (74 FR 
45589-90).
    Only the participating States have access to the underlying data on 
revenue yields by bracket used to develop the analysis presented to the 
Board and utilized by FMCSA in developing the fees; FMCSA does not. No 
industry representative on the Board challenged the accuracy of the 
data on the revenue effect of bracket shifting shown in Table 8 in the 
NPRM when it was presented at Board meetings earlier this year.
    The data from MCMIS, despite apparent inadequacies, are the only 
data source available for developing the UCR fees and fee structure. As 
even ATA acknowledged: ``The agency's analysis of the overall motor 
carrier population is unobjectionable. The underlying data may not be 
all it should be, but anyone working in this area must begin with it.'' 
The MCMIS data base was not designed for and was not intended for use 
as a source for designing and then collecting the fees for the UCR Plan 
and Agreement. Nonetheless, FMCSA has made the data available for use 
by the UCR Plan and the participating States, at their request, 
because, as ATA points out, it is probably the best source that is 
available. The implementation of the UCR Plan and Agreement has had the 
benefit (along with other considerations) of leading FMCSA to implement 
procedures to improve the accuracy, reliability and timeliness of the 
motor carrier data in MCMIS. A few commenters also noted that the 
reliability of the MCMIS data used in the implementation and 
administration of the UCR Plan's registration has improved over time.
    Nonetheless, the motor carrier information contained in MCMIS, as 
self-reported by carriers filing and updating information on a form 
MCS-150, is not the sole basis under the statute for determining the 
appropriate fees to be paid by a carrier registering with the UCR Plan. 
As explained in detail in the NPRM, the statute permits carriers to 
register under a different fleet size than that which is reported in 
MCMIS (74 FR 45589-90).
    Generally FMCSA agrees with ATA and other commenters that there are 
a number of reasons for bracket shifting, some lawful and some not. 
However, ATA did not identify all of the legitimate reasons for which a 
motor carrier may shift to a bracket different than that indicated by 
the MCMIS database. For example, motor carriers may also exclude from 
their fleets vehicles under lease for terms of 30 days or less. 
Moreover, motor carriers may add CMVs to their fleets for the purpose 
of UCR registration, and, as indicated in the NPRM, hundreds of 
carriers apparently did so.

[[Page 22005]]

    FMCSA agrees that many motor carriers subject to the UCR Plan and 
Agreement do not fully understand their rights and responsibilities 
with respect to fees. Comments indicate that some motor carriers may 
not understand that there are legitimate reasons for adjusting the 
number of vehicles in their fleets for the purpose of registering with 
the UCR Plan. One motor carrier, for example, complained about having 
to pay a fee based on 148 power units when only 28 were used in 
interstate movements, while the rest were used to transport seasonal 
agricultural products within California. By statute, this carrier ``may 
elect not to include commercial motor vehicles used exclusively in the 
intrastate transportation of property * * * '' (49 U.S.C. 
14504a(f)(3)). This commenter did not explain why it would not make 
such an election, which would reduce its fee from $8,541 to $1,793 
under the proposal in the NPRM. Nevertheless, this is but one example 
of the many legitimate opportunities for a carrier to shift to a 
different UCR fee bracket.
    ATA does not support with any evidence its statement that 
registrations with improper bracket shifting ``are very likely major 
causes of the states' revenue shortfalls.'' On the other hand, the 
Alabama PSC reports in its comments that: ``Alabama's initial efforts 
at auditing carriers have uncovered no evidence of fraud or mistake.'' 
ATA also implies that the change removing towed vehicles from the CMV 
definition will reduce the amount of bracket shifting.
    On the other hand, as the example discussed above shows, there are 
still numerous situations that would allow a motor carrier to adjust 
its fleet size for UCR registration purposes, even when only power 
units are considered. FMCSA agrees that the removal of trailers and 
other towed vehicles from the definition of commercial motor vehicles 
for the purpose of determining the number of such vehicles owned and 
operated may lessen, but will not eliminate, bracket shifting. As 
indicated in the NPRM, and in the discussion above, there are numerous 
legitimate grounds for a registering motor carrier or freight forwarder 
to rely on in making such adjustments. Therefore, in the Agency's 
judgment, it would be reasonable to incorporate into the adjustment of 
the fees for 2010 an estimate that bracket shifting will produce a 
reduction of 15% in the revenues that would be expected from the number 
of CMVs reflected in the MCMIS data base. This is a change from the 
estimated revenue reduction of approximately 25% used in the NPRM. If 
industry's supposition that bracket shifting will diminish with the 
removal of towed CMVs from the fleets proves to be true to such an 
extent that revenues collected under the UCR Plan and Agreement, 
despite FMCSA's estimate that revenue loss due to bracket shifting will 
fall to 15%, the statute requires the Board and FMCSA to reduce the 
fees accordingly in the following year (49 U.S.C. 14504a(h)(4)).
5. Compliance Rates Likely To Decline
Comments
    Some commenters, including ATA and TIA, argued that sharply 
increased UCR Agreement fees would increase noncompliance, creating a 
future spiral of State revenue shortfalls and requests for yet higher 
fees. The Snack Food Association said that placing almost the entire 
burden of a solution on compliant carriers was unfair and that it was 
likely that a fee increase of this magnitude would decrease compliance 
rates.
Response
    FMCSA has no evidence to conclude that this final rule will 
increase non-compliance and create future spirals of revenue shortfalls 
and increased fees. State revenue collection for Registration Year 2010 
will depend not only on the fees published in this final rule, but also 
on States increasing their enforcement efforts. Given the incentive for 
greater enforcement built into this rule, there is no basis to conclude 
that higher fees will result in greater non-compliance. In fact, the 
opposite is true. States have every incentive to improve enforcement so 
that they can achieve the full amounts to which they are entitled. 
Finally, the Agency will be observing the Board's and the States' 
enforcement and audit activities closely. Future State revenue 
shortfalls do not in and of themselves guarantee fee increases.
6. Problem of Moral Hazard/Self-Fulfilling Prophecy
Comments
    ATA, TIA, and YRC Worldwide commented that, by mirroring the 
Board's proposal, FMCSA's proposal would create a moral hazard by 
signaling to States that they do not need to exert any enforcement 
efforts. UPS disagreed with FMCSA's division of the discussion of 
enforcement into participating and non-participating States. According 
to UPS, because UCR is a safety program, enforcement should not be 
optional for States. UPS also commented that revenue should not be the 
incentive for safety enforcement. UPS has very serious concerns about 
allowing any State or group of States the option of selectively 
enforcing Federal law. According to UPS, non-participating States 
should not be allowed to use the lack of revenue as an excuse for not 
enforcing the program.
    UPS argued in favor of using the total population, without any 
reductions, as the basis for the fee calculation. That a significant 
number have not registered ``is not a justification for accepting this 
non-compliance,'' in UPS' opinion, and ``is evidence of the lack of 
effective enforcement of the UCR by the states.''
Response
    FMCSA disagrees that the final rule will create a moral hazard or 
other incentive for States not to enforce the UCR program against 
eligible entities.
    Despite characterizations to the contrary, FMCSA's proposal does 
not mirror or substantially adopt the Board's proposal. FMCSA did not 
believe that the Board's proposal took into account the need for 
increased State enforcement efforts, among other things. As a result, 
FMCSA proposed a different fee structure that factored in an average 
compliance rate of 86.4 percent, which has been slightly adjusted to 
85.5 percent in this final rule. This is a significant increase over 
the compliance rate for registration years 2007--2009, as well as the 
compliance rate incorporated into the Board's April 3, 2009, proposal. 
FMCSA believes that the fee structure incorporated in this final rule 
sets realistic compliance goals that require States to improve their 
enforcement efforts in order to reach the statutory entitlement 
amounts.
    As explained above, the statute only authorizes FMCSA to set fees. 
Clearly, FMCSA can create incentives for enforcement, as it has in this 
final rule, by setting fees that require increased enforcement efforts 
in order for participating States to reach their entitlement levels.
    FMCSA believes that participating States can improve the number of 
registrations by targeting carriers through roadside enforcement 
efforts, especially at State border crossings, and mailing campaigns. 
Still, FMCSA recognizes that participating States' opportunities for 
extra-jurisdictional enforcement are inherently limited. A number of 
carriers transporting goods or people in interstate commerce might 
never leave their home States. There is very little that participating 
States can do in these circumstances, except undertaking outreach 
efforts. FMCSA has attempted to balance the realities of these 
limitations with its statutory directive to set fees so that States 
receive their entitlement revenue amounts.

[[Page 22006]]

7. Fee Increase in Response to Change to CMV Definition
Comments
    A minority of commenters from industry and a few industry 
associations opposed any increase in the fees, even that portion of the 
increase required to reflect the change in the statute defining 
``commercial motor vehicle'' for UCR purposes beginning in 2010. 
However, a substantial proportion of the motor carrier commenters, 
following the lead of ATA, and all of the comments on behalf of State 
interests, agreed that some increase in the fees is necessary because 
of that statutory change. Two commenters stated that the industry 
understands that a fee adjustment is necessary to accommodate the 
elimination of trailers from the fee calculation, and that ``Table 4 in 
the NPRM would be acceptable to most in the trucking industry.'' 
Several trucking associations also stated that they would accept the 
fees in Table 4 of the NPRM that reflected only the change in the 
definition. ATA and TIA also commented that the exclusion of towed 
units from the definition of CMV should eliminate some confusion among 
motor carriers and result in some revenue gain.
Response
    FMCSA does not agree that the 2010 fee adjustment should take into 
account only the statutory change to the definition of CMV. As 
explained previously, the statute requires FMCSA to set the fees at a 
level that will provide the States their revenue entitlements. In order 
to discharge its statutory duties, FMCSA must also take into account 
the realities of bracket shifting and a reasonable compliance rate. 
These two factors, especially bracket shifting, have been, in FMCSA's 
view, the cause of the revenue shortfalls, and must be taken into 
account as well in setting the fees for 2010. A fee level that only 
takes into account the statutory change would not enable the 
participating States to reach their statutorily mandated revenues.
8. Other Arguments Against Fee Proposals
a. FMCSA Did Not Balance All Factors Appropriately
Comments
    ATA and TIA commented that by not granting the Board sole 
discretion to set fees, Federal law implies that FMCSA is to exercise 
some discretion and balance the interests of the participating States 
with the interests of the industry members. ATA and TIA argued that 
there is no indication in the NPRM that the Agency has done this.
Response
    Although many commenters contend that FMCSA has an implied duty to 
balance State and industry interests, none have cited legal authority 
to support this position. In many respects, the specific language of 
the statute restricts, rather than expands, the Agency's discretion. As 
explained above, FMCSA may balance State and industry interests only to 
the extent that doing so does not frustrate its statutory obligation to 
set fees that enable States to achieve their revenue entitlements. (See 
Section III, above.)
b. Eliminate Administrative Costs and Reserve From the Calculation
Comments
    Alaska Trucking Association objected to including $5 million for 
administrative expenses under the current economic conditions. An 
individual trucker echoed this objection. ATA and TIA objected to 
including both $5 million for administrative expenses and the $563,885 
revenue reserve. ATA said that the reserve fund request is unsupported 
by statute, and the concept ``belies the assumed precision that 
underlies the rest of the fee proposal.'' Minnesota Trucking 
Association commented that there is no economic justification for 
including administrative expenses and a revenue reserve.
Response
    FMCSA disagrees with the commenters who contend that including 
administrative costs in the fee calculation is inappropriate. In 
setting the fees, the statute directs FMCSA to consider administrative 
costs associated with the UCR Plan and Agreement (49 U.S.C. 
14504a(d)(7)(A)(i)). Considering this statutory obligation, FMCSA 
believes it is not only reasonable, but imperative, to include these 
costs in the fee calculation. The amount of the estimated 
administrative costs was approved by the UCR Plan's board of directors, 
and FMCSA does not see any basis for rejecting that recommendation.
    Although FMCSA is not statutorily obligated to include a revenue 
reserve in the fee calculation, the Agency nonetheless believes it is 
within its discretion to include this amount if it is necessary to 
fulfill its statutory obligations. This amount was designed to account 
for any uncertainties involved in the fee calculation to ensure that 
the States are able to achieve their entitlement revenue levels. In 
fact, FMCSA included a 0.5 percent revenue reserve as a component of 
the fees for Registration Years 2007-2009 without receiving any 
negative comments.
    Nonetheless, FMCSA has decided to remove the revenue reserve 
component from the fee calculations in the final rule. After 3 years of 
experience administering the fees, FMCSA believes that the initial 
uncertainties prompting inclusion of a revenue reserve have diminished. 
Both FMCSA and the Plan have a greater understanding of the factors 
that have caused under-collection (such as population definition, 
compliance rates and bracket shifting) and have adjusted the final rule 
accordingly. As a result, the Plan should face significantly less 
uncertainty, negating the need for the revenue reserve. This final rule 
removes the revenue reserve from the amount of the total revenue 
entitlement, which has been adjusted to $112,777,060 from the 
$113,340,945 proposed in the NPRM (74 FR 45588).
c. ``Reasonable'' Fee Required by Statute
Comments
    Several trucking associations and carriers, citing 49 U.S.C. 
14504a(f)(1)(E), argued that the law requires UCR fees to be adjusted 
``within a reasonable range'' and that the proposed increase is not 
``reasonable.'' These commenters included ATA, TIA, UPS, the American 
Bus Association, the Snack Food Association, the United Motorcoach 
Association, and National Tank Truck Carriers. Some asserted that, 
given the state of the economy, the increase proposed by the NPRM is 
not reasonable; others pointed to the size of the proposed increase as 
unreasonable. The TRLA and the NPTC also opposed the proposed fees as 
unreasonable and in violation of Sec.  14504a(e)(1)(B). In addition, 
they argued that the State recipients of UCR fee revenues have not 
demonstrated that they are in compliance with the requirement in the 
UCR Act that they use an amount equivalent to the UCR revenues on motor 
carrier safety programs, enforcement, or administration of the UCR 
program, citing Sec.  14504a(e)(1)(B). The NPTC added that private 
motor carriers did not pay into the SSRS, but they agreed to pay UCR 
fees on the grounds that the revenue would be used solely for motor 
carrier safety enforcement. NPTC said that, without an audit of the use 
of UCR revenue by the States, any increase in fees above that necessary 
to meet the changed definition of CMV is inherently unreasonable. The 
Snack Food Association also argued that the doubling of fees did not 
meet the ``reasonable range'' test, especially given

[[Page 22007]]

the ``extreme economic pressures'' facing the for-hire carrier 
industry. The American Bus Association also commented that FMCSA had 
merely ``rubber-stamped'' the Board's request ``in the mistaken belief 
that it must approve any request,'' and questioned whether the Agency 
had fulfilled its duty to determine the reasonableness of a Board 
adjustment recommendation.
Response
    FMCSA does not agree that the 2010 UCR fees are unreasonable. FMCSA 
has interpreted the statutory text that directs that any annual 
adjustment be ``within a reasonable range'' to mean that the 
determination of what is reasonable must be made in the context of its 
obligation to enable States to receive their statutorily mandated 
revenues. As explained in Section III, above, factors that frustrate 
the statutory objective of providing the participating States their 
entitled revenues are not consistent with FMCSA's statutory directive.
    FMCSA disagrees that it has ``rubber-stamped'' the Board's 
recommendation or that the Secretary has not discharged his statutory 
duties. In fact, FMCSA concluded that the Board's recommendation 
submitted on April 3, 2009, did not adequately address three factors: 
carrier population, bracket shifting and enforcement. In the NPRM, 
FMCSA explained in detail why it believes that the fees should take 
these factors into account and how the fees should be calculated. In 
incorporating these factors into its proposed fee, including a detailed 
explanation of its calculations, FMCSA proposed a methodology very 
different from that which the Board recommended.
    Finally, FMCSA does not agree that the reasonableness of the fees 
depends on an audit of States' use of UCR registration fees. Although 
several commenters asserted that FMCSA has a duty to ensure that States 
are using these revenues for safety enforcement, none identified with 
any specificity the legal basis for this assertion. FMCSA is not aware 
of any statutory or other provision that requires it to conduct an 
audit of State activities prior to adjusting the fees.
d. FMCSA Should Retain Current Fees
Comments
    Several owner-operators asked explicitly that the current fees be 
kept in place while the implicit message from many other commenters was 
the same. One trucking company said that all fee increases ``other than 
the absolute minimum necessary to support the programs'' should be 
postponed until it is clear the motor carrier industry is moving out of 
the current recession. California U-Haul commented the fees should 
remain consistent with prior years, suggesting that an increased 
emphasis on enforcement would result in increased revenue.
Response
    FMCSA does not agree that the 2010 fees should remain the same as 
the fees set for Registration Years 2007-2009. FMCSA has a statutory 
duty to enable States to achieve their revenue entitlements and does 
not believe that setting 2010 fees at current levels is consistent with 
that duty. As explained above, the Agency believes that the 2010 fees 
must take into account the change to the definition of CMV, bracket 
shifting and compliance rates.
e. Partial Increase Associated With Increased Enforcement
Comments
    FMCSA received several comments requesting that the Agency modify 
the timing of the fee and alter the method of enforcement. One 
commenter requested a partial increase in the fees, with the remaining 
amount phased in over time. A commenter requested that FMCSA allow 
roadside enforcement to collect all outstanding UCR fees from that 
motor carrier for all registration years before allowing the motor 
carrier to continue its travel.
Response
    FMCSA does not agree that these alternatives would present a better 
fee structure than that proposed in the NPRM. A phased-in fee structure 
would further complicate enforcement efforts, creating additional 
expenses and confusion for both participating States and registering 
entities. The 2010 fee structure is the Agency's best attempt to 
rectify the shortcomings of previous years' fees, including addressing 
population, bracket shifting and compliance issues. Finally, as 
explained above, while FMCSA can encourage States to take enforcement 
action indirectly by setting compliance goals, it has no authority to 
require States to take specific enforcement actions. Any effort to make 
UCR delinquency an out-of-service criterion must be taken up at the 
State level.
f. Increase Number of Brackets/Revise Bracket Structure
Comments
    ATA and TIA approved of using the maximum number of brackets 
permitted by statute, as FMCSA had done. ATA and TIA also said that 
FMCSA had properly applied the principle of progressivity required by 
the Act so that the per-vehicle fees at the bottom of each bracket are 
substantially equivalent across the fee structure. However, other 
commenters criticized the bracket structure. One commenter argued that 
the fees should be assessed on a per-power-unit basis instead of using 
brackets.
    A few commenters addressed the break point between the first two 
brackets. Both the Minnesota Trucking Association and the Missouri DOT 
supported changing bracket 1 from 0-2 to 0-1 and bracket 2 from 3-5 to 
2-5, as recommended by the Board. This would keep more companies in the 
same tier category as previously and minimize the revenue loss. Another 
commenter said FMCSA should reconsider whether the lowest bracket 
should break at one or two power units. It cited a decision by the 
Board that a business operating one power unit is significantly 
different from one that operates two or more. ATA and TIA also 
addressed the lowest bracket and said that FMCSA should explain the 
discrepancy between its proposal and the Board's recommendation.
Response
    While FMCSA acknowledges commenters' concerns about the bracket 
structure, the Agency has decided to retain the bracket structure from 
the current fees in this final rule. Inevitably, because of the limited 
number of brackets and heterogeneous types of vehicles and operations, 
either the existing UCR fee structure or a new UCR proposal could prove 
advantageous to some carriers and disadvantageous to other carriers. 
The changes proposed by FMCSA actually help to redress some of the 
disparities in fees per power unit that exist under the current rule. 
(See the Regulatory Flexibility Act section below.) The rule could be 
adjusted to reduce the impacts on any individual carrier or group of 
carriers, but given that the same revenue target would have to be met, 
this would only result in the collection of additional revenues from 
other carriers. Other changes in the bracket structure (such as 
increasing the number of brackets) would require a statutory amendment.
    Nonetheless, in an effort to respond to comments on the bracket 
structure, FMCSA will assist the UCR Plan in revisiting the bracket 
structure when the UCR Plan begins considering any adjustments in fees 
for future registration years. The Agency can provide technical 
assistance to support a thorough analysis of alternative bracket 
structures to reduce the

[[Page 22008]]

economic impact on small businesses to the greatest extent practicable. 
While the statute requires the UCR Plan to develop no more than 6 and 
no fewer than 4 brackets of carriers (including motor private carriers) 
based on the size of the fleet, the statute does provide flexibility in 
the number of power units included in each of the brackets and allows 
the registration fees to be adjusted within a reasonable range on an 
annual basis if the fees are either insufficient to provide the 
participating States with the revenues they are entitled to receive or 
lead to a revenue excess (49 U.S.C. 14504a(f)(1)(E)). Therefore, 
separate from this rulemaking, the Agency will assist the UCR Plan in 
revisiting the bracket structure and in considering alternatives to the 
current structure, to the extent practicable under the current statute, 
while ensuring the States receive the funds necessary to fulfill the 
statutory requirement
g. Tie Fees to Other Motor Carrier Programs
Comments
    One commenter suggested looking at the IRP as the basis for the UCR 
fees. State-issued registrations would not be issued until the required 
fees are paid. This would provide a fee that is more manageable for 
every power unit subject to submitting Internal Revenue Service Form 
2290. Another urged ``make it a requirement with a lesser fee to show 
proof of payment when doing the yearly registration or IFTA renewal 
same as the 2290.'' The California DMV argued that because the data in 
MCMIS are inaccurate due to poor carrier reporting and a confusing 
``interstate carrier'' definition, the UCR fee calculation should be 
based on the IRP count of interstate carriers. Because the IRP requires 
a carrier to cross the jurisdictional line to be considered an 
interstate carrier, use of IRP would ensure an ``absolute, accurate 
count'' of interstate carriers, although it would exclude from UCR 
registration carriers operating in a single State while transporting 
interstate passengers or property. Fees also could be affixed to the 
IRP credential process.
    Other comments suggested tying UCR funds to existing FMCSA grant 
programs (e.g., Performance and Registration Information Systems 
Management [PRISM] or Motor Carrier Safety Assistance Program [MCSAP]). 
Commenters suggested that linking UCR funding to these programs would 
provide enforcement incentives to both participating and non-
participating States.
Response
    FMCSA does not believe that it has the legal authority to adopt the 
changes these commenters requested. The Board, not FMCSA, has the 
authority to issue the rules and regulations, including those related 
to administration of the program (49 U.S.C. 14504a(d)(2)). In the 
absence of statutory authorization, FMCSA lacks the authority to re-
structure or order the re-structuring of the manner in which UCR fees 
are collected. However, some States have enacted legislation 
authorizing them to collect UCR fees at the same time they register 
vehicles and collect IFTA fees. FMCSA encourages all States to engage 
in this kind of proactive collection effort, but lacks the authority to 
mandate it.
    Some of the program linkages and other suggestions submitted by 
commenters may have merit. However, all of them would require statutory 
changes that are clearly beyond FMCSA's power to accomplish in this 
rulemaking. Such changes may well be appropriate for consideration by 
Congress during the next reauthorization of motor carrier programs 
administered by the Department of Transportation but unless and until 
such changes are enacted, FMCSA must carry out its responsibilities 
under the current provisions of the statute.
h. Fees for 2010
Comments
    ATA contends that the States may not begin assessing and collecting 
UCR fees for 2010 ``until the fee structure is amended to reflect the 
statutory change [in the definition of CMVs].''
Response
    The comment by ATA does not reflect a correct interpretation of the 
effect of the amendment to 49 U.S.C. 14504a(a)(1)(A) modifying the 
definition of ``commercial motor vehicle'' that became effective for 
years beginning after December 31, 2009. The FMCSA recently issued 
regulatory guidance on the effect of the amendment on the application 
of the fees established in 49 CFR 367.20 (Regulatory Guidance 
Concerning the Applicability of Fees for the Unified Carrier 
Registration Plan and Agreement, 75 FR 9487 (March 2, 2010). The 
statutory amendment of the applicable definition of commercial motor 
vehicles in 49 U.S.C. 14504a that applies beginning after December 31, 
2009, also governs the application of the fees established by Sec.  
367.20 so that it applies to registration years beginning after 
December 31, 2009 until superseded by an adjusted set of fees. 
Therefore, the States participating in the UCR Plan and Agreement may 
assess and collect fees pursuant to the fee schedule set forth in 49 
CFR 367.20 until the fees adopted in this final rule become effective. 
A technical change in the heading of 49 CFR 367.20 is necessary to 
reflect the regulatory guidance.

VI. The Final Rule

    After considering the comments received on the proposed rule, FMCSA 
is adopting the final rule as proposed with changes.
    In accordance with 49 U.S.C. 14504a(g)(4), FMCSA proposed in the 
NPRM to approve the amount of revenue under the UCR Agreement to which 
each State participating in 2010 is entitled. The FMCSA included in its 
proposed revenue estimate administrative expenses of $5 million and a 
revenue reserve of 0.5 percent. After evaluating comments that opposed 
inclusion of the administrative expenses and the revenue reserve, FMCSA 
has concluded that it is statutorily required to include the 
administrative expenses, but has decided to remove the revenue reserve 
component from the fee calculations in the final rule. FMCSA is, 
therefore, approving the amount of revenue under the UCR Agreement to 
which each State participating in 2010 is entitled, and the final 2010 
revenue target, as specified in the following table.

  Table 5--State UCR Revenue Entitlements and Final 2010 Revenue Target
------------------------------------------------------------------------
                                                         Total 2010 UCR
                         State                               revenue
                                                          entitlements
------------------------------------------------------------------------
Alabama...............................................     $2,939,964.00
Arkansas..............................................      1,817,360.00
California............................................      2,131,710.00
Colorado..............................................      1,801,615.00
Connecticut...........................................      3,129,840.00
Georgia...............................................      2,660,060.00
Idaho.................................................        547,696.68
Illinois..............................................      3,516,993.00
Indiana...............................................      2,364,879.00
Iowa..................................................        474,742.00
Kansas................................................      4,344,290.00
Kentucky..............................................      5,365,980.00
Louisiana.............................................      4,063,836.00
Maine.................................................      1,555,672.00
Massachusetts.........................................      2,282,887.00
Michigan..............................................      7,520,717.00
Minnesota.............................................      1,137,132.30
Missouri..............................................      2,342,000.00
Mississippi...........................................      4,322,100.00
Montana...............................................      1,049,063.00
Nebraska..............................................        741,974.00
New Hampshire.........................................      2,273,299.00
New Mexico............................................      3,292,233.00
New York..............................................      4,414,538.00

[[Page 22009]]

North Carolina........................................        372,007.00
North Dakota..........................................      2,010,434.00
Ohio..................................................      4,813,877.74
Oklahoma..............................................      2,457,796.00
Pennsylvania..........................................      4,945,527.00
Rhode Island..........................................      2,285,486.00
South Carolina........................................      2,420,120.00
South Dakota..........................................        855,623.00
Tennessee.............................................      4,759,329.00
Texas.................................................      2,718,628.06
Utah..................................................      2,098,408.00
Virginia..............................................      4,852,865.00
Washington............................................      2,467,971.00
West Virginia.........................................      1,431,727.03
Wisconsin.............................................      2,196,680.00
                                                       -----------------
  Sub-Total...........................................    106,777,059.81
Alaska................................................        500,000
Delaware..............................................        500,000
                                                       -----------------
  Total State Revenue Entitlement.....................    107,777,060
Administrative Expenses...............................      5,000,000
                                                       -----------------
  Total 2010 Revenue Target...........................    112,777,060
------------------------------------------------------------------------

    FMCSA is also revising the RPR factor set out in Table 13 of the 
NPRM. Because of time constraints, an approximate recent population was 
used to develop the weighted average projected compliance rate of 86.42 
percent. Data for 2008 are now available that provide the actual number 
of motor carrier entities allocated between the participating and non-
participating States. As a result, a slight adjustment in the 
calculations in Table 13 has been made. The revised table is set out 
below:

                 Table 6 (Table 13 Revised)--Registration Percentage Reasonableness (RPR) Factor
----------------------------------------------------------------------------------------------------------------
                                                   Recent          Board's                           FMCSA's
                                                 population       projected         FMCSA's         projected
                                                   (2008)       registrations    estimated RPR    registrations
----------------------------------------------------------------------------------------------------------------
Participating States........................          370,575          333,518              90%          333,518
Non-Participating States....................           62,960           50,368              59%           37,146
                                             -------------------------------------------------------------------
    Total...................................          433,535          383,886           85.50%          370,664
----------------------------------------------------------------------------------------------------------------

