The Oregon Employment Department intends to initiate formal proceedings to repeal an administrative rule prohibiting the application of the Oregon For-Hire Carrier Unemployment Tax Exemption to owner-operators that obtain their equipment through motor carrier- and motor carrier affiliate-sponsored equipment acquisition programs, sometimes referred to in the industry as “leaseback” arrangements. A taskforce comprised of industry players, with the advice and guidance of counsel and represented in large part by the Oregon and American Trucking Associations, advanced a vigorous and proactive effort to secure the repeal of the rule. The repeal of the rule is crucial to protect the long standing utilization of leaseback arrangements by Oregon motor carriers and owner-operators. The Employment Department resisted the efforts of the task force, but the Governor’s office ultimately intervened. The formal repeal of the administrative rule is expected to occur at the end of the next legislative session.
The Oregon For-Hire Carrier Unemployment Tax Exemption provides that the term “employment” excludes “transportation performed by motor vehicle for a for-hire carrier by any person that leases their equipment to a for-hire carrier and that personally operates, furnishes and maintains the equipment and provides services thereto.” ORS 657.047(2) (emphasis supplied). The soon-to-be repealed administrative rule defined the term “their equipment” to include only equipment “independently furnished by the service-provider, neither leased nor purchased from the for-hire carrier or from any entity affiliated with the for-hire carrier.” OAR 471-031-0200 (certified as effective on Dec. 13, 2010).
On August 1, 2011, the deadline for “large” motor carriers and other trailer fleet owners (those with 21 or more trailers) to seek delayed compliance with the Greenhouse Gas Emission Regulation (“GHG Regulation”) of the California Air Resource Board (“CARB”) passed. For any large motor carrier that did not seek to file a delayed compliance plan, the GHG Regulation requires, with very few exceptions, that each 2010 model year or older 53 feet or longer trailer operating in California must either be SmartWay Certified or must be retrofitted with fuel saving technologies by January 1, 2013. The effect of filing a delayed compliance plan was to allow carriers to stagger compliance (e.g., bring 20% of the California fleet into compliance per year until 100% compliance is reached on January 1, 2016), thereby avoiding a 100% compliance obligation on January 1, 2013.
It has come to our attention that a significant number of motor carriers may not have received notice of the passing of the deadline to file delayed compliance plans, or even that the filing of such plans was an option. The firm is investigating the potential for late-submittal of plans that would provide carriers that did not file with a staggered compliance option so as to avoid a 100% compliance requirement by January 1, 2013. If your company would be interested in investigating whether such relief is available, please do not hesitate to contact us. If your company maintains a trailer fleet of 20 or fewer trailers, the deadline for filing a delayed compliance plan is July 1, 2012. We have conferred with the American Trucking Associations, Inc and it has advised the firm it is sending out alerts and working through this issue with its experts to possibly obtain relief on the deadline problem. It concurs with the firm that preparing and submitting a proper filing immediately is a prudent step despite the passage of the deadline.
If the California Air Resources Board adopts the recommendation of its staff, it will not extend the seven-year legal life of 2004-model transport refrigeration units (TRUs), which is set to expire on December 31. Fleets and trucking associations requested that the ’04 TRUs be allowed to run for up to ten years, but CARB’s staff advised against any extensions, stating that soot pollution from the units is “unacceptably high” at grocery distribution centers located near residential neighborhoods.
Update to Feb. 16th post:
On May 6th, the Federal Motor Carrier Safety Administration ("FMCSA") reopened the Hours Of Service (“HOS”) comment period, which previously closed on March 4, 2011. While it did not say how long this new comment period would stay open, the FMCSA did say that this action was meant to allow for the review of four newly presented fatigue studies. It looks like industry groups, including the American Trucking Association, are skeptical about these new studies – viewing them as likely an 11th hour ploy generated by the FMCSA to prop up the proposed changes.
In August of 2011, the Federal Motor Carrier Safety Administration will ask a panel of advisers for recommendations on how it might deal with the concern of sleep apnea in truck drivers. The FMCSA has scheduled an August meeting between its Medical Review Board (which has recommended tougher regulations) and its Motor Carrier Safety Advisory Committee, a panel of 19 officials from the industry, including the enforcement community and labor and safety advocacy groups. A public meeting is tentatively scheduled for August 29, 2011, in the Washington, D.C. area. The agency will consider the committee's recommendations in deciding whether or not to move forward with a rulemaking.
Rob Abbott, vice president of safety policy at American Trucking Associations, applauded the move stating that there is confusion in the medical community about sleep apnea because the Medical Review Board made recommendations several years ago and the agency has not yet acted on them.
The Medical Review Board's recommendations on several driver health concerns can be found at
www.fmcsa.dot.gov.
A bill introduced to the Senate on Thursday could put an end to the federal freeze on changes in truck sizes and weights. If passed, the bill would permit states to allow 97,000-pound, six-axle rigs on their highways.
