Time for Change? Evaluating the Jurisdictional and Industry Benefits of a Full Reciprocity System in Commercial Vehicle Registration Jeremy Sage, Freight.

Time for Change?

Evaluating the Jurisdictional and Industry Benefits of a Full

Reciprocity System in Commercial Vehicle

Registration

Jeremy Sage, Freight Policy Transportation InstituteKenneth Casavant, Freight Policy Transportation InstituteCatherine Lawson, SUNY Albany

PNREC 2013May16th-17th 2013Spokane, WA

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The IRP is a registration reciprocity agreement among 48 U.S. states, D.C., and the 10 Provinces of Canada. The Plan provides for payment of apportionable fees on the basis of total distance operated in all jurisdictions.

Operators must register in their base jurisdiction and identify the various jurisdictions in which they will operate.

Sounds simple and straight forward……

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Today’s Current Process (Established in 1973)

First time New Registrants Carrier pays an apportioned fee based on estimated

distance…..still pretty simple. However, there is room for manipulation

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Today’s Current Process (Established in 1973)

Renewing Registrants If you are renewing in a jurisdiction for which you have

operated previously (within the last 18 months) You pay an apportionment based on the actual miles reported

(auditable) If you would like to add a jurisdiction that you have not

operated in, then you may estimate the distance you will travel. These estimated miles (not auditable) will be calculated with the actual miles, within 100%.

Still pretty simple….but able to be manipulated.

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Today’s Current Process (Established in 1973)

Renewing Registrants (continued)…calculating fees over 100%

If a carrier would like to add a jurisdiction for which they had accrued activity in more than 18 months ago, the fees for adding this jurisdiction will be over 100%.

If a carrier needs to add a jurisdiction after the start of the registration year, the fees for adding this jurisdiction will be over 100%.

….not so simple any more.

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Proposed Full Reciprocity Plan

New Registrants ALL use the base jurisdiction’s estimated distance charts.

No room for manipulation Granted Registration in all participating jurisdictions. States are appropriated in a consistent manner

Renewing Registrants No more Estimated Distances Over 100% fees are eliminated Fees paid on the basis of actual miles travelled only

…significantly simpler….but how will the jurisdictions and registrants fare?

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1st-yr Registrant – Current System

1st-yr Registrant – New System

Renewal under Current System

Renewal under Proposed System

Over 100% fees under the Current System

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So the Million Dollar Question becomes:

What financial changes will accrue to both the jurisdictions and the registrants if the new changes are implemented?

Only for New Registrants

EliminatedAltered

??

• How do these changes impact the registrants?

As the geographic variability of a fleet’s operation diminishes (little-to-no change in the jurisdiction’s in which registration is sought), the variance between the current fee process and the FRP also diminishes.

As the number of jurisdictions in which a fleet routinely registers increases, the impact of a change to the FRP process shrinks.

The FRP process frees carrier business expansion into new jurisdictions ‘on the fly’ as opportunity arises.

Eliminates need for adding jurisdictions at extra cost and/or obtaining relevant permits.

Actual Fee Costs changes depend on which jurisdictions they operate in.

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