Regulatory Evaluation Prepared for the Unified Carrier Registration Final Rule, March 2010

REGULATORY EVALUATION OF THE FEES FOR THE
UNIFIED CARRIER REGISTRATION PLAN
February 19, 2010
1.

INTRODUCTION

This report evaluates the schedule of fees set by the Federal Motor Carrier Safety Administration
(FMCSA) for the Unified Carrier Registration (UCR) Plan and Agreement. An important
component of this evaluation was a review of the analysis conducted by the Board of Directors
of the UCR Plan (“Board”) in developing its recommendation for annual fees and fee brackets
under the UCR Agreement. As the FMCSA found that the fee structure recommended by the
Board was inadequate in meeting the statutory requirements, the report compares the fee
structure set by FMCSA and that recommended by the Board and points out the latter’s
deficiencies. The report, in turn, explains FMCSA’s decision to set a different fee structure and
its improvements upon the Board’s recommendation. The report also considers such factors as
revenue generation, administrative costs, progressivity, and impacts on small entities.
1.1

Background

The UCR Agreement is 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, 119 Stat. 1144,
1764 (2005) (SAFETEA-LU). The UCR Plan is “an organization … responsible for developing,
implementing, and administering the unified carrier registration agreement” [49
U.S.C. 14504a(a)(9)]. The UCR Agreement is “an interstate agreement governing the collection
and distribution of registration and financial responsibility information provided and fees paid by
motor carriers, private motor carriers, brokers, freight forwarders and leasing companies….” [49
U.S.C. 14504a(a)(8)].
Congress also repealed the statutory provisions of 49 U.S.C. 14504 governing the single state
registration system (SSRS) [SAFETEA-LU sec. 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the purpose of the UCR Plan and Agreement is both to “replace the existing outdated system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].
The statute provides for a 15-member Board of Directors for the UCR Plan and Agreement who
are to be appointed by the Secretary of Transportation. The establishment of this Board was
announced in the Federal Register (FR) on May 12, 2006 (71 FR 27777). One of the activities
and functions specified in the statute for implementing the new UCR Agreement is to set the fees
to be paid by the various transportation providers covered by the statute. This process involves
submission of a recommendation for the initial annual fees to the Secretary of Transportation 3 by
1

This repeal became effective on January 1, 2008, in accordance with section 4305(a) of SAFETEA-LU and
section 1537(c), Pub. L. 110-53, 121 Stat. 467 (Aug. 3, 2007).
2
The Senate bill’s provisions were enacted “with modifications” [H. Conf. Rep. No. 109-203, at 1020
(2005)].
3
The Secretary’s functions under sec. 14504a have been delegated to the Administrator of FMCSA [49 CFR
1.73(a)(7), as amended, 71 FR 30833 (May 31, 2006)].

the UCR Plan’s Board of Directors. The FMCSA then is directed to set the fees within 90 days
after receiving the Board’s recommendation and after notice with an opportunity for public
comment [sec. 14504a(d)(7)(B)]. Subsequent adjustment to the fees and fee brackets must be
adopted following the same procedure of recommendation by the Board and review and adoption
by FMCSA after notice and an opportunity for public comment.
The statute specifies several relevant factors that must be considered by the Board and FMCSA
in setting the fees (see 49 U.S.C. 14504a(d)(7)(A), (f)(1) and (g)). It specifies that fees are to be
determined by FMCSA based upon the recommendation of the Board. The statute specifies that
in making its recommendation for the level of fees to be assessed in any agreement year, and in
setting the fee level, both the Board and FMCSA are to consider the following factors:
(1)

Administrative costs associated with the UCR Plan and Agreement.

(2)
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.
(3)
Provisions governing fees established in 49 U.S.C. 14504a(f)(1) which states that the fees
charged must satisfy the following criteria:
a.

Fees charged to a motor carrier, private motor carrier, or freight forwarder shall
be based on the number of commercial motor vehicles owned or operated by the
motor carrier, private motor carrier, or freight forwarder. 4

b.

Fees charged to a broker or leasing company in connection with the filing of proof
of financial responsibility under the UCR Agreement shall be equal to the
smallest fee charged to a motor carrier, private motor carrier, and freight
forwarder or equal to the smallest fee charged under the UCR Agreement.

c.

The Board shall develop no more than six and no less than four brackets of
carriers (including private motor carriers) based on the size of the fleet, i.e. the
number of commercial motor vehicles owned or operated.

d.

The fee scale is required to be progressive in the amount of the fee.

e.

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).

4

The statute initially defined “commercial motor vehicles” for this purpose as including both self-propelled and
towed vehicles (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, § 701(d)(1)(A) of Pub. L. 110-432, Div. A,, 122 Stat. 4848, 4906
(Oct. 16, 2008), amended the definition of “commercial motor vehicle” for the purpose of setting UCR fees for years
beginning after December 31, 2009, to mean a “self-propelled vehicle described in section 31101.”

2

As indicated, section 14505a(d)(7) requires that the fees achieve the revenue levels set by the
Board. Section 14504a(g) pertains to the requirement for the revenues to be derived under the
UCR Agreement and hence affects the size and allocation of the fees. It provides that a State that
participated in the 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. 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 under the UCR Agreement equivalent to the
amount received of this type in the 2004 registration year. States which did not participate in
SSRS in 2004, but which choose to participate in the UCR Plan, are to receive revenues not to
exceed $500,000 per year.
1.2

Types of Affected Entities

The entities affected by the UCR Agreement include for-hire motor carriers (both those subject
to and those exempt from economic regulation by FMCSA), private motor carriers, brokers,
freight forwarders, and leasing companies. Definitions of these categories are found in title 49 of
the United States Code as follows:

Category
Motor Carrier
Private Motor Carrier
Freight Forwarder

Brokers
Leasing Company
1.3

Definition in 49 U.S.C.
13102(14) and
14504a(a)(5)
13102(15)
13102(8) [Freight
forwarders that operate
motor vehicles are treated
as motor carriers 13903(b) and 14504a(b)]
13102(2)
14504a(a)(4)

UCR Agreement History

On May 29, 2007, (72 FR 29472), FMCSA published a proposed rule in the Federal Register that
proposed annual fees and a fee bracket structure for the Unified Carrier Registration Agreement.
After receiving and evaluating public comments on the proposed annual fees and bracket
structure, FMCSA published a final rule on August 24, 2007, (72 FR 48585) that established fees
and a fee bracket structure for calendar year 2007.
On February 26, 2008, (73 FR 10157) FMCSA published correcting amendments to the final rule
of August 24, 2007, clarifying that the fees and bracket structure established in the 2007 rule
were established for each registration year unless and until the Board recommended an
adjustment to the annual fees and the Board and FMCSA approved a new set of fees and fee
brackets. The fees and brackets established for the 2007 calendar year therefore remained
effective for 2008 and 2009.

3

On April 3, 2009, the Board submitted a recommended fee and bracket structure to the Secretary.
After receiving requests from FMCSA for clarification on several points, the Board voted on two
new options for fee structures, but was unable to reach consensus on either option. 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 Agency conducted an independent analysis of the UCR Plan formal recommendation, as
well as alternative fee proposals considered by the Revenue and Fee Subcommittee of the UCR
Board. FMCSA concluded that it could not base its own fee determination on the Board’s
recommendation, and conducted an independent analysis of two issues in particular: 1) “bracket
shifting,” i.e., motor carriers registering in a fee bracket that is different from that 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. Based on its
independent analysis, FMCSA published a Notice of Proposed Rulemaking (NPRM) on
September 3, 2009 (74 FR 45583) containing its own fee proposal. The 2010 fees that were
proposed by FMCSA at that time are presented in Table 1.
Table 1: Fees Under The Unified Carrier Registration Plan And Agreement
Proposed For Registration Year 2010
Number of commercial motor vehicles owned or operated by
exempt or non-exempt motor carrier, motor private carrier, or Fee per
Bracket
freight forwarder
entity
B1

0–2, (as well as brokers and leasing companies)

$

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

FMCSA received over 150 comments on the proposed rule from a wide variety of commenters.
Sixteen State agencies and two State associations commented. Almost all of the State agencies
and associations supported the fee proposal. Comments were received from 114 industry
members, many of whom registered opposition to the proposed fees. In addition, 22 industry
associations submitted detailed comments on the proposal. In general, they also opposed the fees
proposed by FMCSA. After considering the comments, FMCSA has decided to change the way
the fees are calculated in several ways. The effect of these changes is to lower the fees by about
12 percent on average. These changes result in fees that are lower than the fees shown in Table
1. The remainder of this regulatory evaluation describes the development of the revised fees.

4

1.4

Carrier Population and Collection of Fees

The prospect for over-or under-collection of revenue from the UCR Agreement fee structure is
dependent on the accuracy of the estimated population and the fleet size distribution of entities
affected by the UCR Agreement that are required to pay the fees. Underestimation of the carrier
population will lead to higher fees being imposed while overestimation will lead to the collection
of inadequate revenue.
The effects of over-and under-collection are not symmetrical. The consequences of overcollection are that States would receive the revenues to which they are entitled, with excess
revenues being held in reserve and used to distribute to States that have not met their revenue
entitlement and to finance fee reductions in the following year. Under-collection, on the other
hand, would result in a permanent loss of a portion of the revenues to which the States were
entitled. Thus, the distributional consequences of overstating the number of fee-paying entities in
the population and under-collecting revenues are more serious than the alternative.
1.5 Organization
This report is divided into six sections in addition to this introduction. The second section
discusses the Board’s fee recommendation. The third section presents the results of FMCSA’s
analysis of the fee structure recommended by the Board. The fourth section discusses the fee
structure set by FMCSA along with the approach implemented by FMCSA to derive its fee
structure. The fifth section is a brief discussion of the impacts the recommended fee structure
will have on small entities. The final section is the summary evaluation of the fee structure set by
the FMCSA.
2. UCR BOARD FEE RECOMMENDATION
This section describes the fee structure recommended by the Board along with the data sources
and the methodology employed in developing the recommended fee structure. The complete
recommendation transmitted to FMCSA by the Board on April 3, 2009 is publicly available in
the Docket Management System of the Department of Transportation.
2.1 Carrier Population and Distribution
The Board’s recommendation for fees for 2010 is based on an approach to determining the
carrier populations different from the approach used to establish the fees in effect for 2007
through 2009. In 2007, the Board’s premise was that revenues would be generated from all
motor carrier entities involved in interstate commerce.
In 2007, to estimate the number of carriers subject to the UCR Agreement, the Board sought an
approach that would provide a number of carriers for which active status could be estimated to
allow for a conservative universe of interstate carriers. The Motor Carrier Management
Information System (MCMIS) and the License and Insurance System (L&I) maintained by
FMCSA house information about the known universe of the motor carrier industry (in MCMIS)
and brokers and freight forwarders (in L&I). Carriers that operate commercial motor vehicles in

5

interstate commerce are required to register with FMCSA by providing carrier census data and
acquiring a USDOT number. The carrier census data resides in MCMIS, and similar information
on brokers and freight forwarders is in the L&I System. The States have access to data derived
from MCMIS through the SafetyNet system. To determine an estimate of the active population
of motor carriers for the 2007 fees the Board used the SafetyNet system maintained by the State
of New York to identify carriers. The Board filtered data from the SafetyNet database to exclude
carriers that had not updated their MCS-150 census file 5, had no inspection, crash, safety audit,
or compliance review recorded within the past 12 months (March 1, 2006, through February 26,
2007). Applying the filters to approximately 730,000 carriers listed in the database, the Board
filtered out almost 380,000 carriers, leaving an estimated total number of active interstate
carriers of 350,698 (considering both power units and trailers). The Board then considered
freight forwarders and brokers. The total number of these entities listed in the Licensing and
Insurance (L&I) System, as provided by FMCSA, was approximately 19,000. Freight forwarders
that also operate commercial motor vehicles were excluded to avoid double counting, because
they are already included in SafetyNet. After excluding the entities with a USDOT number in the
L&I System, the Board estimated the total number of freight forwarders and brokers as 14,575.
Summing the 350,698 active interstate carriers and 14,575 freight forwarders and brokers, the
Board arrived at a total affected population of 365,273.
In making its fee recommendation for 2010, the Board took into account two factors that had
changed from 2007. First, Congress in 2008 in Public Law 110-432 specified that the definition
of “commercial motor vehicle” was amended by deleting towed units (e.g. trailers) for purposes
of determining fleet size for years beginning after December 31, 2009. Thus, 2010 fees must be
based on the number of power units owned or operated by a motor carrier rather than on the
number of power units and trailers. Second, the Board now has information, based on the
experience gained in administration of the UCR between 2007 and 2009, about the number of
motor carriers actually registering and paying fees. The approach selected by the Board for
establishing the 2010 fees reflects the experience that not all carriers in the MCMIS database
registered for UCR. The Board therefore adopted a fee-setting approach that adjusts the estimate
of the carrier population, considering only power units, to reflect the percentage of carriers in
each bracket that registered in 2008.
To establish its carrier population estimate for 2010, the Board began with the MCMIS database
for February 4, 2009, and applied a filtering approach consisting of the following parameters:
active carrier or broker, and, within the last 15 months, had an inspection, reportable crash, a
MCS-150 update 6, or UCR registration —to ensure the carriers had some recent activity. For
2010, the Board also added whether the carrier had registered under UCR to the set of filters.
Information about active brokers and freight forwarders was obtained as before from the
Licensing and Insurance database as of September 10, 2008 and filtered to avoid double
counting. This process yielded an estimate for 2010 of the full universe of carriers, brokers and
freight forwarders of 433,535.

5

Pursuant to § 390.19 Motor carrier identification report, a motor carrier must file its update of the MC-150 form
every 24 months.
6
Ibid.