The Safe and Efficient Transportation Act (SETA) is cosponsored by Sens. Mike Crapo (R-Idaho), Herb Kohl (D-Wis.), Susan Collins (R-Maine) and Rob Portman (R-Ohio).
Similar to companion legislation pending in the House of Representatives, SETA gives each state the option to selectively raise interstate weight limits from 80,000 pounds to up to 97,000 pounds. The higher limit applies only to vehicles equipped with six axles instead of the typical five. The additional axle does not affect truck size, but it does allow shippers to safely use extra cargo space while maintaining, or improving, all safety and handling characteristics.
Idaho currently allows for 97,000-pound loads under special permitting and axle options. The SETA bill would allow other states the same option if axles are added to maintain safety and weight standards. Under present law, trucks heavier than 80,000 pounds are forced off the Interstate and onto local roads in some states.
The American Trucking Associations (ATA) estimates that the trucking industry will haul 30 percent more tonnage in 2021 than it does today. If current weight restrictions remain the same, ATA estimates that our economy will require 18 percent more trucks on the road driving 27 percent more miles than they do now. SETA would help correct this imbalance by allowing shippers to safely reduce truckloads, fuel, emissions and vehicle miles traveled for each ton of freight shipped.
However, the bill might also force companies to purchase new equipment to remain competitive.
According to FMCSA Administrator Anne Ferro, Mexican trucks will temporarily be equipped with electronic recorders. Ferro states that this is the only way the FMCSA can ensure that the trucks are monitored.
Ferro, who spoke to trucking executives gathered during the annual meeting of the Truckload Carriers Association, acknowledged that the subject has been a flashpoint among carriers who do not support the idea of the U.S. spending taxpayer money on equipment for Mexican trucks.
She explained that under the North American Free Trade Agreement ("NAFTA"), the U.S. cannot require Mexican carriers to do anything that U.S. carriers are not required to do, but the agency still must provide a way to monitor those carriers for compliance with both the hours of service rules and the cabotage rules that restrict freight hauling between points in the U.S.
That program cost about $250,000 and the budget for the EOBR program is between $500,000 and $700,000, she said.
FMCSA's decision to install the electronic monitors is in light of the agreement to reopen the border to long-distance trucking is key to getting Mexico withdraw the more than $1 billion in tariffs it has levied on U.S. producers in retaliation for shutting down the prior program.
Ferro said the agency will publish its proposal for the border opening in a matter of weeks. At that point the public will have a chance to comment, before the deal is made final.
Border Program Concept
The concept for the border opening envisions a reciprocal, phased-in program, in which Mexico initially will reduces its tariffs by half. The rest of the tariffs would be suspended when the first Mexican carrier is granted operating authority.
The concept contains three elements: pre-operations vetting, monitoring of operations and communications to the public and Congress. Neither hazmat carriers nor buses would be permitted.
Pre-operations vetting would include an application process in which the number of participants in the first phase of the program would be limited to ensure oversight, subject to agreement with Mexico.
Included in the vetting would be are a pre-authority safety audit in which the agency would review the Mexican carrier's safety management program and the records of drivers who would be crossing the border, including their Mexican federal and state records. The drivers would be tested for English proficiency and knowledge of U.S. traffic laws. Mexican carriers' safety performance in Mexico would be reviewed, and the audit would include inspections of the trucks for U.S. safety and emissions compliance.
The "operations" component of the Border Program Concept provides for inspections - including inspections every time a truck crosses the border, for a period of time to be negotiated - and reviews to follow up on the initial screening review. A Mexican carrier would need to clear a Compliance Review and earn a Satisfactory Safety Rating in order to get full operating authority. Also, the FMCSA could conduct compliance reviews of Mexican drug and alcohol testing facilities.
The Federal Motor Carrier Safety Administration ("FMCSA") published a notice advising it will extend the HOS comment period to March 4 from February 28. The additional time is to allow for review of addition documentation recently submitted to the public document by the Agency.
FMCSA placed three additional documents in the public docket concerning hours of service ("HOS") for commercial motor vehicle drivers. This notice calls attention to the three supplemental documents that FMCSA has placed as electronic files in the docket:
~ FMCSA-2004-19608-6147 - Response to January 28, 2011, Request from American Trucking Associations, Inc. for Further Information on the Cumulative Fatigue Function Used in Docket Item Number FMCSA-2004-19608-4116 Titled "2010-2011 Hours of Service Rule Regulatory Impact Analysis for the Proposed Hours of Service (HOS) of Drivers Rule, December 20, 2010"
~ FMCSA-2004-19608-6147.1 - An Excel Spreadsheet presenting the information requested by ATA: coefficient estimates, an explanation of the coefficient names, and the formulas for the cumulative fatigue function used in Chapter 4 of the Regulatory Evaluation for the HOS NPRM, and displayed graphically in Exhibit 4-14 of that document.
~ FMCSA-2004-19608-6147.2 - An Excel Spreadsheet containing a column of data using the formula in the HOS Regulatory Evaluation to link the hours
worked in the previous week to fatigue the following week.
House Budget Committee Chairman Hal Rogers began this year's budget process with a plan that includes a 17 percent cut for highway and housing programs. Rogers said that the $74 billion in overall cuts his committee envisions constitute a responsible and prudent level of funding for the rest of the fiscal year. It is not yet clear, however, how the cuts would affect transportation.
The budget authority cuts Rogers is proposing might not touch the federal highway program or truck safety programs because they are not in the discretionary budget, said Jack Basso, chief operating officer of the American Association of State Highway and Transportation Officials. Nevertheless, Congress has a long way to go before a decision is made.
The government is operating on a continuing resolution that expires March 4.
A new study released this week by the National Employment Law Project (“NELP”), a union advocacy coalition, Change to Win, and Rutgers University charges motor carriers with misclassifying more than 110,000 port truck drivers as independent contractors, as opposed to employees. The release of this study comes on the tails of a call to action by the American Trucking Association regarding Senate Bill 3786, the Fair Playing Field Act of 2010, as an offset for the 9/11 Health and Compensation Act. The Bill targets the use of independent contractors and requires the treasury to release guidelines to help clarify the status of individuals as independent contractors or employees for the purpose of federal employment taxes.
The NELP study, based on surveys from drivers at seven major ports, including Seattle, Oakland, Los Angeles, Long Beach, New York and New Jersey, estimated that approximately 82% of port truck drivers are treated as independent contractors. The study criticizes the use of the independent contractor model, claiming, in part, drivers classified as independent contractors earned, on average, 18% less than employee drivers, are asked to use illegal and unsafe equipment, and face health problems imposed by high concentrations of diesel emissions.
The NELP study recommends that (1) policymakers adopt uniform rules requiring motor carriers to employ drivers to operate company owned equipment; (2) Congress pass the Clean Ports Act of 2010 to empower port authorities to attach misclassification; (3) the DOL, IRS, and state agencies take coordinated action to end misclassification; and (4) federal, state, and local governments create incentive funds for diesel emissions reduction contingent on proper classification.
The American Trucking Associations ("ATA") continues to press the Federal Motor Carrier Safety Administration ("FMCSA") on CSA crash accountability. In our previous post dated June 24, 2010, we noted that one of the concerns voiced by the ATA about the current CSA system was that accidents enter the system without the recognition of fault. Dave Osiecki, senior vice president of policy and regulatory affairs at ATA, sent a letter to the FMCSA this week requesting the agency remove the following types of crashes from the safety measurement system: crashes involving a vehicle traveling in the wrong direction; crashes involving a vehicle rear-ending a truck while legally stopped at a traffic light; crashes involving a vehicle striking a truck while legally parked off the road; and documented suicides. According to Osiecki, these types of crashes should be removed as a matter of agency policy because it is reasonable to presume that the commercial driver and carrier in these types of crashes have no accountability for the crash.
A hearing was held yesterday on the Federal Motor Carrier Safety Administration's ("FMCSA") new enforcement program, CSA 2010. While there is general support for the program, some of the concerns deal with timing, data quality and funding. For example, one concern voiced by Keith Klein, executive vice president and chief operating officer of Transport Corporation of America, who spoke on behalf of the American Trucking Associations, was that under the FMCSA's current CSA 2010 system, accidents enter the system without the recognition of fault. In other words, there is no way to recognize the difference between preventable and non-preventable accidents. In response, Ann Ferro, the agency's chief, emphasized that crash data are a legitimate indicator of a motor carrier's safety performance regardless of fault. She went on to say, however, that the agency recognizes the problem of crash accountability and will analyze the data if the carrier's safety fitness rating comes into question.
On Wednesday, February 24th, the Ninth Circuit issued an opinion declining to direct the District Court to issue an injunction against 8 aspects of the Port of Los Angeles concession agreement implemented as part of its Clean Truck Program. The expansion of the previously issued injunction was requested by the American Trucking Associations and challenged those elements of the concession agreement not previously enjoined by the District Court; it did not challenge those aspects of the Clean Truck Program that are intended to improve air quality. This Ninth Circuit opinion did not involve the previously issued injunction that prohibits the Port of Los Angeles from enforcing an owner-operator ban, meaning that Los Angeles remains prohibited from enforcing the owner-operator ban. This most recent decision does vacate the District Court order which had allowed enforcement of a placarding requirement that was contained in the concession agreement, but otherwise, the ruling had little impact on drayage operations at the port. The District Court conducted its hearing on the parties’ summary judgment motions on Thursday, February 25th, and an order on those motions is expected shortly. In is anticipated, however, that the order will preserve most issues for trial on the merits which is set to commence April 20th.
The Federal Motor Carrier Safety Administration has extended the Dec. 17 deadline for compliance on its "roadability" rule for intermodal container chassis to June 30, 2010, according to the American Trucking Associations.
The extension applies to Intermodal Equipment Provider (IEP), motor carrier and driver compliance with the Driver Vehicle Inspection Report recordkeeping requirements. It does not, however, apply to FMCSA inspection, repair and maintenance requirements.
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