Trucking Deregulation Bill

Fee Structure to be Rewritten for Trucking Deregulation Bill

As UHCA predicted, CTA's trucking deregulation bill has been drastically amended since it was introduced in the Assembly early last year. AB 1683 (Conroy) originally directed all functions, both administrative and enforcement, to the CHP. Major opposition forced the bill to be amended to give the administrative functions to the DMV.

AB 1683 will be heard in the Senate Appropriations Committee in August when the Legislature returns from their summer break. During the break, the President of UHCA and UHCA lobbyist Deborah Mattos will meet with other representatives from the trucking industry, as well as DMV, CHP and the CPUC. When AB 1683 was heard before the members of the Senate Energy, Utility and Communications Committee, several groups expressed their opposition to the funding mechanism in the bill. Under current law, private and for-hire trucking pay fees to the CPUC. Private carriers pay $40 per year and for-hire trucking companies pay fees based upon their gross revenues. AB 1683 changes the fee structure for all trucking companies, (except motor carriers of passengers and moving companies), based upon the number of trucks they own. DMV will collect these fees. The CPUC reports there are approximately 14,000 unregistered and possibly uninsured trucks within the state. With the new program administered by DMV, they will be able to identify these owners, thus bringing more companies into the program and enabling the fees to be reduced for all.

  If this bill is signed into law, the following changes will be made:
	.  Private carriers will be required to provide evidence of worker's compensation insurance.
	.  Penalties for maximum fines will be raised from $1000 to $2500.
	.  Policy for suspension of operating authority will be stricter, but only after due process through the CHP and the DMV.
	.  DMV will be able to combine their current licensing responsibilities with the registration, licensing and insurance duties, thus reducing program costs.
	.  CHP will add 16 new inspectors to enforce the provisions of the bill.  The cost for these inspectors will be paid for through the cost savings resulting from the transfer from the program.
	.  CHP officers will be assigned on a 24-hour basis for enforcement purposes at the three border crossings between California and Mexico.

WARNING

UHCA predicts that DMV will integrate registration as an enforcement tool. By virtue of licensing, the DMV could wield enormous control over the trucking industry. The Big Brother that DMV is capable of turning into will make the average trucker reminisce about the "efficient and fair" days of the CPUC.

UHCA arranged for a discussion of the fee restructuring schedule on Thursday, July 18. Among those who attended were representatives of the DMV, CHP, PUC, UHCA, CTA, CIOMA, agriculture, and a few trucking companies. At the meeting, a number of concerns about AB 1683 were raised and addressed:

Backhauling- It's no secret that many private carriers backhaul for-hire loads under the current deregulation conditions. UHCA's President stated, "For-hire carriers who pay into the PUC as commercial carriers resent the fact that privates who backhaul do so without paying additional PUC fees." The proposed fee structure mandates that in order to haul commercially, either as a private carrier or as a for-hire carrier, you must pay into the fee schedule. It may even be to the advantage of certain privates to register as for-hires simply because the Uniform Business License Tax coverage immunizes truckers from local municipality business taxes.

Accountability- UHCA's President raised the issue of accountability: "How do we know that the money we pay into this fee structure is properly appropriated? For example, a trucker in Redding who pays the cargo theft interdiction fee certainly doesn't receive equivalent enforcement of cargo thefts to a trucker in Southern California. You have to report the statewide success rate of the cargo theft program in order to keep fee payers content that their money is actually translating to tangible services." A representative of the agricultural community further emphasized: "We need to see facts and figures in order to justify these fee increases to our members." DMV assured all of the members present that statistics would be made public on a regular basis by the year 1999.

Equity- If you take out your calculator and fool around with the fee schedule for a couple of minutes, the first thing you'll notice is a huge discrepancy between the amount of fees paid per truck for small and large fleets. Whereas a 10 truck operation would pay $50 per truck, a fleet of 2000 pays less than $2 per truck. DMV explained that application costs for their agency are the same--whether it be a single owner-operator or a fleet of 200. They determined the fee structure on "somewhat of a graduated, arbitrary basis, hoping to realize a certain degree of fairness."

Adjustability- Under the current system, the only way the PUC can raise fees is through statute. As originally proposed by CTA, the new fee structure would have given the DMV and CHP discretion to adjust the fee schedule upwards or downwards without a cap. UHCA and the agricultural interests made it clear that they would not support a bill that gives the DMV and CHP such latitude to increase the fees. At this point, DMV made it clear that the guiding principle behind deregulation is a fee decrease, along with an increase in service. As a direct consequence of pressure from groups working to represent the small trucking companies, CTA was pressured to amend the bill so that fees can only be reduced, not "adjusted," by the CHP / DMV.

Just the Facts, Please! DMV expects the "safety" fees to decrease immediately after the first year (start up costs, computer setup). The UBLT and cargo theft interdiction fees are capped at $6 million and $1.4 million per year. These fees will also decrease per carrier as the total pool of carriers who pay into the DMV / CHP fund is increased. It is the responsibility of the DMV / CHP to identify and register the roughly 14,000 carriers who have ignored their obligation to pay these state safety and insurance fees. The DMV / CHP based the fee schedule on an a population estimate of 50,000 carriers, although UHCA figures the carrier population is closer to 67,000. UHCA is currently working on an amendment to bring couriers and brokers into the fee paying pool to further decrease the fees. We can expect a decrease in the current fee schedule within the next few years, and must hold the DMV / CHP responsible if we don't see one.

UHCA urges any members to communicate your comments regarding the fee structure. Call the UHCA office or Deborah Mattos at (916) 447-1191. The following is the proposed fee structure proposed by CTA: