Fees for the Unified Carrier Registration Plan and Agreement

AGENCY:

Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).

ACTION:

Final rule.

SUMMARY:

FMCSA amends the regulations governing the annual registration fees that participating States collect from motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies for the Unified Carrier Registration (UCR) Plan and Agreement for the 2025 registration year and subsequent registration years. Following a reduction in fees of an average of 37.3 percent over the two prior years, the fees for the 2025 registration year will be increased above the fees for the 2024 registration year by an average of 25 percent overall, with varying increases between $9 and $9,000 per entity, depending on the applicable fee bracket. The final rule is based upon a recommendation from the UCR Plan.

DATES:

Effective date: July 17, 2024.

Petitions for reconsideration of this final rule must be submitted to the FMCSA Administrator no later than July 17, 2024.

FOR FURTHER INFORMATION CONTACT:

Mr. Kenneth Riddle, Director, Office of Registration and Safety Information, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, FMCSA-MCRS@dot.gov. If you have questions on viewing or submitting material to the docket, call Dockets Operations at (202) 366-9826.

SUPPLEMENTARY INFORMATION:

FMCSA organizes this final rule as follows:

I. Availability of Rulemaking Documents

II. Executive Summary

A. Purpose and Summary of the Regulatory Action

B. Costs and Benefits

III. Abbreviations

IV. Legal Basis for the Rulemaking

V. Discussion of Proposed Rulemaking and Comments

A. Proposed Rulemaking

B. Comments and Responses

C. Final Rule

VI. Section-by-Section Analysis

VII. Regulatory Analyses

A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563 (Improving Regulation and Regulatory Review), E.O. 14094 (Modernizing Regulatory Review), and DOT Regulatory Policies and Procedures

B. Congressional Review Act

C. Regulatory Flexibility Act

D. Assistance for Small Entities

E. Unfunded Mandates Reform Act of 1995

F. Paperwork Reduction Act

G. E.O. 13132 (Federalism)

H. Privacy

I. E.O. 13175 (Indian Tribal Governments)

J. National Environmental Policy Act of 1969

I. Availability of Rulemaking Documents

To view any documents mentioned as being available in the docket, go to https://www.regulations.gov/docket/FMCSA-2023-0268/document and choose the document to review. To view comments, click this final rule, then click “Browse Comments.” If you do not have access to the internet, you may view the docket online by visiting Dockets Operations at U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. To be sure someone is there to help you, please call (202) 366-9317 or (202) 366-9826 before visiting Dockets Operations.

II. Executive Summary

A. Purpose and Summary of the Regulatory Action

Under 49 United States Code (U.S.C.) 14504a, the UCR Plan and the 41 States participating in the UCR Agreement collect fees from motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies. The UCR Plan and Agreement are administered by a 15-member board of directors (UCR Plan Board), which is comprised of 14 members appointed from the participating States and the industry, and the Deputy Administrator of FMCSA, who is a statutory member. Revenues collected are allocated to the participating States and the UCR Plan.

In accordance with 49 U.S.C. 14504a(d)(7)(A)(ii) and (f)(1)(E)(i), the UCR Plan provides fee adjustment recommendations to the Secretary of Transportation (Secretary) when revenue collections result in a shortfall or surplus from the amount authorized by statute. If the required payments to the States and the cost of administering the UCR Plan exceed the amount in the depository, the UCR Plan must collect additional fees in subsequent years to cover the shortfall (49 U.S.C. 14504a(f)(1)(E)(i)). If there are excess funds after payments to the States and for administrative costs, they are retained in the UCR Plan's depository, and fees in subsequent fee years must be reduced as required by 49 U.S.C. 14504a(h)(4). These two distinct statutory provisions are recognized in the fee adjustment recommended by the UCR Plan and adopted in this final rule to increase, by an average of 25 percent, the annual registration fees established pursuant to the UCR Agreement for the 2025 registration year and subsequent years.

B. Costs and Benefits

The changes in this final rule increase the fees paid by motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies to the UCR Plan and the participating States. These fees are considered by the Office of Management and Budget (OMB) Circular A-4, Regulatory Analysis, as transfer payments, not costs. Transfer payments are payments from one group to another that do not affect total resources available to society. Therefore, transfers are not considered in the monetization of societal costs and benefits of rulemakings. Despite the classification of fees as transfer payments, the Agency acknowledges that motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies will incur a greater burden as a result of this fee increase.

