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United States Government Accountability Office: 

Washington, DC 20548: 

May 25, 2007: 

The Honorable Patty Murray: 
Chairman: 
The Honorable Christopher S. Bond: 
Ranking Member: 
Subcommittee on Transportation, Housing, Urban Development, and Related 
Agencies: 
Committee on Appropriations: 
United States Senate: 

Subject: Unified Motor Carrier Fee System: Progress Made but Challenges 
to Implementing New System Remain: 

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.[Footnote 1] 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. The Secretary 
of Transportation appoints the board, which consists of the Deputy 
Administrator of the Federal Motor Carrier Safety Administration 
(FMCSA) and representatives from participating states and the motor 
carrier industry. The Secretary also ultimately sets the fees and has 
delegated this responsibility to FMCSA. 

You asked us 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. 

To describe the steps taken to implement the unified carrier fee system 
and to determine the status of its implementation, we attended five 
board meetings and reviewed drafts of the UCRA and other board 
documents, such as meeting minutes. To identify the factors 
contributing to a delay in implementing the unified carrier fee system, 
we interviewed key FMCSA officials and 7 of the 15 board 
members.[Footnote 2] To identify potential implications resulting from 
a delay in implementing the unified carrier fee system, we surveyed the 
37 states that are planning to participate in the new system. We asked 
the extent to which the delay in implementing the new system has 
hindered certain state operations on a 5-point scale, ranging from very 
greatly hindered to little or not at all. Twenty-eight states 
responded. We conducted our work from September 2006 through April 2007 
in accordance with generally accepted government auditing standards. 

On March 27, 2007, we briefed your staff and the staff from the Senate 
Commerce, Science, and Transportation Subcommittee on Surface 
Transportation and Merchant Marine Infrastructure, Safety and Security 
on the results of our analysis. This report formally conveys and 
updates the information provided in that briefing (see app. I). In 
summary: 

* 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. On May 12, 2006, the Department of Transportation completed its 
process to select board members and announced the board's composition. 
Since then the board has taken several steps to implement the new 
system. 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. On April 17, 2007, however, the Texas 
Department of Transportation informed the board that it would not host 
this Web site since handling the data for the states would result in an 
unacceptable level of liability to the state. Texas officials offered 
to transfer the development of its Web site to any other state that 
would be interested in hosting the registration system. Finally, the 
board developed a recommended fee structure. During this time, FMCSA 
provided the board with financial and technical assistance, such as 
preparing and posting official notices of board meetings in the Federal 
Register. 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. The board reported its recommended fee structure to the 
Secretary of Transportation on December 6, 2006. According to FMCSA 
officials, FMCSA sent the chair and vice-chair of the board a letter on 
December 21, 2006, that stated that the board's initial fee memorandum 
lacked information it viewed as essential for it to complete its rule- 
making process. In response, the board submitted a revised fee 
structure dated March 23, 2007. FMCSA accepted this revised fee 
structure on April 2, 2007, and is drafting a Notice of Proposed 
Rulemaking to formally set the fees. 

* 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. SAFETEA-LU allowed 17 months--from August 2005 to January 2007-
-to implement the new system before the Single State Registration 
System expired. These 17 months included 90 days for the Secretary of 
Transportation to set fees. During the first 9 months (August 2005 to 
May 2006), the Secretary of Transportation appointed a Board of 
Directors. 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. During the following 7 months 
(May 2006 to December 2006), the board completed the analysis required 
to estimate the number of affected motor carriers and related 
entities[Footnote 3] and developed a fee structure to generate about 
$106 million in needed revenues.[Footnote 4] The board and FMCSA took 
additional time to resolve two fee-related issues related to 
implementing the new fee system. First, the board interpreted SAFTEA-LU 
as allowing them to charge unified carrier fees to all motor carriers, 
including those operating in nonparticipating states, but FMCSA did not 
determine until April 2 that SAFTEA-LU allows the board to charge fees 
to those motor carriers operating in nonparticipating states. Second, 
the board based its initial fee structure on the estimated number of 
power units operated by affected motor carriers, but FMCSA officials 
explained that SAFETEA-LU specifies that commercial motor vehicles be 
used as the basis for the fee structure.[Footnote 5] The board's 
revised fee structure that FMCSA accepted in April uses commercial 
motor vehicles as its basis.[Footnote 6] Lastly, now that the board and 
FMCSA agree on the fee proposal, the amount of time required to set the 
fees could cause further delays. 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. In addition, 23 of 28 states 
reported that the delay hindered their ability to regulate motor 
carriers, and 13 states indicated that this was a great or very great 
hindrance. For example, Washington state officials reported that it had 
to scale back its transportation regulation, such as safety audits of 
commercial motor vehicles, drivers, and companies, by approximately 20 
percent. Finally, 19 of 28 states reported that the delay hindered 
their ability to improve safety programs, and 9 states indicated that 
this was a great or very great hindrance. Moreover, further delay could 
jeopardize safety and enforcement programs in certain states. For 
example, Michigan reported that if replacement funding is not secured 
by July 1, 2007, its entire enforcement program, including the federal 
Motor Carrier Safety Assistance Program, will likely shutdown.[Footnote 
7] 

Prior to our March 27, 2007, briefing, we provided the Department of 
Transportation with the briefing document and incorporated technical 
comments at that time. Since then the Department of Transportation has 
reviewed the draft report and did not have any comments on it. 

We are sending copies of this report to the Secretary of 
Transportation, appropriate congressional committees, and other 
interested parties. We will also make copies available to others upon 
request. In addition, the report will be available at no charge on 
GAO's Web site at http://www.gao.gov. 

If your staff have any questions about this report, please contact me 
at (202) 512-2834 or brownke@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. GAO staff who made key contributions to this 
report are listed in appendix I. 

Signed by: 

Kay E. Brown, 
Acting Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: GAO Briefing to Senate Subcommittees: 

Unified Carrier Fee System: Progress Has Been Made, but Implementation 
Delays May Hinder States' Ability I to Regulate Commercial Motor 
Vehicles: 

Briefing for Senate Appropriations Subcommittee on Transportation, 
Housing and Urban Development, and Related Agencies and Senate 
Commerce, Science, and Transportation Subcommittee on Surface 
Transportation and Merchant Marine Infrastructure, Safety, and 
Security: 

March 27, 2007: 

Introduction: 

The Single State Registration System annually provided 38 states with 
about $100 million in total fees collected from for-hire interstate 
motor carriers. Motor carriers paid these fees and provided information 
on insurance to states upon registering. States used revenue collected 
from this system to supplement general funds and conduct safety-related 
services. 

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. 

Unlike the Single State Registration System, the new system broadened 
the base of those expected to pay fees to include exempt t for-hire 
motor carriers, private motor carriers brokers, freight forwarders, and 
leasing companies. (See enclosure I for a definition of each entity). 

To develop and administer this fee system, Congress established a Board 
of Directors. This board will also administer a federal- interstate 
Unified Carrier Registration Agreement (UCRA), and issue rules and 
regulations to govern the UCRA. 

The Secretary of Transportation appoints the Board of Directors, which 
consists of a Federal Motor Carrier Safety Administration (FMCSA) 
representative and representatives from participating states and the 
motor carrier industry, and ultimately sets the fees. 

The Single State Registration System expired, but the unified carrier 
fee system was not implemented by January 1, 2007, preventing the 
collection and distribution of fees to states until the new system is s 
in n place.[Footnote 8] 

Objectives: 

Based on interest from the Senate Appropriations Committee, we began 
work on this issue. This briefing will: 

* describe steps taken to implement the unified carrier fee system and 
the current status of implementation, 

* identify factors contributing to the delay in implementing the 
unified carrier fee system, and: 

* identify any potential implications resulting from the delay in 
implementing the unified carrier fee system. 

Scope and Methodology: 

To describe the steps taken to implement the unified carrier fee system 
and to determine the status of its implementation we attended four 
board meetings, and reviewed drafts of the UCRA and other board 
documents, such as meeting minutes. 

To identify the factors contributing to a delay in implementing the 
unified carrier fee system, we interviewed 7 of the 15 board members 
and key FMCSA officials. 

To identify potential implications resulting from a delay in 
implementing the unified carrier fee system, we surveyed the 37 states 
that are planning to participate in the new system. We asked the extent 
to which the delay in implementing the new system has hindered certain 
state operations on a 5-point scale, ranging from very greatly hindered 
to little or not at all. Twenty-eight states responded. 

We conducted our work from September 2006 through March 2007 in 
accordance with generally accepted government auditing standards. 

Results in Brief: 

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 time taken for start-up actions, such as a pointing board members 
and recommending a new fee structure, left insufficient time to 
implement the unified carrier fee system on time. In addition, 
unresolved issues over key elements of the board's recommended fee 
structure and the time required to publish the proposed fees and issue 
final rules could cause further delays. 

The delayed implementation of the unified carrier fee system has 
hindered some participating states ability to acquire revenues and 
thus, regulate motor carriers, and improve the quality of safety 
programs. According to state officials, further delay could jeopardize 
safety programs in some states. 

Background: SAFETEA-LU Created a New System for Collecting Fees from 
Motor Carriers: 

In August 2005, SAFETEA-LU replaced the Single State Registration 
System with a unified carrier fee system, requiring the motor carrier 
industry to pay fees to states that chose to participate. 

This new system was created to lower the burden on for-hire interstate 
motor carriers while ensuring that states receive their revenues by 
spreading registration fees to private motor carriers, brokers, freight 
forwarders, and leasing companies. 

Participating states that were part of the Single State Registration 
System are entitled to continue receiving the amount of fees they 
collected under the old system in registration year 2004, plus an 
allocation to cover expected intrastate registration fees. 

States that were not part of the previous system can receive up to 
$500,000 per year if they choose to participate under the new system. 

Background: FMCSA, States, and Motor Carriers Play a Role in the New 
System: 

SAFETEA-LU specified that: 

* A 15-member Board of Directors governs the system. 

* The board is made up of a representative from FMCSA, and 
representatives from participating states, and the motor carrier 
industry. 

The board is charged with: 

* developing and administering an agreement among the parties, 

* developing and recommending a new fee structure, and: 

* developing a method for distributing collected revenues to 
participating states. 

SAFTEA-LU charged the Secretary of Transportation with setting the fees 
and any subsequent changes to those fees within 90 days after receiving 
the board's recommendation -a responsibility the Secretary delegated to 
FMCSA. 

Background: New System Revenues to Be Used for Safety, Enforcement, or 
Administration: 

SAFETEA-LU restricts participating states' use of revenues generated 
under the unified carrier fee system. These revenues may be used only 
for: 

* motor carrier safety programs, 

* motor carrier enforcement programs, or: 

* administration of the unified carrier fee system. 

States may use these revenues as matching funds for federal commercial 
motor carrier safety purposes. 

Objective 1: FMCSA and the Board Have Taken Steps to Implement the New 
System: 

On May 12, 2006, the Department of Transportation completed its process 
to select board members and announced the board's composition. 

Between June 2006 and March 2007, the board met almost monthly and: 

* Determined the amount of fees states participating in the Single 
State Registration System collected in registration year 2004 and 
established total state entitlement (referred to as the "cap"), as 
specified in SAFETEA-LU. 

* Estimated the number of motor carriers and other entities that are 
covered under the new system. 

* Identified states that would participate in calendar year 2007 (37 
states). 

Objective 1: Most States Will Participate in the New System in 2007: 

[See PDF for image] 

Source: FMCSA. 

Note: Alaska and Hawaii are not participating. According to FMCSA, 41 
states plan to participate in 2008. 

[End of figure] 

The board also: 

Drafted procedures to govern the collection and distribution of fees 
paid by for-hire and private motor carriers, brokers, freight 
forwarders, and leasing companies. 

Identified a state 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. Texas volunteered to develop this initial system. 

Developed an initial recommended fee structure, which it reported to 
the Secretary of Transportation on December 6, 2006, and a revised fee 
structure in March 2007. The board considered a number of factors in 
developing this structure such as equity among motor carrier entities 
with different fleet sizes. 

The board formulated a fee structure to generate over $106 million in 
revenues. The approximately $106 million in revenue is a sum of the 
$101 million entitled to participating states that were part of the 
Single State Registration System, $5 million for administrative costs, 
and $500,000 to Oregon for joining the new system. 

During this time, FMCSA provided assistance to the board. 

* FMCSA provided approximately $60,000 in financial assistance to pay 
for meeting space and travel because the board does not have funding 
for its activities until fees are collected. 

- In January 2007, however, FMCSA informed the board it would o longer 
fund these costs given budget constraints. The March 00 board meeting 
as e d via teleconference. Until the board begins to collect fees, it 
has no specific funding for its administrative costs, such as travel 
and setting up an electronic fund transfer system. 

* FMCSA provided technical assistance and consultation in areas such as 
the board's responsibility to notify the public of its meetings and 
factors to consider when developing a fee structure. 

* FMCSA prepared and posted official notices of board meetings in the 
Federal Register. 

Objective 1: Key Steps Remain Incomplete and a Date for Implementation 
is Not Clear: 

As of March 23, 2007, a number of key steps had not been completed: 

* The board had not designated a depository to hold revenues generated 
by the unified carrier fee system and distribute them to participating 
ates. 

* The Texas Department of Transportation had not completed development 
of the registration Web site. 

* The Secretary of Transportation had not set fees. According to FMCSA, 
it sent the chair and vice-chair of the board a letter on December 21, 
2006, that stated that the board's initial fee memorandum lacked 
information it views as essential for it to complete its rule-making 
process.[Footnote 9] FMCSA asked the board for this information. The 
board had not yet submitted a new fee structure. 

* No timeline for finalizing these steps had been set. 

Objective 2: The Time Taken for Start-up Activities Left Insufficient 
Time to Finalize the New System: 

The length of time taken to complete certain key start-up activities 
contributed to not having an implemented unified carrier fee system by 
January 1, 2007. (See enclosure II for a timeline of key events). 

SAFETEA-LU allowed 17 months to implement the new system before the 
Single State Registration System expired-from August 2005 to January 
2007. This time frame included 90 days for FMCSA to set fees. 

During the first 9 months (August 2005 to May 2006) the Secretary of 
Transportation appointed a Board of Directors. FMCSA officials told us 
it took time to identify potential board members make sure there would 
be a balanced composition that complied with SAFETEA-LU requirements, 
and invite members to participate. 

During the following 7 months (May 2006 to December 2006), the board 
estimated the number of affected motor carriers and related entities 
and recommended a new fee structure. 

Estimating the number of motor carriers and related entities required 
several steps: 

* The board used FMCSA's Motor Carrier Management Information System 
(MCMIS) database to estimate the number of active motor carriers from 
which it could expect to collect a fee. This included determining both 
the overall population of motor carriers and their fleet size. 

* The board found that FMCSA's MCMIS database that contained 712,837 
motor carriers was unreliable in part because it included inactive 
motor carriers. As a result, the board used MCMIS to identify as active 
those interstate motor carriers that had some roadside or audit 
activity (roadside inspections, reportable crashes, or a safety review) 
within a 30 month period. In response to FMCSA concerns about this 
number, the board worked with FMCSA to identify additional fields in 
MCMIS to ultimately identify about 350,700 motor carriers. 

* From that subset, the board added 14,575 active brokers and freight 
forwarders in FMCSA's License and Insurance System database. 

* Ultimately, the board estimated that states might be able to collect 
fees from about 36,000 companies. 

Objective 2: Unresolved Issues Regarding the Fee Structure May 
Contribute to Further Delay: 

Given its legal responsibility to set the fee, FMCSA officials 
explained that SAFTEA-LU states that the Secretary of Transportation 
also has the responsibility to review the basis for the fees and 
consider the same =hat the board considered to ensure compliance with 
the law. 

The board and FMCSA have not completely resolved two fee-related 
issues: 

* Carriers in nonparticipating states paying fees: 

- The board interpreted SAFTEA-LU as allowing them to charge unified 
carrier fees to all motor carriers. Under the Single State Registration 
System, states collected fees from all for-hire interstate motor 
carriers. 

- As of March 19, 2007, FMCSA had not yet determined whether SAFTEA-LU 
allows the board to charge fees to motor carriers operating in 
nonparticipating states. 

Fees based on power units: 

* The board based its initial fee structure on the estimated number of 
power units operated by affected motor carriers since power units were 
used as the basis for the Single State Registration System. Power units 
are self-propelled motor vehicles. 

* FMCSA officials explained that SAFETEA-LU specifies that commercial 
motor vehicles be used as the basis for the fee structure. The law 
defines commercial motor vehicles as those vehicles that are self- 
propelled or towed. These vehicles include self-propelled vehicles and 
accompanied towed vehicles, such as trailers. 

* Thus, the board developed a revised fee structure based on the number 
of self-propelled and towed vehicles in the fleet. On March 15, 2007, 
the board met and voted on this new recommended fee structure and plans 
to submit this revised fee structure soon. 

The board's revised fee structure recommendation: 

Bracket 1; 
Fleet size: 0-2; 
Percent of industry: 50.0%; 
Fee: $39; 
Revenue: $7,128,498. 

Bracket 2; 
Fleet size: 3-5; 
Percent of industry: 20.0%; 
Fee: $116; 
Revenue: $8,457,560. 

Bracket 3; 
Fleet size: 6-20; 
Percent of industry: 20.0%; 
Fee: $231; 
Revenue: $16,893,030. 

Bracket 4; 
Fleet size: 21-100; 
Percent of industry: 7.7%; 
Fee: $806; 
Revenue: $22,524,476. 

Bracket 5; 
Fleet size: 101-1,000; 
Percent of industry: 2.1%; 
Fee: $3,840; 
Revenue: $29,548,800. 

Bracket 6; 
Fleet size: 1,001+; 
Percent of industry: 0.2%; 
Fee: $37,500; 
Revenue: $22,762,500. 

Total; 
Fleet size: [Empty]; 
Percent of industry: 100.0%; 
Fee: [Empty]; 
Revenue: $107,314,864. 

Source: Unified carrier fee system Board of Directors. 

[End of table] 

FMCSA interprets SAFETEA-LU as permitting it to delay starting the 90- 
day period allowed for fee setting until it believes the board provides 
a recommendation that sufficiently explains the basis for its fee 
proposal. 

FMCSA officials told us they have authority to set fees without regard 
to the board's recommendations; however, the officials said they would 
prefer to resolve any issues collaboratively with the board. 

It is not clear that FMCSA's interpretation of the SAFETEA-LU 90-day 
fee-setting period is correct. SAFETEA-LU does not specifically 
authorize the Secretary of Transportation to delay this procedure. 

A 90-day period measured from when the board submitted its original fee 
recommendation on December 6, 2006, would have elapsed on March 6, 
2007. 

Objective 2: Rule-making Requirements Are Likely to Contribute to 
Further Delay: 

According to FMCSA, the need to follow the Administrative Procedure Act 
in finalizing the new system fees may contribute to further delay. 

* SAFETEA-LU required 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, because the unified carrier fee system has an economic impact 
more than $100 million, FMCSA officials believe the Office of 
Management and Budget (OMB) will have to review both the proposed and 
final rules. 

* FMCSA officials said it would be difficult to complete this procedure 
within the required 90 days. They said OMB review alone usual takes 90 
days. 

Objective 3: State Officials Told Us the Delay Has Hindered Their 
Ability to Acquire Revenues, and Thus Regulate Motor Carriers and 
Improve Safety Programs: 

The delay has hindered states' ability to acquire revenues and thus 
regulate motor carriers and improve safety programs, according to state 
officials we surveyed. 

Acquire revenues - 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. Because the 
old system expired and no new system took its place, states that 
collected fees under the old system have not yet been able to collect 
these fees during 2007. 

* For example, as of January 2007, Illinois had collected $129,211 in 
fiscal year 2007 motor carrier receipts, although normally it would 
have collected over $2 million by this time. 

* 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. 

State officials reported that this delay in receiving motor carrier fee 
revenue has also affected the ability to regulate motor-carrier 
activities and improve safety programs. 

Regulate motor carriers - Twenty-three of 28 states reported that the 
delay hindered their ability to regulate motor carriers, and 13 states 
indicated that this was a great or very great hindrance. 

* Washington state officials reported that Washington state has had to 
scale back its transportation regulation such as safety audits of 
commercial motor vehicles, drivers, and companies by approximately 20 
percent. 

Improve safety programs - Nineteen of 28 states reported that the delay 
hindered their ability to improve safety programs, and 9 states 
indicated that this was a great or very great hindrance. States also 
reported that the delay has moderately hindered their ability to 
improve the quality of safety programs. 

* Michigan officials stated that as a result of a projected shortfall 
of $4.2 million, state police had to curtail commercial motor vehicle 
safety and enforcement programs. 

Moreover, further delay could jeopardize safety and enforcement 
programs in certain states. 

For example: 

* Illinois has projected that it will not be able to pay for 64 highway 
safety employees if it does not receive its fiscal year 2007 revenues. 

* Louisiana officials stated that if replacement funding is not 
obtained within the next few months, the state will have to begin 
layoffs of highway enforcement agents. 

Some states are more affected than others. 

* Michigan reported that if replacement funding is not secured by July 
1, 2007, its entire enforcement including the federal Motor Carrier 
Safety Assistance Program, will likely shutdown. 

Enclosure I: Motor Carrier Industry Entity Definitions: 

Motor carrier - A person who operates a commercial motor vehicle in the 
interstate transportation of goods or passengers for compensation. 