6

The Board then adjusted the estimated full universe by the percentage of entities that had
actually registered in each of the six brackets, compared to the number of entities that the Board
had determined were potential registrants in each bracket. This approach yielded a total
estimated population of 260,466 carriers, brokers and freight forwarders, as illustrated by the
following table, which contains the information in Figures 13 and 14 from the Boards
recommendation and provides the percentages used by the Board to adjust its population
estimates.
Table 2: Summary of Board Population Estimate for 2010

Bracket

1
1
2
3
4
5
6
Totals

Fleet Size
Brokers &
Forwarders
0-1
2-5
6-20
21-100
101-1,000
1,001 -More

2008
Full
Universe
(A)

2008
Registered
(B)

2008
%
Registered
(C)=B/A

2010 Full
Universe
(D)

2010
Population
(E)=D x C

16,457

2,630

16.0%

16,457

2,630

202,415
89,773
85,015
30,716
8,118
785
433,279

116,163
56,489
57,946
23,566
6,800
690
264,284

57.4%
62.9%
68.2%
76.7%
83.8%
87.9%

194,425
145,266
65,155
17,350
3,590
292
433,535

111,578
91,408
38,275
13,311
3,007
257
260,466

The Board contended, in adopting this approach, that it was unreasonable to expect the States to
register and collect fees from all potential registrants. The Board also believed that the approach
it was adopting increased the likelihood of collecting the target revenues, although the approach
was potentially vulnerable to under-collection if carriers registered in brackets different from
those that they would be expected to belong to, based on MCMIS data. The Board recognized
that the approach benefited potential registrants who had been and continued to be noncompliant.
2.2 Revenue Target
The Board’s revenue target for 2010 is $113,340,945, which is composed of $107,777,060 for
State revenue entitlement, an estimated $5,000,000 for administrative expenses, and $563,885
for what the Board termed a revenue reserve. These components of the revenue target are
discussed in detail below.

7

2.2.1 State Revenue Entitlement
To develop a nationwide figure for the replacement revenues needed under the UCR Agreement,
the Board asked those States that either had participated in SSRS or had intrastate registration
revenues allowed to be included to provide information on the revenues they received for the
registration year 2004. This is the year specified in the statute for establishing the amount of
revenues they were entitled to receive under the UCR Agreement. In their responses, the States
that agreed to participate under the UCR Agreement certified their revenue figures for 2004. The
total certified State revenue figure for UCR for 2008 and subsequent years is $106,777,059.81,
as shown in Table 3.
SAFETEA-LU caps the maximum revenue figure for UCR States that did not participate in
SSRS at $500,000 per year (49 U.S.C.14504a (g)(3)). Because two non-SSRS States have agreed
to participate in the UCR for registration year 2010 (Alaska and Delaware), the Board added
$1,000,000 to the total entitlement figure, bringing the total State revenue requirement for 2010
under the UCR to $107,777,060.

8

Table 3: Revenue Requirement as Calculated by UCR Board Based on Total Revenue
Received in Calendar Year 2004 plus Administration Expenses and Revenue Reserve
State

CY 2004
SSRS
Revenue

2,933,718.00
Alabama
1,817,360.00
Arkansas
1,220,909.00
California
1,783,985.00
Colorado
3,129,840.00
Connecticut
2,581,560.00
Georgia
547,696.68
Idaho
3,083,064.00
Illinois
2,264,863.00
Indiana
432,042.00
Iowa
3,948,680.00
Kansas
5,348,980.00
Kentucky
3,982,770.00
Louisiana
1,550,096.00
Maine
2,053,714.00
Massachusetts
2,631,247.00
Michigan
1,061,103.30
Minnesota
2,323,370.00
Missouri
4,322,100.00
Mississippi
1,049,063.00
Montana
635,970.00
Nebraska
2,273,299.00
New Hampshire
3,292,233.00
New Mexico
4,414,538.00
New York
350,438.00
North Carolina
2,010,434.00
North Dakota
2,675,367.74
Ohio
2,122,052.00
Oklahoma
Pennsylvania
2,144,217.00
Rhode Island
2,411,345.00
South Carolina
805,167.00
South Dakota
4,734,977.00
Tennessee
2,132,501.06
Texas
1,861,454.00
Utah
4,852,865.00
Virginia
2,428,900.00
Washington
1,374,796.00
West Virginia
2,196,680.00
Wisconsin
90,783,394.78
Total
Alaska
Delaware
Sub-Total
Administrative Expenses
Sub-Total
Reserve (.005)
Entitlement

Exempt
Registrations
6,246.00

Renewable
Interstate
For-Hire
Operating
Intrastate
0.00

Renewable
Interstate
Private
Operating
Intrastate
0.00

Broker
Registrations
0.00

Single
Trip
Interstate
0.00

Total
Recorded
Revenue
$2,939,964.00
$1,817,360.00

910,801.00
17,630.00
0.00

$2,131,710.00
0.00

0.00

0.00

0.00
0.00

0.00
0.00

78,500.00

$3,129,840.00
$2,660,060.00

0.00

0.00

58,264.00

373,940.00

0.00

0.00

0.00

1,725.00

$547,696.68
$3,516,993.00

0.00

100,016.00

42,700.00

0.00

14,290.00

0.00

381,320.00

0.00

0.00

$2,364,879.00

0.00

0.00

0.00

0.00

$474,742.00

17,000.00
81,066.00

$1,801,615.00

$4,344,290.00
$5,365,980.00

5,576.00

$4,063,836.00
$1,555,672.00

0.00

$2,282,887.00

2,550.00

226,623.00

9,710.00

4,879,760.00

18,354,00

57,675.00

$1,137,132.30

11,810.00

6,820.00

$2,342,000.00

0.00

0.00

$7,520,717.00

$4,322,100.00
$1,049,063.00
106,004.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

5,580.00

2,132,930.00

4,977.00

330,767.00

1.00

4,945,526.00

1,769.00

139,500.00

0.00

0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00

0.00

0.00

0.00

0.00

0.00

0.00

21,569.00

$3,292,233.00
$4,414,538.00
$372,007.00
$2,010,434.00
$4,813,877.74
$2,457,796.00
$4,945,527.00

0.00

0.00

0.00

8,775.00
14,816.00

$741,974.00
$2,273,299.00

$2,285,486.00
$2,420,120.00

0.00

0.00

0.00

35,640.00

24,352.00

$855,623.00
$4,759,329.00

0.00

586,127.00

0.00

0.00

0.00

236,954.00

0.00
0.00

0.00
0.00

$2,718,628.06
$2,098,408.00
$4,852,865.00

38,471.00

0.00

0.00

600.00

0.00

56,931.03

$2,467,971.00
$1,431,727.03
$2,196,680.00

590,010.00

14,747,416.03

618,274.00

2,325.00

35,640.00

$106,777,059,.81
$500,000.00
$500,000.00
$107,777,060.00
$5,000,000
$112,777,060
$563,885
$113,340,945

9

2.2.2 Administrative Costs
Under section 14504a(d)(7) of the statute, the costs incurred by the Board to administer the UCR
Agreement are eligible for inclusion in the total revenue to be collected. The Board estimated
$5,000,000 for administrative expenses for 2010.
2.2.3

Revenue Reserve

To offset the risk of under-collection of revenue, the Board envisioned creating a revenue reserve
by raising its target by ½ of one percent of the State revenue entitlement and administrative
expenses.

2.3 Brackets and Allocation of Motor Vehicles
As Table 1 illustrates, the Board recommended the same number of brackets in 2010 that it had
recommended in 2007. In establishing the number and composition of the brackets, under the
statute the Board had the option of choosing among four, five, or six brackets for the distribution
of the entities it determined would be expected to pay the fee. The Board decided to use the
maximum allowable number of brackets, thereby helping to reduce the range of sizes within
individual brackets.
The Board maintained this approach in establishing its bracket recommendation for 2010.
However, for its 2010 fee recommendation, as illustrated above in Table 1, the first bracket
includes only one CMV, recognizing the large fraction of very small carriers. The Board’s
selection of one CMV rather than two as the top of the first bracket is a revision from the bracket
structure used in 2007 through 2009; this change was made to reflect the elimination of towed
units (trailers). Similarly, the second bracket was changed from 3-5 to 2-5. The Board retained
brackets 3 through 6 as they had been established in 2007.
2.4 Selection of Fees for the Brackets
As discussed above, the Board’s target revenue figure with administrative costs for 2010 was
$113,340,945. To determine how to allocate that sum among the six brackets, the Board relied
upon the same interactive model used for 2007 that calculated the number of entities in each
bracket; the revenues generated by each bracket at different fee amounts; total revenues; and any
surplus or deficit from the $113,340,945 target figure. The Board also considered fairness in
terms of fees per motor vehicle while assigning the fees for each bracket. The Board followed
the approach it had adopted for the 2007 fees of making sure that the maximum fee per
commercial motor vehicle in a given bracket would be no higher than the maximum fee per
commercial motor vehicle in the next smaller bracket.
2.5 Recommended Fee Structure
Using the model and the method outlined above, the Board developed the recommended fee
structure (Table 4). The fees recommended by the Board range from a low of $83 for carriers in

10

the lowest bracket (0 to 1 CMVs) to a high of $82,983 (the 1,001-or-greater CMVs bracket). The
Board estimated that this fee structure would generate $113,338,310 in revenues, slightly below
the target figure (with a projected deficit of $2,635) for the UCR registration year 2010.
Table 4: Recommended Bracket and Fee Structure
Bracket
B1
B2
B3
B4
B5
B6
Total

Motor Vehicles
From
To
0
1
2
5
6
20
21
100
101
1,000
1,001
More

Entities
114,208
91,408
38,275
13,311
3,007
257
260,466

Fee per
Entity
$83
$166
$497
$1,741
$8,373
$82,983
Target
(Deficit)*

Revenue
$9,467,843
$15,155,446
$19,037,985
$23,173,120
$25,177,310
$21,326,605
$113,338,310
$113,340,945
($2,635)

* A deficit arises when rounding is not applied to the fees, otherwise the total revenue equals $113,354,360, which
leads to a surplus of $13,415.

3.

EVALUATION OF THE RECOMMENDED FEE BY FMCSA

Section 14504a requires FMCSA and the Board to consider the relevant statutory factors laid out
in detail above in the Background section. That statute also requires FMCSA to consider the
recommendation of the UCR Board and the same statutory requirements in setting the UCR fees.
FMCSA carefully examined the Board’s entire fee recommendation, including the methodology
and specific findings of the Board. FMCSA also independently considered the factors specified
in SAFETEA-LU, and reviewed and evaluated the data and analysis provided by the Board in its
fee recommendation. Evaluation of each component of the statutory requirement is discussed in
detail below.
3.1 Participating Jurisdictions
States chose to participate in the UCR Plan and Agreement for 2010 by submitting the State plan
that complied with section 14504a(e) before the final deadline of August 10, 2008 for
participation. Forty-one States chose to participate in the UCR Plan and Agreement for
registration year 2010.
3.2 Certification of State Revenues
The Board’s calculation of the total revenue to be collected under the UCR was properly based
upon the revenues collected by the participating States (both under SSRS and for intrastate
registrations of interstate carriers) for the calendar year 2004. As shown in Table 3, it can be
seen that the Board included the revenue collected by the States that participated in the SSRS, as
well as those participating in the UCR Agreement that were not participants in SSRS. FMCSA
has verified that the Board has accurately reflected in its recommendations the revenue

11

entitlements certified by each participating State for 2010. In accordance with 49 U.S.C.
14504a(g)(4), FMCSA will approve the amount of revenue under the UCR Agreement which
each State participating in 2010 is entitled, as specified in Table 3 above.
3.3 Revenue Target
The Board’s calculation of the revenue target to be collected under the UCR was based on the
revenues collected by the participating States for the calendar year 2004, plus $500,000 for each
non-SSRS State as required by the statute, plus administrative costs.
The Board’s addition of a revenue reserve, equal to one-half of one percent of the State revenue
entitlement and administrative costs, was intended in 2007 to offset the risk of faulty data,
especially on trailers. After considering comments on the rule, FMCSA has decided to remove
the revenue reserve component from the fee calculations in the final rule. As a result of
experience gained by the Board over three years of administering the fees, as well as the
elimination of trailers from the definition of CMVs, FMCSA believes that the initial
uncertainties prompting inclusion of a revenue reserve have diminished. As a result, the Plan
should face less uncertainty, negating the need for the revenue reserve. The elimination of the
reserve reduces the revenue requirement by one-half of one percent. This change necessitates a
downward revision of the fees. This is one of the small changes in how the fees are calculated
alluded to in Section 1.3.
3.4 Administrative Costs
In 2007 the Board provided an estimate of the administrative costs associated with the unified
carrier registration plan and agreement, as required by section 14504a (d)(7)(A)(i)). The Board’s
2010 fee recommendation included the same amount of administrative costs; absent any
additional information on actual administrative costs, FMCSA finds it reasonable to assume that
the Board’s earlier estimate was accurate.
3.5 Number of Fee Brackets
The Board’s recommendation satisfied the requirements of section 14504a (f)(1)(C) by
specifying no fewer than four and no more than six brackets of carriers based on the size of the
fleet.
3.6 Fee Levels for Each Bracket
FMCSA found that the Board recommended a fee scale that is progressive in the amount of the
fee, as required by section 14504a (f)(1)(D), when assessed from bracket to bracket. There are
six brackets, each one defined by carrier size in terms of the numbers of CMVs. The fees per
carrier clearly increase as the size of the carriers in the brackets increases, thereby meeting the
Board’s understanding of a fee scale that is progressive. The fee levels for brokers and leasing
companies are based on the smallest fee charged under the UCR agreement, as specified by
section 14504a (f)(1)(A)(ii).

12

3.7 Carrier Population
FMCSA carefully reviewed the method the Board used to make the estimates of the carrier
population likely to register in each bracket and pay UCR fees in 2010. This review revealed
two major shortcomings: the Board assumed (1) that the total size of the population would be no
greater than the number of carriers that registered in 2008 without any recognition of whether the
enforcement and compliance efforts by the States were adequate; and (2) that carriers would use
their fleet sizes as recorded in MCMIS to determine their brackets, and hence the fees they
would pay. The effects of these assumptions, and the reasons the FMCSA found them to be
unacceptable, are described below.
3.7.1

Selection of the Set of UCR-Registered Entities Only

FMCSA believes that selection of only UCR-registered entities, rather than the full universe of
active entities, as a basis for population estimates underestimates the actual active population.
FMCSA bases its best estimate of the active population covered by the UCR rule on population
shown in its MCMIS database, filtered to exclude carriers that (1) are intrastate only; (2) are
shown to have inactive status; or (3) show no signs of recent activity – such as crashes,
inspections, MCS-150 updates, or UCR registration. After applying these filters, FMCSA finds
that MCMIS contains 416,822 carriers; adding 16,457 brokers and freight forwarders shown in
the L&I database yields a total affected population of 433,279 entities. The Board assumed,
implicitly, that this population would change only slightly for 2010, rising to a total 433,535,
when the fee will be collected; FMCSA considers that a reasonable presumption given the
current state of the economy and the uncertainty that exists over when growth will resume.
The number of entities registering, however, was assumed to total only about 260,000, or about
62 percent of the population. If compliance with the UCR registration and fee requirements
could be improved, the fees for the individual brackets could be reduced. Compliance rates to
date, though increasing, have remained low, which suggests that the safest assumption would be
that compliance rates will not increase for 2010. FMCSA believes, however, that setting fees on
this basis would not give States the incentive to take steps to improve compliance, and would
leave an inequitably high burden on those carriers that comply. FMCSA believes that, though no
realistic level of enforcement would lead to 100 percent compliance, increased enforcement
effort on the part of the participating states will be able to increase compliance rates to a
significant degree. This belief is supported by an analysis conducted by FMCSA of the
relationship of compliance rates to a simple measure of enforcement effort by the participating
states.
3.7.2

Assumption that carriers would register in the brackets indicated by the size data in
MCMIS

The UCR fees proposed by the Board were developed using the assumption that motor carriers
subject to the registration requirements will determine the fee to be paid on the basis of the
number of vehicles (fleet size) reported in the motor carrier identification report (Form MCS150) required to be filed with FMCSA (and updated at least biennially) by 49 CFR 390.19. On
that report, motor carriers are required to report separately the number of self-propelled vehicles

13

(i.e., power units) of various types and the number of towed vehicles (i.e., trailers), if any, that
are owned or leased by the carrier, and then total “the number of each type of CMV that it uses
in its U.S. operations.” See instructions for item 26, Form MCS-150 at
http://www.fmcsa.dot.gov/documents/forms/r-l/MCS-150-Instructions-and-Form.pdf. That
information is compiled by FMCSA into its Motor Carrier Management Information System
(MCMIS) database. The data, including the number of self-propelled and towed CMVs operated
by motor carriers, was and is made available to the UCR Plan to enable it to develop its fees and
fee structure. The fees for the registration years 2007, 2008 and 2009 were developed by the
UCR Plan on the assumption that each motor carrier that registered would pay a fee according to
the bracket that is indicated by the number of vehicles owned and operated (both self-propelled
and towed) reported in the MCMIS database. For 2010, because of the change in the applicable
definition for CMV, the fleet sizes and applicable fees will be determined by the number of selfpropelled CMVs.
Three years of experience with actual registrations with the UCR Plan, however, has shown that
a significant proportion of motor carriers are paying fees on the basis of fleet sizes that are
different than would be expected on the basis of the fleet sizes reported to FMCSA. Such shifts
in fee brackets by registering motor carriers can be entirely appropriate under the statute, which
has several different provisions that would allow them. The statute first states that the fees
charged to a registering motor carrier or freight forwarder “shall be based on the number of
commercial motor vehicles owned or operated ….” 49 U.S.C. 14504a(f)(1)(A)(i). A CMV is
“owned or operated” by the motor carrier or forwarder if, during the registration year, it is either
registered under Federal or State law (or both) or controlled under a “long term lease.” The UCR
Plan has determined that a lease of a CMV must be for more than 30 days to be considered a
long term lease. See http://www.ucr.in.gov/MCS/2009%20UCR%20Instruction%20Sheet.doc.
However, FMCSA requires that all leased vehicles be reported on the MCS-150.
Next, a registering motor carrier or forwarder has the option of basing the number of CMVs
owned or operated on either (1) the number reported on its most recently filed MCS-150; or (2)
the total number owned or operated for the 12-month period ending on June 30 of the year
preceding the registration year. 49 U.S.C. 14504a(f)(3). This number is determined for either
option after excluding leased vehicles that are under lease terms of 30 days or less.
http://www.ucr.in.gov/MCS/2009%20UCR%20Instruction%20Sheet.doc. A motor carrier may
include in its calculation of fleet size “any commercial motor vehicle”; motor carriers and private
motor carriers may elect not to include any CMV used “exclusively in the intrastate
transportation of property, waste, or recyclable material.” 49 U.S.C. 14504a(f)(3). Because it can
be legitimate for carriers to register in a bracket different from the one that the data in MCMIS
would indicate means that bracket shift cannot be eliminated through tighter enforcement or
auditing.
Tables 5 and 6 below reflect an analysis that shows the fee brackets that motor carriers selected
when registering under the UCR Plan for registration year 2008, and compares the brackets
selected to the brackets in which the carriers would have registered if the fleet size used was
derived from the MCMIS database (and the MCS-150 reports submitted by the carriers).

14

A review of Tables 5 and 6 shows the impact of the registering carriers’ bracket shifts on the
revenue obtained by the UCR Plan. For example, of the 261,293 total number of carriers
registered in 2008 (as of the date of the MCMIS run), 116,103 carriers appeared to have fleet
sizes from the MCMIS data that indicated that they should have registered in the lowest UCR fee
bracket. However, almost 9,000 carriers registered in a higher bracket, for a net revenue gain to
the UCR plan of almost $1 million. On the other hand, more than 26,000 carriers registered in
the lowest bracket, although the MCMIS data indicated that they should be registered in a
bracket with a higher fee. The result was a revenue yield that was over $6.1 million less than
expected. Similar patterns appear in the other brackets – some carriers are registering in higher
brackets than expected, but significant numbers of carriers registered in lower brackets. For
registration year 2008, as Table 6 shows, the net shrinkage in the expected revenue caused by
bracket shifting is $23,857,920 – just over 25 percent of the total revenue that would have been
collected if the carriers had all registered in the brackets that the data in MCMIS indicated that
they would. This amount is a substantial portion of the total revenue shortfall of $38 million
experienced by the UCR Plan for registration year 2008. Similar shortfalls in 2007 and 2009 are
apparently due to a similar phenomenon.

MCMIS

Table 5: 2008 UCR Registration

1
2
3
4
5
6
Totals
Revenue
(1,000s):

1
107,277
18,732
6,132
1,092
253
45
133,531

2
7,109
33,518
10,390
1,026
112
4
52,159

3
1,617
4,002
40,086
5,968
429
19
52,121

PAID:
4
94
108
1,191
15,264
1,714
50
18,421

$5,208

$6,050

$12,040

$14,847

5
6
5
18
174
4,265
182
4,650

6
0
0
2
0
21
388
411

Totals
116,103
56,365
57,819
23,524
6,794
688
261,293

$17,856

$15,413

$71,414

Table 6: Percentage Reduction in Revenue due to Bracket Shift *
PAID:
1
MCMIS

1
2
3
4
5
6
Reduction in
Revenue (1,000s):

$0
$1,442
$1,177
$838
$962
$1,686

2
($547)
$0
$1,195
$708
$417
$150

3
($310)
($460)
$0
$3,432
$1,548
$708

4
($72)
($75)
($685)
$0
$5,200
$1,835

5
($23)
($19)
($65)
($528)
$0
$6,126

6
$0
$0
($75)
$0
($707)
$0

Totals
($953)
$889
$1,548
$4,449
$7,420
$10,504

$6,105

$1,922

$4,917

$6,204

$5,492

($781)

$23,858

Impact of Bracket Shift: % Reduction in Revenue: 25.04%
* Numbers in parentheses are positive, as they represent negative reductions (i.e., increases in revenue).

15

4.

FEES SET BY FMCSA

Because the FMCSA’s independent analysis indicates that the Board did not consider adequately
all required factors specified by SAFETEA-LU, FMCSA did not set 2010 fees identical to the
Board’s recommendation. FMCSA has, however, developed an approach based on analysis
conducted by the Board subsequent to its February report, and closely based on an alternative
offered by the Board’s Revenue and Fees Subcommittee. This alternative was voted on by the
Board, but failed on a tie vote. The following sections discuss the two alternatives voted on but
not adopted by the Board after new analysis to correct these inadequacies, and slight
modifications made by FMCSA in one of those alternatives. The modified alternative, which is
FMCSA’s set fee structure, is then presented and justified.
In order to fulfill the statutory objective of ensuring that the revenues derived from the fees are
sufficient to provide the revenues to which the participating States are entitled (see 49 U.S.C.
14504a(f)(1)(E)(i)), adjustments need to be applied to the current fees to recognize the
occurrence of incomplete compliance and bracket shifting.
After the Board submitted its fee recommendation, its Revenue and Fee Committee developed a
straightforward procedure to derive alternative 2010 fees for the existing brackets, taking into
account the new information about the population, compliance rates, and bracket shifts. 7 The
sections below describe this procedure as applied by the Board in developing its own
alternatives, and then as modified by FMCSA to derive its set schedule of fees.
The Board started with the revenue requirement, calculated (as described above) to be
$113,340,945. Then, an estimate was made of the maximum revenue that would be collected if
the 2009 fees were left in place but the definition of CMV were modified to eliminate towed
vehicles. Table 7 shows this calculation as performed by the Board for a population similar to
but not exactly the same as the full population used by FMCSA for its own calculations. The
number of entities falling into each bracket is based on a MCMIS run, filtered as described
earlier to include only active interstate carriers. The number in each bracket assumed (1) that
every active interstate carrier will register and pay the fee; and (2) that carriers will register in the
bracket indicated by the fleet size shown in MCMIS – i.e., that there would be no noncompliance and no bracket shift. The fees for each bracket are those in place for 2009.
Multiplying the number of entities in each bracket by the fees per entity yields the total revenues
for each bracket, as shown in the third column from the left. Summing across all six brackets
yields the maximum total revenue that could be collected in 2010 without changing the fees –
just over $70 million. FMCSA found a very similar result after performing these calculations
after scaling up the population used by the Board to the exact 2008 population estimate.
Obviously, this total is well short of the $113 million revenue requirement; the primary reason is
that, with the elimination of trailers from the definition of CMV, most carriers’ fleets fall
considerably. With smaller fleets, many carriers drop into a lower bracket and pay less. Thus,
even with full compliance and no bracket shift, existing fees would be inadequate, and would
have to be increased to bring in enough to meet each State’s revenue requirement. The Board
noted that increasing each fee by a factor of approximately $113/$70 would be enough to raise
7

This discussion is based on the procedure described in “UCR Fees – 2010 Another Approach” by Board Member
David Lazarides, a set of briefing slides dated June 23, 2009.

16

$113 million after the change in the CMV definition. A more exact version of this adjustment is
shown in the final two columns on the right – the fees have been increased by
$113,340,945/$70,054,131 (a factor of almost 1.618) and then rounded to the nearest dollar. The
totals for the brackets are shown to be very close to the revenue requirement of $113,340,945.
Table 7: Board’s Derivation of Fees Needed to Generate the Full Revenue Requirement
With 100% Compliance and No Bracket Shift
Bracket
0-2
3-5
6-20
21-100
101-1000
1001+
Total

Current
Fee
$39
$116
$231
$806
$3,840
$37,500

Carriers
267,144
76,499
56,321
17,260
3,513
276
421,013

Revenue
$10,418,616
$8,873,884
$13,010,151
$13,911,560
$13,489,920
$10,350,000
$70,054,131

Current Fees
Times Adjustment Factor
of almost 1.618*
$63
$188
$374
$1,304
$6,213
$60,671

Revenue
$16,830,072
$14,381,812
$21,064,054
$22,507,040
$21,826,269
$16,745,196
$113,354,443

*The exact adjustment factor used for this table was $113,340,945/$70,054,131, which is slightly more than
1.617905. The fees were then rounded to the nearest dollar.

Because these calculations exclude any consideration of the effect of either imperfect compliance
or bracket shift, they show an unrealistically high collection of revenue. The fees would have to
be set higher in order to overcome these additional factors affecting overall revenue. However, it
is also clear, as even the motor carrier industry interests recognize, that an increase of more than
61 percent is necessary just to account for the statutory change.
The Board, in response to FMCSA’s suggestion that enforcement could be improved, proposed a
goal of 90 percent compliance in participating States. For carriers in the States not participating
in UCR, however, the Board did not consider a compliance target of 90 percent to be feasible.
Because those States do not receive revenues through the UCR system, they will not have the
incentive to exert effort on enforcement, and compliance rates could well remain low. For this
reason, the Board offered a lower goal of 80 percent compliance.
FMCSA agrees with this concept of setting fees based on an assumption of significantly
improved compliance that is still below 100 percent. It represents a reasonable compromise
between fairness to compliant carriers and giving incentives to States on the one hand, and
maximizing the chance of meeting the States’ revenue requirements in a world of imperfect
compliance on the other.
FMCSA, however, believes that the compliance target proposed by the Board’s Revenue and
Fees Committee for carriers in non-participating States is unrealistically high in light of the
limited leverage that the participating States have over enforcement beyond their borders.
Recent figures show compliance rates of only about 40 percent among carriers based in nonparticipating States; to expect that rate to double to 80 percent in absence of enforcement effort
by the non-participating States is probably over-optimistic. FMCSA considers a target of 59
percent to be more reasonable, based on the potential for additional participating States to
conduct roadside enforcement that might identify non-compliant out-of-state CMVs for

17

enforcement. Currently, 28 of the 41 participating States, or just over two-thirds, perform this
kind of enforcement, and 13 do not. If all participating States conducted roadside UCR
enforcement, and FMCSA’s supposition that this enforcement tool determines compliance rates
among carriers in non-participating States, compliance might reasonably be expected to rise to
41/28 * 40 percent, or 59 percent.
The Board’s Revenue and Fee Committee combined the assumptions of 90 and 80 percent
compliance in participating and non-participating States respectively, with approximate data
showing the breakdown of carriers between these two groups of States, to generate a weighted
average projected compliance rate of 88.85 percent. Exhibit 8 shows the calculation of a
weighted average using more recent data and FMCSA’s alternative projection of compliance
rates in the non-participating States – a weighted average projected compliance rate of 85.50
percent. 8
Table 8: Registration Percentage Reasonableness (RPR) Factor

Participating
States
NonParticipating
States
Total

Recent
Population

FMCSA’s
Estimated
RPR

FMCSA’s
Projected
Registrations

370,575

90%

333,518

62,960

59%

37,146

433,535

85.50%

370,664

The Board’s Revenue and Fee Committee calculated that the effect of the RPR factor would
limit the maximum revenue collectable with the 2009 fee structure to only 88.85 percent of
$70,054,131, or $62,243,095, a loss of $7,811,036. The effect of bracket shift, if it remained the
same even after the redefinition of CMVs to exclude trailers, would be to reduce the maximum
$70,054,131 revenue by 25.04 percent, a loss of $17,541,554. Subtracting both of these losses
from $70,054,131 yielded a reduced maximum revenue totaling $44,701,541. The Revenue and
Fee Committee then divided this value into the revenue requirement of $112,777,060 to get a
factor of about 2.52. Multiplying this factor by the 2009 fees for each bracket yielded a set of
fees with a maximum of $98 per CMV, as shown in Table 9 below.
Table 9: Derivation of Fee for Fee and Revenue Committee Alternative
Bracket
1
2
3
4
5
6

2009 Fee
$39
$116
$231
$806
$3,840
$37,500

2009 Fee
Times 2.52
$98
$293
$583
$2,033
$9,688
$94,608

8

Based on the rounded numbers provided by the Board, FMCSA had originally calculated this percentage as 86.42
percent. This is the second of the two small changes in the calculation of the fees alluded to in Section 1.3.

18

The Fee and Revenue Committee also looked at a case with a smaller bracket shift, which was
hypothesized to be more appropriate in light of the elimination of trailers. Though FMCSA did
not consider the justification of the hypothesized reduction in bracket shift to be strong enough to
justify using the Committee’s hypothesized value of 12.5 percent, the general concept of a lower
bracket shift appears valid. FMCSA therefore used a bracket shift value of 15 percent in place of
the higher value experienced when trailers were included in the calculation of carrier’s fleet
sizes.
FMCSA agrees with the basic principles of this fee proposal, but makes several adjustments.
First, the Agency’s approach adjusts the RPR factor and resulting compliance rate slightly –
from 88.85 percent to 85.50 percent – to reflect the difficulty of increasing compliance in nonparticipating States. Second, the Agency’s approach is based on a reconsideration of the effects
of increasing the compliance rate. The alternative proposal’s calculations assume that registering
88.85 percent of carriers would mean bringing in 88.85 percent of revenue. However,
compliance rates measured as a percentage of carriers will not be directly proportional to
revenues. This is because carriers with different fleet sizes pay different fees, and compliance
rates vary by carrier size. As shown below, increasing revenue collection to 88.85 percent of the
maximum available revenue would represent only a small increase from existing levels, and
would not reflect the effect increased compliance at 80 or 90 percent of carriers would have on
revenue. To address this issue, FMCSA developed an approach that calculates the effect of
increased registration rates on revenue collection.
FMCSA’s approach starts by estimating the total revenue that the existing UCR fee structure
would bring in if there were (1) 100 percent participation using the 2008 carrier population; (2)
no change in the definition of CMVs; and (3) no bracket shift. This estimate is made by
multiplying, for each bracket, the current fee for that bracket by the total number of active
carriers in the MCMIS database falling into that bracket, based on the previous CMV definition
(which included both power units and trailers). Freight forwarders and brokers are included in
the first bracket. Summing the products across all six brackets yields $123,964,113 in revenue,
as shown in Table 10. This amount represents the most that the UCR system could generate if
no changes were made to the existing fees. (Note that this total is greater than the revenue target
of $112,777,060, because the bracket and fee structure was originally developed assuming a
somewhat smaller active population.)
Starting with this maximum, FMCSA then estimated the effects of bracket shifting. Assuming
that bracket shifting reduces revenue collection across the spectrum by the same 25.04 percent
that the Board calculated for registered carriers, FMCSA found that the maximum revenue would
be $123,964,113 * (100% – 25.04%), which is $92,923,499. The actual amount of revenue
collected in 2008 was $76,617,155, which is about 82.5 percent of the maximum after bracket
shift (as it existed when trailers were included in the definition of CMV) is taken into account.
The difference between these two amounts, $16,306,344, is the estimated loss of revenue
resulting from non-compliance. FMCSA believes that some portion of this lost revenue could be
recovered by increasing the participation rate.

19

Table 10: Calculation of Maximum Revenue at Existing Fees

Bracket
1**
2
3
4
5
6
Total

Active
Carriers
(MCMIS)*

218,829
89,773
85,058
30,716
8,118
785
433,279

Current Fee
per Entity
$39
$116
$231
$806
$3,840
$37,500

Maximum Revenue
By Bracket
8,534,331
10,413,668
19,648,398
24,757,096
31,173,120
29,437,500
$
123,964,113

*population scaled down from 433,322 to the 2008 estimate of 433,279
**includes brokers and freight forwarders

FMCSA’s approach estimates the amount that could be recovered by comparing the current
participation (compliance) rate to the RPR developed by the Subcommittee and modified by
FMCSA. The participation in 2008, the most recent full year of the UCR program, was 270,794
registrants out of a total population of 433,279, for a rate of 62.50 percent. (Notice that this rate
is considerably lower that the rate of revenue collection – 82.5 percent of the maximum revenue
available after the effect of bracket shift. This difference is due to the greater participation rate
of larger entities, which raises revenue collections disproportionately to participation in terms of
carriers.) A participation rate of 62.50 percent leaves 37.5 percent non-participating. Raising
the participation rate to FMCSA’s RPR of 85.50 percent, then, would bring most of the current
non-participants into the program. The increase from 62.50 percent participation to 85.50
percent means capturing 61.33 percent of all non-compliant carriers. (The increase in
compliance by 23.0 percentage points of out the total of 37.50 percent non-participants means
that the improvement in compliance represents 23.0/37.50 or 61.33 percent of all nonparticipants.)
The next step in FMCSA’s approach is to calculate how much of the $16,306,344 in lost
revenues would be brought in by capturing 61.33 percent of the non-participating carriers. This
step is difficult because there are no data on the size of the carriers that would be brought in to
reach the RPR. Nonetheless, it is likely that, just as with the carrier population as a whole, the
carriers that are still unregistered after compliance is improved would be somewhat smaller that
the new registrants. Thus, the percentage of currently uncollected revenues that still remain
uncollected after compliance is improved will be smaller than the percentage of currently
unregistered carriers that will still remain unregistered. FMCSA knows of no absolutely certain
method to estimate the extent of this effect. It seems reasonable, though, to assume that the
relationship between the percentage of uncollected revenues and the percentage of unregistered
carriers after the increase in compliance will be similar to the relationship between the current
percentage of uncollected revenues and current percentage of unregistered carriers. Currently,
(100%-82.5%) or 17.5% of revenues are not being collected; the ratio of 17.5% to the 37.5% of
carriers that are not registered is 0.468. With improved compliance, FMCSA believes that
61.33% of remaining carriers can be registered, leaving only 38.67% unregistered. Multiplying
20

