Opinion ID: 2009615
Heading Depth: 1
Heading Rank: 12

Heading: irp assessment

Text: [7] Anderson filed renewal applications in Nebraska in 2003 and 2004 for apportioned registration under IRP. The DMV conducted an audit of Anderson's records to verify the mileage reported in the applications. Anderson did not keep mileage records during the audit period because Anderson believed it was not feasible to do so. After concluding that Anderson failed to maintain proper mileage records, the DMV assessed additional registration fees for Nebraska. Anderson claims the DMV improperly assessed these additional fees. To resolve this issue, we review Nebraska statutes [9] and regulations, [10] the IRP itself, and the IRP audit procedures manual. The record contains copies of the IRP documents. The copies show that some of the provisions on which we rely were amended during the 2004 audit period. As with the IFTA documents, the copies in the record contain only the revised language. Again, because the parties made these copies part of the record, we will rely on the language contained therein. An IRP registrant pays all registration fees to the base jurisdiction. The base jurisdiction then apportions the fees and distributes them to all member jurisdictions through which the registrant traveled. The registration fees are based in part on the percentage of miles traveled in each member jurisdiction. As such, the distance the registrant's vehicles traveled in the respective jurisdictions is critical information for IRP's operation. The IRP and its audit procedures manual set forth record-keeping requirements so that the base jurisdiction can verify the registrant's reported miles. The IRP's § 1501 provides that a registrant must maintain records to prove its application filing. Section 1501 states that the source documents must contain necessary details to trace vehicle movement. Section 1501 directs us to the audit procedures manual's § 400 for specific recordkeeping requirements. Subsection 401 of the audit procedures manual mandates that the registrant maintain operational records that support the total distance traveled in each jurisdiction and total distance traveled everywhere. Section 400 lists information that these mileage records must contain. The mileage records must include the trip origin and destination, total trip distance traveled, distance traveled by jurisdiction, and route of travel or beginning and ending odometer readings. A DMV regulation implementing the IRP similarly requires Nebraska registrants to maintain these mileage records. [11] If a registrant fails to maintain the required records, the jurisdiction may impose an assessment of liability. Under the IRP's § 1502, the member jurisdiction must estimate the registrant's true liability from (1) information the registrant furnished (2) information the member jurisdiction gathered (3) information relative to other similar registrants based in the jurisdiction or (4) any other information available to the member jurisdiction. But [i]f an estimate of the registrant's true liability cannot be determined, subsection 603 of the audit procedures manual provides that the registrant may be assessed 100% registration fees for the [auditing] jurisdiction. (Emphasis supplied.) Similarly, a DMV regulation states, If adequate records are not maintained or are not made available for audit, the registrant may lose the right to apportioned registration and may be subject to a possible full fee assessment. [12] Anderson did not maintain mileage records during the audit period. According to Anderson, such logs were not feasible because of Anderson's day-to-day business operations, where the drivers drive all day, making multiple short trips between the jobsite and dumpsite. And, when the project is in downtown Omaha, the drivers often cross into Iowa for a dumpsite in Council Bluffs. Anderson claims that it was not feasible to log odometer readings for each trip. [13] After deciding it could not determine an estimate of Anderson's true liability without the required mileage records, the DMV assessed 100-percent registration fees for Nebraska. The deficiency determination (an additional $18,000 in registration fees) represented the difference between the percentage of Nebraska miles Anderson stated on its renewal application and the 100-percent assessment. The auditor testified that this assessment increased the reported Nebraska percentage to 100 percent. The assessment, however, left the other jurisdictions' percentages as Anderson initially reported, meaning the 100-percent assessment for Nebraska did not deny the other jurisdictions the amounts to which they were entitled. The issue is whether the DMV correctly concluded it could not determine an estimate of Anderson's true liability. Anderson claims that an estimate of its true liability can be determined and that therefore, the 100-percent assessment for Nebraska fees was not justified. Although Anderson did not keep the required mileage records, it offered payroll records to show the percentage of hours drivers worked in various jurisdictions. The records show that during the audit period, Anderson performed jobs in states other than Nebraska, including Iowa, Alabama, Kansas, Louisiana, Maryland, Missouri, and Tennessee. The records also purportedly show that, on average, 67 percent of the hours worked by Anderson drivers were in Nebraska, 15 percent were in Iowa, and another 19 percent were in other states. Anderson contends that these percentages provide a reasonable estimate of the percentage of miles driven in the respective jurisdictions because the employees spent their working hours driving. The DMV argues that Anderson's reliance on general labor records that bear no relation to mileage cannot be accepted because the IRP requires documents showing actual mileage. We agree with the DMV that the payroll records are insufficient to estimate mileage traveled. At one point in her testimony, Anderson's bookkeeper stated, I couldn't prove in any way, shape, or form, that they left that job site for any reason. They could have been sitting there all day long waiting for their truck to be filled up. This testimony shows no direct correlation exists between hours worked and miles driven because there is no guarantee that the drivers spend every working hour driving. The payroll records, without any mileage information, did not enable the DMV to estimate the percentage of distance traveled in each jurisdiction. Because an estimate of [Anderson's] true liability cannot be determined, the audit procedures manual allows for an assessment of 100-percent registration fees for Nebraska. [14] As with IFTA, Nebraska has a responsibility to protect the integrity of IRP by performing a complete and accurate audit. Section 100 of the audit manual recognizes the importance of this responsibility: 100.2 The purpose of auditing registrants under the [IRP] is to protect the integrity of the vehicle registration laws of all jurisdictions party to the IRP and to ensure equitable treatment of all registrants subject to the IRP.... [I]t is incumbent upon each jurisdiction to meet its obligations under the provisions of the IRP, i.e., proportional registration of commercial vehicles, by insuring proper documentation of carrier total distance operated, and official examination and verification of the appropriate records.... Nebraska cannot carry out its responsibility of conducting an accurate audit when a registrant fails to provide the required mileage records or other records from which the DMV can estimate the registrant's true liability. We conclude that without the mileage records, the DMV could not estimate Anderson's true liability. The DMV was therefore justified in imposing the 100-percent assessment against Anderson for its failure to maintain the proper records. The district court did not err in affirming the IRP deficiency determination.