Exempt for hire - A person who operates a commercial motor vehicle in 
the transportation of property or passengers exempt from economic 
regulation by the FMCSA, such as cotton and figs, for compensation. 

Motor private carrier - A person who uses a commercial motor vehicle to 
provide interstate transportation of property in which it has a 
property interest, including an owner, lessee, for the purpose of sale, 
lease, or rent or to further a commercial enterprise. 

Broker - A person, other than a motor carrier or an employee or agent 
of a motor carrier, who sells, offers for sale, negotiates for, or 
holds itself out for selling, providing, or arranging transportation by 
motor carrier for compensation. 

Freight forwarder - A person other than a carrier who provides 
transportation of property for compensation in the ordinary course of 
business. Freight forwarders assemble and consolidate shipments, assume 
responsibility for shipments from receipt to destination, but they use 
the services of others to provide actual carriage. 

Enclosure II: Timeline of Key Events: 

[See PDF for image] 

Source: GAO analysis of board and FMCSA data. 

[End of figure] 

Contact Information: 

GAO Contact: 

Kay Brown, (202) 512-2834, brownke@gao.gov: 

Staff Acknowledgments: 

Catherine Colwell, Samer Abbas, and Alex Lawrence made significant 
contributions to all aspects of this report. 

Note: After we provided this briefing, we continued our work through 
April 2007. 

Note: After we provided this briefing, the board and FMCSA resolved the 
issues related to the board's recommended fee structure. 

Note: After we provided this briefing, Texas officials informed the 
board that it would not host a registration Web site. 

Note: After we provided this briefing, FMCSA accepted a revised fee 
structure on April 2, 2007, and is drafting a Notice of Proposed 
Rulemaking to formally set the fees. In addition, the Texas Department 
of Transportation informed the board on April 17, 2007, that the state 
will not host the registration Web site. 

Note: After we provided this briefing, the board and FMCSA resolved 
these issues. When FMCSA accepted the revised fee structure on April 2, 
2007, it recognized that the board could charge fees to motor carriers 
operating in nonparticipating states. 

Note: After we provided this briefing, FMCSA informed the board that 
the 90-day period for setting fees based on the revised recommendation 
began on April 2, 2007. 

Note: After we provided this briefing, FMSA accepted the board's 
revised fee recommendation and informed the board that the 90-day 
period for setting fees based on the revised recommendation began on 
April 2, 2007. 

[End of section] 


(542103): 

FOOTNOTES 

[1] Current legislative proposals exist to temporarily reinstate the 
Single State Registration System. 

[2] We sought to interview all 15 board members and 7 agreed to meet 
with us. 

[3] The estimation of the number of affected entities required the 
board to filter data in FMCSA's Motor Carrier Management Information 
System to identify active motor carriers from which it could expect to 
collect a fee.The board found that this database contained over 700,000 
motor carriers, but was unreliable in part because it included inactive 
motor carriers. 

[4] The approximately $106 million in revenue is a sum of the $101 
million entitled to participating states that were part of the Single 
State Registration System, $5 million for administrative costs, and 
$500,000 to Oregon for joining the new system. 

[5] Power units are self-propelled motor vehicles and commercial motor 
vehicles are vehicles that are self-propelled or towed, such as 
trailers. 

[6] FMCSA interpreted SAFETEA-LU as permitting it to delay starting the 
90-day period allowed for fee setting until it believed the board 
provided a recommendation that sufficiently explains the basis for its 
fee proposal. It is unclear, however, if FMCSA's interpretation of the 
SAFETEA-LU 90-day fee-setting period is correct since SAFETEA-LU does 
not specifically authorize the Secretary of Transportation to delay 
this procedure. A 90-day period measured from when the board submitted 
its original fee recommendation on December 6, 2006, would have elapsed 
on March 6, 2007. FMCSA informed the board that the 90-day period for 
setting fees based on the revised recommendation began on April 2, 
2007. 

[7] The Motor Carrier Safety Assistance Program is a federal grant 
program that provides financial assistance to states to reduce the 
number and severity of accidents and hazardous materials incidents 
involving commercial motor vehicles. 

[8] Current legislative proposals exist to temporarily reinstate the 
Single State Registration System. 

[9] Some members of the board, however, told us that they were not 
aware of FMCSA's request for more information until the board's meeting 
in mid- January. 

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