    The one substantial change made in this final rule involves the 
appropriate adjustment to recognize bracket shifting. In the NPRM, 
FMCSA considered empirical data reflecting the participating States' 
actual experience with bracket shifting during the years 2007-2009. The 
analysis indicated that the States experienced a reduction of expected 
revenues of approximately 25% as a result of bracket shifting during 
those registration years. The proposed fees in the NPRM were based on 
an expectation that a similar amount of revenue loss from bracket 
shifting would occur in 2010. The adjustment was made because motor 
carriers would register in a different bracket than the bracket 
predicted from the number of CMVs reported to FMCSA and reflected in 
the MCMIS data. As previously explained, there are several provisions 
that permit motor carriers to adjust the number of commercial motor 
vehicles reported to FMCSA when registering and determining the 
applicable fee. In addition, as suggested in the comments, some 
carriers may not have included towed CMVs in the number of CMVs used to 
determine the applicable fee because of confusion or an unclear 
understanding of the applicable requirements.\11\ Now that the 
statutory amendment means trailers and other towed vehicles are not to 
be considered in determining the number of commercial motor vehicles, 
the possibility of confusion or uncertainty is reduced. Because of the 
many other legitimate reasons that bracket shifting can occur, FMCSA 
finds that it is appropriate, in setting the fees in this final rule, 
to incorporate a smaller factor of 15% (instead of the 25% proposed in 
the NPRM) for the revenue loss expected to occur in 2010 because of 
bracket shifting.
---------------------------------------------------------------------------

    \11\ Under SSRS, only self-propelled vehicles were ever subject 
to the payment of the per-vehicle fees charged, which may have 
created some confusion when the UCR Plan's fees were implemented. 
See 49 CFR 367.1(c).
---------------------------------------------------------------------------

    The table below shows the fees adopted by this rule as a result of 
the FMCSA's decision to remove the revenue reserve component from the 
fee calculations, the revision of the RPR factor and the modification 
of the factor used to adjust for the estimated effect of bracket 
shifting in 2010.

       Table 7--Fees Under the Unified Carrier Registration Plan and Agreement for Registration Year 2010
----------------------------------------------------------------------------------------------------------------
                                                                               Fee per entity
                                                  Number of CMVs owned or       for exempt or
                                                operated by exempt or non-    non-exempt motor   Fee per entity
                   Bracket                      exempt motor carrier, motor    carrier, motor     for broker or
                                                private carrier, or freight   private carrier,   leasing company
                                                         forwarder               or freight
                                                                                  forwarder
----------------------------------------------------------------------------------------------------------------
B1..........................................  0-2...........................               $76               $76
B2..........................................  3-5...........................               227  ................
B3..........................................  6-20..........................               452  ................
B4..........................................  21-100........................             1,576  ................
B5..........................................  101-1,000.....................             7,511  ................
B6..........................................  1,001 and above...............            73,346  ................
----------------------------------------------------------------------------------------------------------------

[[Page 22010]]

    As indicated previously in this preamble, FMCSA will assist the UCR 
Plan in revisiting the bracket structure when the Plan begins 
considering any adjustments in the fees for future registration years. 
The Agency can provide technical assistance to support a thorough 
analysis of alternative bracket structures to reduce the economic 
impact on small businesses to the greatest extent practicable.
    FMCSA also received comments supporting its proposal to revise 49 
CFR part 367 by eliminating current subpart A, which contains 
regulations implementing the provisions of now-repealed 49 U.S.C. 
14504. Therefore, this final rule removes current 49 CFR part 367 
subpart A in its entirety. Second, the heading of 49 CFR 367.20 is 
changed to specify that the fees established by that section are 
applicable for each registration year until a subsequent adjustment in 
the fees becomes effective. Third, a new 49 U.S.C. 367.30 establishes 
the fees applicable to registration years beginning on January 1, 2010. 
As described above, the elimination of a revenue reserve from the 2010 
revenue target and a revision to the blended estimated compliance rate 
has caused FMCSA to revise and reduce slightly the 2010 fees proposed 
in the NPRM. Finally, this final rule makes a technical change in the 
headings to the fee tables to make clear that the fees are applicable 
to all entities that are required to register and pay fees to the UCR 
Plan.

VII. Regulatory Analyses and Notices

Administrative Procedure Act

    The Administrative Procedure Act's rulemaking provision in 
subsection (d)(3) of 5 U.S.C. 553 allows FMCSA to make a final rule 
effective on its publication date for good cause. Making this final 
rule effective on the date of publication will allow the participating 
States to begin registering motor carrier entities and billing and 
collecting fees for 2010 in accordance with the established procedures. 
Such immediate effectiveness will not harm any person or regulated 
entity, but will avoid any confusion caused by departure from those 
procedures. Any delay in collecting 2010 fees could also have a serious 
impact on participating States by causing them to lay off State 
employees and to curtail compliance and enforcement efforts, thereby 
jeopardizing the statutory objective of ensuring State revenues. FMCSA 
therefore finds that it is necessary to make this final rule effective 
immediately upon publication.

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    In the NPRM, FMCSA made a preliminary determination that the 
proposed rule was not a significant regulatory action within the 
meaning of Executive Order 12866 and the U.S. Department of 
Transportation's regulatory policies and procedures (DOT Order 2100.5 
dated May 22, 1980; 44 FR 11034, February 26, 1979). It made this 
preliminary determination by finding that the costs of the proposed 
regulatory action would not exceed the $100 million annual threshold as 
defined in Executive Order 12866.

Comments on the Economic Significance and Other Significance of the 
Rulemaking

    Several commenters said that FMCSA's determination that this is not 
a significant rulemaking is erroneous and that the regulatory action 
involved is significant, both economically and otherwise under 
Executive Order 12866, and therefore deserves a full administrative 
review.
Response
1. The Final Rule Is Not Economically Significant
    FMCSA does not agree with the commenters' contention that this rule 
is economically significant. Although the total fees collected are 
projected to be over $100 million annually, the change from the 
existing situation (e.g., the approximately $77 million collected in 
2008 and in 2009 (see 74 FR at 45586) is well below $100 million. This 
situation is similar to previous UCR rulemakings, which were also 
determined to be not economically significant. Finally, as shown under 
section V (C)(1) above, the effects on the motor carrier industry would 
be too small on a per-CMV basis to have a material impact.
    Therefore, FMCSA adheres to its preliminary determination that this 
rule is not economically significant based on the size of the 
additional fees to be collected under the UCR. The costs of the rule 
are required pursuant to an explicit Congressional mandate. Because a 
majority of the fees under the final rule are already being collected 
under the UCR system, the total cost of the final rule will be 
substantially less than $100 million per year. A major intent of the 
proposed rule is to eliminate the revenue shortfalls that the UCR 
system has experienced over the past several years; that shortfall was 
$38 million in 2008, for instance, and of similar magnitude in 2007 and 
2009. This increase, though, will clearly be less than the $100 million 
threshold for a significant impact on the economy. The Agency has 
prepared a regulatory analysis of the rule. A copy of the analysis 
document is included in the docket referenced at the beginning of this 
notice.
2. The Final Rule Is Significant on Other Grounds
    FMCSA finds that novel legal or policy issues are raised in this 
regulatory action, and that the final rule is significant under 
Executive Order 12866. FMCSA received over 150 comments, a number of 
which raised novel legal or policy issues that are appropriate for 
review under the regulatory review provisions of that order.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (RFA), as amended 
by the Small Business Regulatory Enforcement Fairness Act (SBREFA), (5 
U.S.C. 601-612), FMCSA has considered the effects of this regulatory 
action on small entities. The fees being set in this rule would affect 
large numbers of small entities because the rule sets fees for hundreds 
of thousands of carriers of all sizes, and small entities are defined 
to include all entities that are not dominant in their industries. In 
previous rulemakings, FMCSA identified for-hire carriers with fewer 
than 145 power units (i.e., trucks or tractors) as small. Thus, all of 
the for-hire carriers in Brackets 1 through 4 would be considered 
small, as would many of those in Bracket 5.
    Carriers are not required to report revenue to the Agency, but are 
required to provide the Agency with the number of power units they 
operate when they apply for operating authority and to update this 
figure biennially. Because FMCSA does not have direct revenue figures, 
power units serve as a proxy to determine the carrier size that would 
qualify as a small business given the SBA's revenue threshold. In order 
to produce this estimate, it is necessary to determine the average 
revenue generated by a power unit. With regards to truck power units, 
the Agency determined in the 2003 Hours of Service Rulemaking RIA \12\ 
that a power unit produces about $172,000 in revenue

[[Page 22011]]

annually (adjusted for inflation).\13\ According to the SBA, motor 
carriers with annual revenue of $25.5 million are considered a small 
business.\14\ This equates to 148 power units (25,500,000/172,000). 
Thus, FMCSA considers motor carriers with 148 power units or less to be 
a small business for SBA purposes.
---------------------------------------------------------------------------

    \12\ Regulatory Analysis for: Hours of Service of Drivers; 
Driver Rest and Sleep for Safe Operations, Final Rule--Federal Motor 
Carrier Safety Administration. 68 FR 22456--Published 4/23/2003.
    \13\ The 2000 TTS Blue Book of Trucking Companies, number 
adjusted to 2008 dollars for inflation.
    \14\ U.S. Small Business Administration Table of Small Business 
Size Standards matched to North American Industry Classification 
(NAIC) System codes, effective August 22, 2008. See NAIC subsector 
484, Truck Transportation.
---------------------------------------------------------------------------

    With regards to bus power units, the Agency conducted a preliminary 
analysis to estimate the average number of power units (PUs) for a 
small entity earning $7 million annually, based on an assumption that a 
passenger carrying CMV generates annual revenues of $150,000. This 
estimate compares reasonably to the estimated average annual revenue 
per power unit for the trucking industry ($172,000). A lower estimate 
was used because buses generally do not accumulate as many vehicle 
miles traveled (VMT) per power units as trucks,\15\ and it is assumed 
therefore that they would generate less revenue on average. The 
analysis concluded that passenger carriers with 47 PUs or fewer 
($7,000,000 divided by $150,000/PU = 46.7 PU) would be considered small 
entities. The Agency then looked at the number and percentage of 
passenger carriers registered with FMCSA that would fall under that 
definition (of having 47 PUs or less). The results show that 28,838 
\16\ (or 99%) of all active registered passenger carriers have 47 PUs 
or less. Therefore, the overwhelming majority of passenger carriers 
would be considered small entities.
---------------------------------------------------------------------------

    \15\ FMCSA Large Truck and Bus Crash Facts 2008, Tables 1 and 
20; http://fmcsa.dot.gov/facts-research/LTBCF2008/Index-2008Large_
TruckandBusCrashFacts.aspx.
    \16\ FMCSA MCMIS snapshot on 2/19/2010.
---------------------------------------------------------------------------

    After careful consideration, however, FMCSA has determined that the 
recommended UCR fee will, in every case involving a viable small 
entity, be well below the threshold level of one percent of revenues 
used for determining significant impacts. This conclusion is based the 
observation that the maximum fee per vehicle is $76, which is less than 
one percent of the $14,500 annual salary of even a single employee 
working 40 hours per week for 50 weeks per year and earning the current 
Federal minimum wage of $7.25.\17\ Because an entity without sufficient 
revenues to pay even one employee per vehicle would not be viable, it 
is clear that the recommended UCR fees will not reach the threshold of 
one percent of revenues. Thus, FMCSA certifies that the rule will not 
have a significant economic impact on a substantial number of small 
entities.
---------------------------------------------------------------------------

    \17\ The Fair Labor Standards Act (FLSA) establishes minimum 
wage, overtime pay, recordkeeping, and youth employment standards 
affecting employees in the private sector and in Federal, State, and 
local governments. Covered nonexempt workers are entitled to a 
minimum wage of not less than $7.25 per hour effective July 24, 
2009. http://www.dol.gov/esa/whd/flsa/.
---------------------------------------------------------------------------

    Several commenters addressed the impact of the change in the fees 
on small entities. A carrier with 11 tractors noted that its costs are 
spread over fewer assets than those of larger companies. The carrier 
also said that any further cost increases will drive smaller companies 
out of business. The American Bus Association said that the average bus 
operator has eight motorcoaches, and described the operator as a small 
business that would be impacted by the fees. FMCSA cannot validate this 
and therefore did not include this in the analysis. In contrast, 
another carrier approved of the proposed fee structure because it would 
benefit owner-operators and small trucking companies.
    Based on this analysis as well as the rule's regulatory evaluation, 
FMCSA certifies that the rule will not have a significant economic 
impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; 2 U.S.C. 
1532) requires each agency to assess the effects of its regulatory 
actions on State, local, and tribal governments and the private sector. 
Any agency promulgating a final rule likely to result in a Federal 
mandate requiring expenditures by a State, local, or tribal government, 
or by the private sector of $136.1 million or more in any one year, 
must prepare a written statement incorporating various assessments, 
estimates, and descriptions that are delineated in the Act. FMCSA has 
determined that this rule will not have an impact of $136.1 million or 
more in any one year.

Executive Order 12988 (Civil Justice Reform)

    This rule meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

Executive Order 13045 (Protection of Children)

    FMCSA has analyzed this rule under Executive Order 13045, 
Protection of Children from Environmental Health Risks and Safety 
Risks. FMCSA has determined that this rulemaking would not create an 
environmental risk to health or safety that would disproportionately 
affect children.

Executive Order 12630 (Taking of Private Property)

    This rule would not affect a taking of private property or 
otherwise have taking implications under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights.

Executive Order 13132 (Federalism)

    This rule has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132. FMCSA has determined that 
this rulemaking would not have a substantial direct effect on States, 
nor would it limit the policy-making discretion of the States. Nothing 
in this proposal would preempt any State law or regulation. As detailed 
above, the UCR Board of Directors includes substantial State 
representation. The States have already had notice of this action and 
opportunity for input through their representatives and through 
comments submitted on the NPRM. FMCSA received comments from the States 
that failure to promulgate this rule would have a substantial direct 
effect on the States as outlined in Executive Order 13132.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this program.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that FMCSA consider the impact of paperwork and other information 
collection burdens imposed on the public. FMCSA has determined that 
there are no current or new information collection requirements by 
FMCSA associated with this rule.

National Environmental Policy Act

    The Agency analyzed this final rule for the purpose of the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and 
determined under our environmental procedures Order 5610.1, issued 
March 1, 2004 (69 FR 9680), that this action is categorically excluded 
(CE) under Appendix 2, paragraph 6.h of the Order from further 
environmental

[[Page 22012]]

documentation. The CE under Appendix 2, paragraph 6.h relates to 
establishing regulations and actions taken pursuant to the regulations 
implementing procedures to collect fees that will be charged for motor 
carrier registrations and insurance.
    FMCSA has also analyzed this rule under the Clean Air Act, as 
amended (CAA), section 176(c) (42 U.S.C. 7401 et seq.), and 
implementing regulations promulgated by the Environmental Protection 
Agency. Approval of this action is exempt from the CAA's General 
Conformity requirement since it involves policy development.

Executive Order 13211 (Energy Effects)

    FMCSA has analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. FMCSA has determined that it would not be a 
``significant energy action'' under that Executive Order because it 
would not be likely to have a significant adverse effect on the supply, 
distribution, or use of energy.

List of Subjects in 49 CFR Part 367

    Commercial motor vehicle, Financial responsibility, Motor carriers, 
Motor vehicle safety, Registration, Reporting and recordkeeping 
requirements.

0
For the reasons discussed in the preamble, the Federal Motor Carrier 
Safety Administration is amending title 49 CFR Chapter III, subchapter 
B, part 367 as follows:

PART 367--STANDARDS FOR REGISTRATION WITH STATES

0
1. Revise the authority citation for part 367 to read as follows:

    Authority: 49 U.S.C. 13301, 14504a; and 49 CFR 1.73.

Subpart A--[Removed and Reserved]

0
2. Remove and reserve subpart A, consisting of Sec. Sec.  367.1 through 
367.7 and Appendix A to subpart A.

Subpart B--Fees Under the Unified Carrier Registration Plan and 
Agreement

0
3. Amend subpart B by revising the heading of Sec.  367.20 to read as 
follows:

Sec.  367.20  Fees Under the Unified Carrier Registration Plan and 
Agreement for Each Registration Year Until Any Subsequent Adjustment in 
the Fees Becomes Effective.

* * * * *

0
4. Add Sec.  367.30 to subpart B to read as follows:

Sec.  367.30  Fees Under the Unified Carrier Registration Plan and 
Agreement for Registration Years Beginning in 2010.

            Fees Under the Unified Carrier Registration Plan and Agreement for Each Registration Year
----------------------------------------------------------------------------------------------------------------
                                                                               Fee per entity
                                                Number of commercial motor      for exempt or
                                               vehicles owned or operated by  non-exempt motor   Fee per entity
                   Bracket                      exempt or non-exempt motor     carrier, motor     for broker or
                                                  carrier, motor private      private carrier,   leasing company
                                               carrier, or freight forwarder     or freight
                                                                                  forwarder
----------------------------------------------------------------------------------------------------------------
B1..........................................  0-2...........................               $76               $76
B2..........................................  3-5...........................               227  ................
B3..........................................  6-20..........................               452  ................
B4..........................................  21-100........................             1,576  ................
B5..........................................  101-1,000.....................             7,511  ................
B6..........................................  1,001 and above...............            73,346  ................
----------------------------------------------------------------------------------------------------------------

    Issued on: April 21, 2010.
Alais L.M. Griffin,
Chief Counsel.
[FR Doc. 2010-9674 Filed 4-26-10; 8:45 am]
BILLING CODE 4910-EX-P