You asked for information on the Unified Carrier Registration Program (UCRP) including:

1. Whether it is a state or federal mandate,

2. How the fees for the program were determined, and

3. How do the fees compare to previous fees for registration of interstate motor carriers' operating authority?

SUMMARY

The UCRP is a program created by federal law in 2005 to replace another federal program called the Single State Registration System (SSRS). Under the prior program, interstate for-hire motor carriers registered their financial responsibility information in the states in which they operate. The UCRP differs from the prior program in several respects. The most significant of these are that (1) it applies to more entities than the previous program (which applied only to interstate for-hire carriers) and (2) the registration fees are graduated based on fleet size and not charged on a per vehicle basis. The UCRP includes private carriers, freight forwarders, brokers, and leasing companies; none of which were part of the prior program.

The federal law establishing the UCRP sets up a 15-member board with responsibility for recommending the fees to be charged by the states participating in the program. It required the board to set up a tiered fee structure with fees increasing by fleet size. The fee structure had to include at least four but not more than six steps. The fee structure also had to provide sufficient revenue so that all of the participating states would receive no less revenue than they were getting under the previous program.

The UCRP board recommended a six-tier fee structure with fees ranging from $ 39 for fleets of two or fewer vehicles to $ 37,500 for fleets of more than 1,000 vehicles. In Connecticut, entities subject to the new program had to register by November 15, 2007.

The UCRP fee is a single fee paid to the base state regardless of how many states in which the business operates. Under the prior SSRS, the base state collected each state's individual fee and was responsible for distributing its proportionate share. Thus, for most interstate for-hire carriers who were subject to the old system, fees are likely to be lower. But in some cases they could be higher. The factors that could determine whether a carrier pays more or less include (1) the number of states in which it operates, (2) the number of vehicles it has, and (3) whether it operates single unit vehicles or vehicle-trailer combinations. (Under the new program, trailers are counted in determining the size of a fleet and this could affect which bracket the business falls into. )

Some states may not realize the revenues from the UCRP during this first year of operation that they were getting from the prior system. Although Connecticut's revenue entitlement is approximately $ 3. 1 million under the UCRP regulations, it has only realized approximately $ 850,000 to date and the Department of Motor Vehicles program administrator estimates the final receipts may only be around $ 1 million.

UNIFIED CARRIER REGISTRATION PROGRAM

Congress created the UCRP in 2005 (Pub. L. 109-59, § 4305) to replace an existing federal program—the SSRS. The SSRS required an interstate for-hire motor carrier to choose a single participating state as its “base state” for purposes of registering its interstate operating authority. It also required the base state to collect fees on behalf of all the participating states in which the motor carrier operated. The SSRS replaced the previous cumbersome practice of an interstate carrier having to register separately in each state in which it traveled and carry evidence of this in each

vehicle. This took the form of what was known as “bingo stamps” which were individual stamps from each state that were displayed on a card carried in the vehicle.

Under SSRS, a carrier registered just once, in its base state, which usually was the state in which it maintained its principal place of business. The base state then took the responsibility of dispersing the fees it collected to the other member states in which the carrier operated.

Connecticut was one of the 38 states participating in the SSRS. It charged a fee of $ 10 for each of the carrier's vehicles.

Although the SSRS was an improvement over the previous bingo stamp system, the interstate for-hire carriers subject to registration had several complaints about it, particularly with respect to the cost of registering each truck separately and the burden of having to update its registration each time it added a vehicle to its fleet or operated in a new state.

Congress addressed this issue during its consideration of the multi-year transportation funding authorization legislation in 2005 (SAFETEA-LU). The UCRP is a compromise intended to address the for-hire carriers' desire to lower their registration costs while assuring states that they would not lose the revenue they were receiving under the SSRS. The legislation creating the UCRP repealed authority for the SSRS as of January 1, 2008.

To accomplish this purpose, the legislation created a 15-member Unified Carrier Registration Plan Board of Directors. Five of the members are Federal Motor Carrier Safety Administration administrators, five are selected from staff of state agencies responsible for overseeing the UCRP, and five come from the motor carrier industry (49 USC § 14504a). The legislation required the board to develop a graduated schedule of fees based on carrier fleet size. The revenue generated by the fee structure the board approves had to be approximately equal to the revenue the states were receiving under the SSRS (approximately $ 100 million).

To do this, the law broadened the base of entities subject to registration to include carriers not previously required to register. The SSRS applied only to interstate for-hire motor carriers. Instead, the UCRP includes, besides the interstate for-hire carriers, interstate private motor carriers, brokers, freight forwarders leasing companies, and exempt for-hire carriers.

The UCRP differs from the SSRS in that each carrier registers only once during the year. Carriers no longer have to revise their registration whenever they add vehicles to their fleet or expand operations into new territory. Changes to the carrier's fleet or operations are reflected in the next year's registration.

UCRP FEE STRUCTURE

How the Fee Structure was Determined

The UCRP board devised a six-tier registration fee structure for the program. Carriers subject to the program no longer pay for each vehicle they own. The number of vehicles they operate determines only which of the six brackets into which they fall. They also no longer pay based on the number of states in which they operate. Brokers, freight forwarders, and leasing companies that do not operate trucks of their own pay the lowest fee—$ 39. The total number of vehicles counted includes both trailers and power units.

The fee structure developed by the UCRP board is as follows:

Fleet of 0-2 vehicles $ 39

Fleet of 3-5 vehicles $ 116

Fleet of 6-20 vehicles $ 231

Fleet of 21-100 vehicles $ 806

Fleet of 101-1,000 vehicles $ 3,840

Fleet of more than 1,000 vehicles $ 37,500

When the UCRP board deliberated on the new fee structure, it considered several factors in determining the rates. The law requires that the fee structure include no fewer than four and no more than six fee brackets differentiated by fleet size. The law specifies that any state that participated in the SSRS in the last year of registration before enactment of the UCRP, and complies with the requirements for participation in the UCRP must receive a portion of the revenue generated by the new system that equals the revenue it received under the SSRS (49 USC § 14504a(g)).

To accomplish this, the UCRP board must determine each state's revenue entitlement; the target population of vehicles, fleets, and business entities subject to the registration requirements; and a fee structure capable of generating sufficient revenue to meet the “hold harmless” provisions of the law. The board also has the statutory authority to recommend annual modifications to the fee structure to address revenue shortfalls or excesses.

The fee structure noted above is the product of this process. The UCRP board determined that in 2004 (the target year for determining entitlements), the 38 states participating in the SSRS received just over $ 101 million in registration revenue. To this total it added another $ 500,000 to address Oregon's entry into the system and $ 5 million for administrative costs associated with the UCRP (a requirement of the law). Thus, the total revenue target for the new fee structure was approximately $ 106. 8 million. Connecticut's portion of this revenue entitlement was identified as $ 3,129,840.

In determining the target population for the fee structure, the board relied upon data in the Federal Motor Carrier Safety Administration's database. After attempting to control for carriers that were in the database that might no longer be in operation, it determined that the total number of active interstate carriers that would be subject to the new fee structure would be 350,698. To this it added a total of 14,575 freight forwarders and brokers it estimated were in active operation, for a total target population of 365,273 entities. It made a downward adjustment in this number to address a degree of uncertainty regarding the number of trailers operated by entities with the largest fleets and settled on a total number of carrier entities subject to the fee structure of 365,071.

The UCRP board then had to determine the actual fees. To establish a benchmark figure to compare possible UCRP fees to actual SSRS fees, it relied on a survey of the average fees currently paid under the SSRS by one power unit operators in several of the participating states. Based on the survey data from 10 of these states, it concluded that one power unit operators paid in the range of $ 70 per power unit in Idaho to $ 166 per power unit in Tennessee. Connecticut was not one of the surveyed states. However, it must be noted that these amounts represent multiple state registration fees that the base state redistributed to the other states in which the carrier operates.

These calculations led to a determination that, under the new system, the average fee per motor vehicle would be as follows:

Vehicles in Fleet Average Fee Per Vehicle

0 to 2 $ 26

3 to 5 $ 31

6 to 20 $ 23

21 to 100 $ 19

101 to 1,000 $ 15

1,001 to 106,771 $ 8

The mean fee for all carriers was calculated as $ 15 per vehicle. This information was provided in the Federal Motor Carrier Safety Administration's notice of proposed rulemaking in the Federal Register on May 29, 2007 (FR v. 72, no. 102, p. 29479).

Carriers and other businesses subject to the new registration system were required in Connecticut to register their operation no later than November 15, 2007.

Connecticut Fees

Whether an entity subject to registration under the UCRP pays higher or lower fees depends on its particular circumstances. The factors that are going to affect whether an entity pays more or less in registration fees are the number of vehicles the business has, the number of states it operates in, and whether it operates single unit vehicles or combination units.

Under the prior SSRS system, interstate for-hire motor carriers registering in Connecticut as their base state paid $ 10 for each of their power units, but did not pay a separate fee for trailers. They also had to pay to Connecticut the individual fees that all of the other states charged and Connecticut forwarded the money due to the other states to them. Most states had a similar $ 10 fee, but some charged less. Connecticut also similarly received from other states the money it was due for carriers registered elsewhere but operating in Connecticut as well.

The UCRP differs from this system in several ways. Under the UCRP, the carrier or business pays only one fee, not each state's individual fee. For many carriers, this could mean lower fees, but in some cases it could cost more. For example, a single vehicle owner-operator who was operating in five states, each of which charged $ 10 for registration, would have paid $ 50 under the SSRS. Connecticut would have kept its fee of $ 10 and sent the other fees to the respective states. Under the UCRP, this single vehicle owner-operator is paying only $ 39. However, if the owner operated in only three states, he was paying $ 30 under the SSRS and pays $ 39 under the UCRP.

Under the SSRS, carriers were charged only for power units. But under the UCRP, fleet size is determined by counting both power units and trailers. This could affect some businesses negatively in that they could wind up in a higher fee bracket if they are operating tractor-trailer units versus straight trucks. For example, a business operating two tractor-trailers in three states each charging $ 10 per vehicle under the SSRS was paying $ 60 in registration fees. But under the UCRP, the two power units and two trailers are counted as a fleet of four vehicles and the fee for a four-vehicle fleet is $ 116. This could, however, be an advantage if the carrier operates in six or more states.

There also appears to be some economies of scale built into the fee structure that could benefit larger fleets. For example, the owner of a fleet of 100 vehicles was paying $ 1,000 ($ 10 per vehicle) to Connecticut to register its vehicles here, but also could have been paying a similar amount to every other state where it operated. Under the UCRP, this fleet owner is only paying $ 806 regardless of how many states it operates in.

However, under the UCRP, private carriers, freight forwarders, brokers, exempt carriers, and leasing companies are all paying fees they never had to pay before because they were not required to register under the SSRS.

Unlike the SSRS, where Connecticut kept its portion of the registration fee and had to collect other states' fees and send them their proportionate share, the fee collected under the UCRP stays with the base state. Each UCRP state keeps the fees it collects up to its entitlement amount (in Connecticut's case—approximately $ 3. 1 million). If a state collects more than its entitlement, it has to send this excess into a central fund from which states that do not receive their entire entitlement can be compensated. However, according to David Ostafin, who administers the UCRP for the Department of Motor Vehicles, the program appears to be generating significantly less revenue nationally than was projected when the fee structure was determined by the UCRP board. He stated that Connecticut has only collected about $ 850,000 under the new program and, when all registrations are finalized, will probably get no more than $ 1 million. Initial indications are that nationally, only about half of the approximately $ 100 million in revenue projected for the program may be realized. Ostafin felt that the fee structure may have been set too low based on data in the federal motor carrier database that may still include a significant number of carriers that are no longer in operation.

JF: dw