STATE OF WISCONSIN
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY
AMENDING PERMANENT RULE
The State of Wisconsin Department of Transportation Proposes an Order to Amend Permanent Rule Ch. Trans 178 Relating to Unified Carrier Registration System, and affecting small businesses. The Governor approved the Statement of Scope for this Permanent Rule, SS 004-16, on January 15, 2016, and it was published in Register No. 721B on January 25, 2016. The Secretary of the State of Wisconsin Department of Transportation (“Department”), Mark Gottlieb, P.E., approved the Statement of Scope on February 15, 2016, as required by s. 227.135(2), Stats. The analysis below was prepared by the Department.
Statutes Interpreted: Wis. Stat. s. 194.407. Explanation of Agency Authority: Authority for this rulemaking is provided in Wis. Stat. s. 194.407. Wisconsin Stat. s. 194.407, requires the Department to implement and administer a Unified Carrier Registration System (“UCR”) for motor carriers, including private motor carriers in accordance with 49 U.S.C. 13908 and 14504a. Wisconsin Stat. s. 194.407 was created by 2007 Wisconsin Act 20. Related Statute or Rule: Wisconsin Administrative Code ch. Trans 152 Wisconsin Interstate Fuel Tax and International Registration Program. Plain Language Analysis: This rulemaking proposes to fulfill the new requirements of “UCR” Agreement adopted by the UCR Board in August 2014. The UCR Agreement now requires participating states, including Wisconsin, to conduct a specified number of audits of UCR motor carriers each year. The Department proposes to create provisions in Wisconsin Administrative Code ch. Trans 178 to implement a Wisconsin UCR audit program. While Wisconsin statutes and current rules provide for participation in the UCR and provide enforcement penalties for failure to register, there is no explicit provision for auditing, audit collection, audit penalties, and audit sanctions. The Department also proposes to update language and defined terms in relevant sections of Trans 178 in order to provide clarity and consistency.
The proposed rule will not affect total Wisconsin revenue received by the UCR program. If the proposed audits increase or reduce the revenue collected by Wisconsin from specific carriers it will not change the total retained by Wisconsin. Total Wisconsin revenue, as for all states, is capped by the State Revenue Entitlement figures described in Fees for the Unified Carrier Registration Plan and Agreement, 75 Fed. Reg. 21993, April 27, 2010, Table 5, pages 22008-22009.
Wisconsin revenue each year historically exceeds the state’s entitlement figure. Wisconsin remits any revenue collected, over its entitlement, to the UCR Board per 49 USC 14504a(h)(2). The UCR Board distributes the total excess collected to states which have not received revenue exceeding their entitlement figures, per 49 USC 14504a(h)(2).
Summary of, and Comparison with, Existing or Proposed Federal Statutes and
Regulations: 49 U.S.C. 14504a authorizes the UCR board of directors to issue rules and regulations to govern the UCR agreement.
In August 2014, the UCR board of directors adopted audit requirements which now
requires participating states, including Wisconsin, to conduct a specified number of audits of
UCR motor carriers each year.
Comparison with Rules in Adjacent States: The Department contacted UCR officials in Wisconsin’s neighboring states. None of our neighboring states have implemented an audit program. Some states have informal practices of contacting a carrier which they believe may have underpaid.
Currently the UCR Board does not issue sanctions against states that do not fulfill the audit requirements adopted by the UCR Board in 2014. Our neighboring states are waiting until sanctions are in place before they create an audit program, Wisconsin is taking a proactive approach.
Illinois. Illinois participates in the UCR program but does not have a formal audit program. Illinois was unresponsive after multiple attempts to contact their UCR officials.
Iowa. Iowa participates in the UCR program but does not have a formal audit program. Their enforcement for not registering for UCR is authorized under the following statutes; Iowa code 805.8A and 327B.1
Michigan. Michigan participates in the UCR program but does not have a formal audit program. Michigan contacts a carrier if they find that a carrier owes additional money for UCR. Michigan’s only enforcement of UCR is lack of registration which is enforced by the State Patrol during roadside inspections
Minnesota. Minnesota participates in the UCR program but does not have a formal audit program. Minnesota has not conducted the research to find out if they have authority to audit UCR, audit collection, audit penalties, or audit sanctions. Minnesota will contact carriers to adjust their registration or if they have failed to register for UCR.
Summary of the Factual Data and Analytical Methodologies that the Agency Used in Support of the Proposed Rule and How Any Related Findings Support the Regulatory Approach Chosen for the Rule: No more than 1% of Wisconsin based interstate trucking and bus companies will be audited annually. Only those found to have underpaid, kept inadequate records, or failed to produce records through audit, will be affected by the proposed rule. Based on our analysis of the 2015 registration year, no more than 40 businesses would have received an audit assessment in 2015. An estimated 9,000 Wisconsin based motor carriers are subject to UCR and the UCR audit requirement annually.
The Department consulted with several other states and considered several approaches to verification of records. The proposed rule creates the method to conduct UCR audits. The UCR Agreement now requires participating states to conduct a specified number of audits of UCR motor carriers each year, but does not give direction on how to conduct UCR audits.
The Department also considered a range of approaches to structure penalties. The proposed rule provides penalties for four types of offenses. The penalties escalate by the seriousness of the type of offense and as a result of subsequent offenses.
The Department considered a non-escalating approach, but that approach would be less fair due to the difference in the severity of violations. The Department also considered a more complex penalty structure, but that approach was complex and unclear, which would make this structure more difficult to administer. The rulemaking proposes a compromise of the two approaches.
The proposed penalties bear a mathematic relationship to the delinquent fee. While fees are noticeable, they are a small fraction of truck revenue. The penalties should not generally put a trucking company out of business.
Analysis Regarding Rule’s Effect on Small Businesses: UCR may have a small effect on a small number of Wisconsin based interstate trucking companies. For companies up to 1,000 trucks, the maximum underpayment would be up to $76.00 per year, per truck. For companies with more than 1,000 trucks, the fee per vehicle maxes out at flat fee for $73,346 for 1,001 or more vehicles. The average maximum underpayment of the fee itself would decline arithmetically from $73.346 per vehicle as the number of a company’s vehicles exceeds 1,000.
The agency contact person listed below is also the small business regulatory coordinator for this proposed rule. This proposed rule, fiscal estimate, and other related documents may be viewed at http://docs.legis.wisconsin.gov/code.
Agency Contact Person: