Unified Motor Carrier Fee System:

Progress Made but Challenges to Implementing New System Remain

GAO-07-771R: Published: May 25, 2007. Publicly Released: May 25, 2007.

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The congressionally established unified carrier fee system was not implemented before its predecessor, the Single State Registration System, expired thereby preventing states from collecting fees from for-hire motor carriers and other related entities. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) mandated that a new unified carrier fee system replace the Single State Registration System, which expired on January 1, 2007. The Single State Registration System annually provided 38 states with about $100 million in total fees collected from for-hire interstate motor carriers. States used revenue collected from this system to supplement general funds and conduct safety-related services. Unlike the Single State Registration System, the new system broadened the base of those expected to pay fees to include exempt for-hire motor carriers, private motor carriers, brokers, freight forwarders, and leasing companies. To develop and administer this new fee system, Congress established a Board of Directors. This board is also tasked with administering a federal-interstate Unified Carrier Registration Agreement (UCRA), and issuing rules and regulations to govern this agreement. GAO was asked to examine the progress that the board and the Department of Transportation have made in implementing the unified carrier fee system and any implications resulting from the status of its implementation. Specifically, we undertook this study to (1) describe steps taken to implement the unified carrier fee system and the current status of implementation, (2) identify factors contributing to the delay in implementing the unified carrier fee system, and (3) identify any potential implications resulting from the delay in implementing the unified carrier fee system.

The Board of Directors and FMCSA have taken a number of steps to implement the unified carrier fee system; however, certain key steps remain incomplete and a specific date for implementation is not yet clear. The board drafted procedures to govern the collection and distribution of fees paid by all entities covered under the new system. In addition, the board identified a state, Texas, to administer a Web site for registering all motor carriers during the initial year of the unified carrier fee system, until individual states can develop their own systems in subsequent years. A number of key steps, however, have not been completed, and no timeline for finalizing these steps has been set. The board has not designated a depository to hold revenues generated by the unified carrier fee system and distributes those revenues to participating states. In addition, the board has not yet completed development of a registration Web site. Finally, the Secretary of Transportation has not set fees. he board reported its recommended fee structure to the Secretary of Transportation on December 6, 2006. The amount of time taken for start-up actions left insufficient time to implement the unified carrier fee system before the Single State Registration System expired. In addition, the amount of time required to publish the proposed fees and issue final rules could cause further delays. FMCSA officials told us it took time to identify potential board members and make sure there would be a balanced composition that complied with SAFETEA-LU requirements. The board and FMCSA took additional time to resolve two fee-related issues related to implementing the new fee system. SAFETEA-LU requires the Secretary of Transportation to obtain public comment before setting new registration fees. Under the Administrative Procedure Act, FMCSA would accomplish this by publishing a Notice of Proposed Rule Making, providing a period for allowing comments to the proposal, analyzing those comments, and adopting and publishing a final rule. Also, FMCSA officials told us that since the unified carrier fee system has an economic impact more than $100 million, the Office of Management and Budget (OMB) will have to review both the proposed and final rules. FMCSA officials acknowledge that it could be difficult to complete this procedure within the required 90 days. Some state officials told us that the delay in implementation has hindered their ability to acquire revenues, and thus regulate motor carriers and improve safety. Twenty-five of 28 states that responded to our survey indicated that a delay in implementing the unified carrier fee system hindered their ability to acquire revenues, and 22 states indicated that this was a great or very great hindrance. Since the Single State Registration System expired and no new system took its place, states that collected fees under Single State Registration System have not yet been able to collect these fees during 2007. If implementation of the unified carrier fee system is not completed by the end of 2007, FMCSA officials said it is unlikely that states could recoup fees not collected to date.

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