III. Abbreviations

ACH Automated Clearing House

CE Categorical Exclusion

CFR Code of Federal Regulations

DOT Department of Transportation

E.O. Executive Order

FMCSA Federal Motor Carrier Safety Administration

FR Federal Register

NAICS North American Industry Classification System

NPGA National Propane Gas Association

NPRM Notice of Proposed Rulemaking

OMB Office of Management and Budget

PIA Privacy Impact Assessment

PTA Privacy Threshold Assessment

RFA Regulatory Flexibility Act

SBA Small Business Administration

SBREFA Small Business Regulatory Enforcement Fairness Act of 1996

SBTC Small Business in Transportation Coalition

Secretary Secretary of Transportation

UCR Unified Carrier Registration

UMRA Unfunded Mandates Reform Act

U.S.C. United States Code

IV. Legal Basis for the Rulemaking

This rulemaking adjusts the annual UCR registration fees, as authorized by 49 U.S.C. 14504a. Section 14504a provides that the revenues collected from the fees should not exceed the maximum annual revenue entitlements distributed to the 41 participating States plus the amount established for administrative costs associated with the UCR Plan and Agreement. The UCR Agreement is an interstate agreement (as so defined in 49 U.S.C. 14504a(a)(8)) entered into by 41 participating States in accordance with the provisions of 49 U.S.C. 14504a(e)(1) and (2). The statute provides for the UCR Plan to ask the Secretary to make an adjustment within a reasonable range when the annual revenues are insufficient to provide the revenues to which the participating States are entitled (49 U.S.C. 14504a(f)(1)(E)(i)).

In addition, 49 U.S.C. 14504a(h)(4) states that any excess funds from previous registration years held by the UCR Plan in its depository, after distribution to the States and for payment of administrative costs, shall be retained and the fees charged shall be reduced by the Secretary accordingly.

The UCR Plan must also obtain DOT approval to revise the total revenue to be collected, in accordance with 49 U.S.C. 14504a(d)(7). However, no changes in the revenue allocations to the participating States were recommended by the UCR Plan in accordance with 49 U.S.C. 14504a(g)(4) and therefore, no changes have been authorized by this rulemaking.

The Secretary also has broad rulemaking authority in 49 U.S.C. 13301(a) to carry out 49 U.S.C. 14504a, which is part of 49 U.S.C. subtitle IV, part B. Authority to administer these statutory provisions has been delegated to the FMCSA Administrator by 49 CFR 1.87(a)(2) and (7).

The two revised and new sections in this final rule work in concert to adjust the applicability of an existing requirement and impose a new requirement and are therefore not severable. This is so because if the increased fees for 2025 in new 49 CFR 367.50 were to be set aside, then the existing fee levels in 49 CFR 367.40 must remain in effect to provide funds to allow the participating States to receive their statutory revenue entitlements during 2025. While the 2024 fees would not be sufficient to fully cover the 2025 State statutory entitlements and administrative costs, that revenue would be necessary to provide at least some portion of the statutory entitlements due to participating States.

V. Discussion of Proposed Rulemaking and Comments

A. Proposed Rulemaking

On January 9, 2024, FMCSA published in the Federal Register an NPRM titled “Fees for the Unified Carrier Registration Plan and Agreement” (89 FR 1053; see also Docket No. FMCSA-2023-0268). The NPRM proposed amending regulations for the annual registration fees States collect from motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies for the UCR Plan and Agreement for the 2025 registration year and subsequent registration years. The fees for the 2025 registration year were proposed to be increased from the fees for 2024 by approximately 25 percent overall, with varying increases between $9 and $9,000 per entity, depending on the applicable fee bracket. The fee increases will produce revenues of $13 million that will enable the UCR Plan to provide the funds for the State revenue entitlements by covering the shortfalls in revenues resulting from decreases in the fees the prior two registration years, which averaged 37.3 percent. The proposal was based upon a recommendation from the UCR Plan.

B. Comments and Responses

FMCSA requested public comments concerning the NPRM for 30 days ending February 8, 2024. By that date, 66 unique comments were received. Three comments were submitted by trade associations: the National Owner Operators Association; the National Propane Gas Association (NPGA), and the Small Business in Transportation Coalition (SBTC). Two comments were erroneously added to the docket and were withdrawn, as they addressed issues pertaining to a different rulemaking. Sixty small motor carriers and individuals (many of them anonymous) submitted comments. The UCR Plan submitted a comment responding to the issues raised by the comments of SBTC.

General Questions

Comments: Many commenters posed questions about the UCR fee, its purpose, and rationale behind the increase. For instance, an anonymous commenter claimed that the NPRM and supporting documents published in the docket “do not explain to what end the money is used” beyond the fact that the UCR's allocated reserves have been depleted. The commenter further noted that the structure of decreasing and increasing fees, or “see-sawing of the tax,” as the commenter described, is not very clear. Another commenter suggested there should be a maximum percentage change in the fee that the UCR Plan can implement.

FMCSA Response: UCR fees are used by participating States for motor carrier safety programs and enforcement, or the administration of the UCR Plan and UCR agreement (49 U.S.C. 14504a(e)(1)(B)). When each of the participating States joined the UCR Agreement, the statute required them to submit to FMCSA a State plan that, among other matters, demonstrates that an amount at least equal to the revenue derived by the State from the UCR agreement shall be used for those motor carrier safety programs and enforcement, or the administration of the UCR Plan and UCR agreement (49 U.S.C. 14504a(e)(1)(B)). The statute also gives primacy to the need to set the fees at a level that ensures that each of the participating States receive the revenues to which they are entitled (49 U.S.C. 14504a(f)(1)(E)(i) and (g)(4)). The adjustment in the fees to be paid to the UCR Plan for distribution to the participating States is necessary to accomplish this statutory objective.

FMCSA believes this upward adjustment is within a reasonable range, in accordance with the provisions of 49 U.S.C. 14504a(e)(1) and (2). This adjustment to the 2025 registration year provides the required $13 million in revenue allocations to the participating States and the UCR Plan. Any amount short of these adjustments would impede proper operations of motor carrier safety programs, enforcement, or the administration of the UCR Plan and UCR agreement. The Agency notes the rare occurrence of this upward adjustment, which has only previously occurred once, over a decade ago. This upward adjustment, an approximately 25 percent increase, follows two years of reductions in fees affecting the 2023 and 2024 registration years, averaging a 37.3 percent decrease in fees, as well as steady, unmodified collections from 2010 to 2017. The Agency believes this recalibration of fees is reasonable and in accordance with the structure of, and obligations created by, the statute.

Timing of the Fee Increase

Comments: Many commenters viewed the increase in fees as unwarranted and unexpected, and explained the UCR Plan should be adjusting its own budget and spending instead. An anonymous commenter expressed confusion over the increase, claiming that the fees were intended to be eliminated “after full reciprocity.” A different anonymous commenter connected this increase to the UCR Plan's poor budgeting, while another suggested the UCR Plan's spending should be cut instead.

FMCSA Response: FMCSA disagrees with the commenters' statements that the fee increase was unwarranted, unpredictable, and sudden. In a previous rulemaking published in March 2023 (and finalized in June 2023), FMCSA stated it anticipated the UCR Plan would recommend an upward adjustment in the fees for the 2025 registration year to comply with the statutory provisions discussed herein. By statute, the UCR fee is authorized for annual adjustment by FMCSA, either to increase or decrease the fee to ensure adequate funds to provide participating States with their revenue entitlement.

FMCSA also disagrees that the UCR Plan has not been operating within its budget. To FMCSA's knowledge, the UCR Plan has operated within its approved budget and in recent years has steadily decreased registration fees. In fact, this is the first upward adjustment since 2010. The UCR Plan's approved allocation for the costs of administration of the Plan and Agreement over the last several years decreased from $5 million per year and is now at $4.25 million. For these reasons, FMCSA declines to modify the final rule in response to the commenters' suggested changes.

Finally, the commenter who stated that the registration fees would be removed “after full reciprocity,” did not provide sufficient information for FMCSA to understand or provide a response on this issue. In any event, removal of the fees would require Congress to amend the statute.

Delaying or Reconsidering the Fee Increase

Comments: Twenty-eight commenters either objected to the increase altogether, expressed criticism towards this proposal, or asked FMCSA to reconsider it. Among those objecting to the increase altogether, six commenters described the UCR fee and the proposed percentage increase as “unnecessary, unjustified, frivolous, and unethical,” while others called it “fraudulent, unconstitutional, and discriminatory.”

An anonymous commenter questioned the motives behind the UCR fees, stating that the purpose for the increase is to create a “slush fund” for FMCSA. Some other commenters asked the Agency to reconsider the proposal to issue the increase until truckers' compensation is increased. One commenter recognized that, while raising fees may be necessary, the percentage is too high, making the increase “difficult to absorb.” An anonymous commenter suggested looking into fee decreases instead.

FMCSA response: FMCSA appreciates the concerns and frustrations expressed by commenters opposed to the fee increase being adopted. The purpose of this fee increase is to cover the $13 million shortfall in the statutorily-required funding, because in 2025 making the required distributions to the States and providing for the cost of administering the plan and will exceed the revenues expected under the current fee levels. Although FMCSA must approve the fee levels for each registration year, FMCSA does not collect these fees and the money does not go into the Agency's budget. Rather, the fees are collected and administered by the UCR Plan. In past years, as required by the statute, these fees were decreased because of excess collections and in effect returned to the industry.

Despite this increase, the proposed fees are still lower than those that were in effect in registration years 2019 through 2022. For instance, carriers in the smallest fee bracket ( i.e., carriers with two vehicles or fewer), brokers, and leasing companies paid a fee of $62 in the 2019 registration year and $68 in the 2020 registration year, which is significantly higher than the proposed fee for 2025 of $46, even before accounting for inflation. Similarly, the fee for carriers in the highest fee bracket ( i.e., carriers with 1,001 vehicles or more) in 2019 was $59,689, rising to $66,072 in 2020. Again, the fee proposed for the 2025 registration year, $44,836, is well below those previous amounts.

The commenter who contended that the increase was discriminatory provided no evidence of specific incidents of discrimination or any other information to support this claim, and based on all the available information, FMCSA disagrees that it targets or discriminates against any registrant. The percentage increase is evenly applied across six fee brackets that correspond to a motor carrier's fleet size, as permitted by statute and regulation.

For the reasons described above, and because of the statutory requirement to secure revenue entitlements to the participating States, FMCSA declines to delay the fee increase or modify the percentage of the fee increase, as this would result in the revenues falling short of meeting the statutory requirement.

Reconsidering the UCR Plan's Fee Calculation Methods

Comments: In its public comment, NPGA stated that the “2025 Fee Schedule Proposal” document published in the docket does not provide sufficient data for proper review. They noted that the UCR Plan has used two different methods of calculating fees: one relying on the minimum of the monthly collections over the past three authorized closed registration years, and the other on the “average” method for the 2023 and 2024 registration years. NPGA suggested returning to the “average” method, which resulted in surplus collections in previous years, or a “different intermediate method,” rather than the minimum method, as proposed in the UCR Plan's recommendation. NPGA also requested an analysis demonstrating that FMCSA is “right-sizing” costs.

FMCSA Response: NPGA's comment concerns the method used to estimate the amount of additional revenues the UCR Plan will receive during the last several months of the fee collection period for registration year 2023, which are August 2023 to December 2024. As stated in the fee recommendation submitted by the UCR Plan, until its 2023 fee recommendation, the UCR Board had made fee collection projections for the remaining collection period based on the minimum monthly collections for the same period during the past three closed registration years. According to the UCR Plan, this method consistently resulted in an underestimation of projected collections. The UCR Plan Board therefore decided to project collections using an average method in its recommendations for the 2023 and 2024 registration years. However, the average method resulted in an overestimation of projected collections compared to actual collections for the 2023 registration year. Further, the UCR Board's analysis of the most recent registration years results indicated an increased risk of overestimation of projected collections using the average method. Therefore, the UCR Board voted at its July 27, 2023, meeting to return to the minimum method of projected collections in the fee recommendations for the 2025 registration year and future years. In its fee recommendation, the UCR Plan estimated using this method that it will receive an additional $5.26 million in fee revenue for registration year 2023 between August 2023 and December 2024. This amount is added to the actual amounts collected until July 2023, to produce a total revenue collection for registration year 2023 of $92.9 million.

FMCSA believes that this return to the minimum method of estimating future collections as part of its fee recommendation is reasonable. The Agency has no reason to question the UCR Plan's assessment that this method would avoid increased risk of overestimation of projected collections. A detailed calculation of the revenue estimate (including a projection using the minimum method) is also available in the docket for this rulemaking.