0.468 by 38.67% yields 18.09%, which is FMCSA’s estimate of the percentage of currently
uncollected revenues that will still be uncollected after compliance improves. Thus, (100%18.09%) or 81.90% of the currently uncollected revenues are assumed to be recoverable when
61.33% of the currently unregistered carriers are brought into URS. Multiplying the
$16,306,344 in currently uncollected revenues by 81.90% yields an increase of $13,354,895.
This increase in revenue, added to the $76,617,155 that was collected at current compliance
rates, would bring collections to $89,972,050 under the degree of bracket shift seen to date.
Assuming that the impact of bracket shift will fall to 15% with the removal of trailers from the
definition of CMV should increase these collections by a factor of (100%-15%)/(100%-25.04%)
to $102,024,052. However, this estimate does not take into account the change in the definition
of CMV. Eliminating trailers from the carriers’ fleets dropped many of them to lower brackets,
where they pay lower amounts. In the absence of a change in fees, revenue would drop
significantly. FMCSA estimates the size of this drop by comparing the maximum revenue
available from the existing population, as recorded in MCMIS using the new CMV definition, to
the maximum revenue available using the old definition. Comparing the maximum revenue
derived using the new definition of CMV and the 2008 population of 433,279 ($70,018,681)
with the maximum revenue derived using the old definition ($123,964,113) produces a ratio
slightly more than 0.5648. (Note that the Subcommittee’s estimate of that maximum, which was
$70,054,131, could not be used directly because it was based on a different population estimate.
That estimate, from December 2008, totaled 421,013 carriers, apparently excluding brokers and
freight forwarders. FMCSA adjusted the estimate of the total maximum revenue collection by
adding 16,457 brokers and freight forwarders, scaling down the carrier population in each
bracket to match that in FMCSA’s estimated 2008 population, and multiplying by the 2008 fees.
This adjustment resulted in a slight reduction in the maximum 2008 revenue from $70,054,131
down to $70,018,681.) Applying this factor to the figure we derived earlier by taking into
account the RPR and bracket shifting ($102,024,052) results in estimated revenues of only
$57,626,271 if the current fees were not increased. This revenue estimate, based on the 2008
population, would rise very slightly to $57,660,319 after scaling up by 433,535/433,279 for the
slightly larger 2010 population. In other words, after factoring in the RPR and bracket shifting,
FMCSA estimates that the Plan would only collect $57,660,319 if the fees are not adjusted.
This is far less than the revenue amount the States are entitled to receive by statute.
Consequently, FMCSA’s proposal includes an adjustment factor to remedy this shortfall.
Dividing the revenue target ($112,777,060) by the estimated revenue based on current fees
($57,660,319 ) produces a shortfall adjustment factor of 1.95589. Applying this factor to the
current fees yields FMCSA’s set fee structure, as shown in Table 11.

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Table 11: Derivation of Fee for FMCSA Proposal
Bracket
1
2
3
4
5
6

2009 Fee
$39
$116
$231
$806
$3,840
$37,500

2009 Fee Times
1.95589
$76
$227
$452
$1,576
$7,511
$73,346

FMCSA believes that this fee structure is likely to meet the statutory objective of ensuring that
the fees are sufficient to provide the revenues to which the participating States are entitled. It
adjusts the fees to reflect the statutory change in the applicable definition of commercial motor
vehicle. It is based on a reasonable estimate of the number of active motor carrier entities
subject to the UCR fees. It adjusts the fees to recognize the historical occurrence of revenue
shortfalls occurring because of bracket shifting. Finally, it also establishes reasonable targets for
compliance by the motor carrier industry to encourage enhanced enforcement efforts by the
participating States.
5.

IMPACTS ON SMALL ENTITIES

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. FMCSA identified for-hire cargo carriers with fewer than 148 power units (i.e., trucks
or tractors) as small. FMCSA also identified passenger carriers with fewer than 47 power units as
small. Thus, all of the 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. Concerning truck power units, the Agency
determined in the 2003 Hours of Service Rulemaking RIA 9 that a power unit produces about
$172,000 in revenue annually (adjusted for inflation) 10. According to the SBA, motor carriers
with annual revenue of $25.5 million are considered a small business 11. 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.
9

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.
10
The 2000 TTS Blue Book of Trucking Companies, number adjusted to 2008 dollars for inflation.
11
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.

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Concerning 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 12, 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 13 (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.
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 $7.25.14 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.

6.

SUMMARY EVALUATION

The Unified Carrier Registration Act of 2005 within SAFETEA-LU provides for the
determination of fees by the Secretary based upon the recommendation of the Board. In this
process, the statute gives both the Board and the Secretary specific direction in several areas.
They are to consider both administrative costs associated with the UCR Plan and Agreement and
whether the fees will generate revenues at the levels set by the Board. The Act directs the Board
and the Secretary to base the fees on the number of commercial vehicles owned or operated by
the motor carrier, private motor carrier, or freight forwarder, setting fees no higher for a broker
or leasing company than the smallest fee charged under the UCR Agreement. The fee structure is
required to have no fewer than four and no more than six brackets, based on fleet size. Finally,
the fee scale is to be progressive in amount.

12

FMCSA Large Truck and Bus Crash Facts 2008, Tables 1 and 20; http://fmcsa.dot.gov/facts-research/LTBCF2008/Index2008Large TruckandBusCrashFacts.aspx
13
FMCSA MCMIS snapshot on 2/19/2010.
14
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/

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FMCSA took both the States’ revenue requirements and the administrative costs of the UCR
program into account in establishing the revenue requirements for its fee structure. FMCSA
modified the Board’s recommendation to ensure that the fees generate adequate revenue by
adjusting the base population to accurately reflect the number of affected entities and by
increasing the fees to take bracket shift into account. FMCSA based the fees on the number of
commercial vehicles owned or operated by the motor carrier, private motor carrier, or freight
forwarder and also set the fees for brokers and leasing company to be equal to lowest fees, i.e.
the fees in the lowest bracket. The fee structure set by FMCSA contains a total of six brackets.
Under the FMCSA’s approach, the fee per carrier increases as the size of the carrier increases.
This clearly meets the definition of “progressive” as understood by the Board, thereby meeting
the requirement of the statute. Through this evaluation, FMCSA has satisfied all the statutory
requirements and thus fulfilled the Secretary’s obligation in establishing fees.

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