Small Business Concerns

Comments: A group of 21 individual commenters, including several small owner-operators, expressed concerns about the effect of the fee increase on the ability for small businesses to continue operating. They explained that “mom and pop” businesses are already struggling to keep their doors open and this increase would exacerbate their struggles. To further illustrate their concerns, several commenters explained that other costs have increased, including maintenance, insurance, fuel, and other registration fees, while their rates and income have proportionally decreased. An individual commenter also expressed concerns over the longevity of small businesses, adding that this increase would contribute to the trucker shortage issue in the country, causing disruptions in the supply chain.

FMCSA response: Even for small carriers, the fee increase will amount to a minimal percentage of each carrier's income. Those in the smallest bracket (1-2 vehicles) will pay $9 more for an annual registration in 2025 than in 2024, and those in the next bracket (3-5 vehicles) will pay $27 more. Due to the structure of the fee brackets, when spread across a carrier's fleet the annual increase ranges from approximately $9 per vehicle for a motor carrier with the fewest number of vehicles in its fee bracket (for example, an owner-operator in the smallest fee bracket registering a single vehicle or a motor carrier in the largest fee bracket registering 1,001 vehicles). On the other hand, the increase ranges to less than $1 per vehicle on average for carriers at the upper bounds of a bracket (for instance, a carrier in the next-to-largest fee bracket registering 999 vehicles). Regardless of the size of a carrier, this fee increase will likely represent, and be offset by, a very small percentage of annual revenue, and as such is not expected to impact the viability and longevity of motor carriers' operations.

As required by the Regulatory Flexibility Act (5 U.S.C. 601 et seq., RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), FMCSA has considered the effects of the regulatory action approved in this final rule on small businesses and other small entities and to minimize any significant economic impact. The analysis for this consideration is set out below in the Regulatory Analysis in section VIII.C. Based on this analysis, FMCSA has concluded and is certifying that this final rule would not have a significant economic impact on a substantial number of small entities, because the fee increase is less than one percent of the revenues or costs of small motor carriers and other small entities.

Increase Is Not Beneficial to Consumers

Comments: While many commenters expressed the opinion that this rulemaking is not beneficial to the trucker or motor carrier, others drew attention to how the rulemaking would affect the consumer. Eight individuals explained the fee increase would subsequently trickle down to the consumer whose purchasing power may be affected. An anonymous commenter added that the solution to offset the increase by passing the increase down to the consumer is unreasonable as the increase will affect everyone (carriers and consumers). The commenter added “as a one-truck owner, I don't `transfer' this amount to anyone. I have to pay it.” An individual commenter added that although “this increase is not a major rule, it will increase the cost of products and services.”

FMCSA response: While FMCSA recognizes that any fee adjustment may affect the cost of doing business, the increase in this rule is statutorily mandated. Moreover, while many commenters are concerned about the percentage increase (of 25 percent) to the annual registration fees, the actual dollar amount of the increase is unlikely to cause significant downstream effects. As discussed above, the fees would range from a maximum of $9 per vehicle registered on average to less than $1 per vehicle registered on average, depending on the motor carrier's fee bracket and the relative size of each carrier's fleet within that bracket. Thus, the cost passed along to consumers is expected to be minimal, amounting in most cases to a few cents per load.

Negative Effect on the Economy

Comments: Besides the commenters' concerns over the effect of the increase on the carriers and consumers, others stated that the current economic climate cannot support this type of fee adjustment. Three commenters added that this rulemaking would affect the economy as a whole. One commenter stated that the proposal was an attempt to “cripple the economy and increase inflation.”

FMCSA response: As described above, while the percentage increase may appear high to some commenters, the amount of the increase is unlikely to have a material effect on the economy. When viewed on a per-vehicle basis, the increases do have a greater impact on carriers at the lower end of each fee bracket than on those at the higher end. However, the UCR registration fee for 2025 will be, at most, be approximately $9 more than the prior year for each vehicle in a carrier's fleet on average if the carrier is among the smallest in its respective fee bracket. The increase would be far less on a per-vehicle basis for carriers in the middle or upper range of their fee bracket. Therefore, as long as a carrier's annual average revenue per vehicle is at least $900, the increase would have an overall impact of less than 1 percent of the carrier's average annual revenue. Moreover, the fees under this rule are still less than the fees charged in recent years. The historically low fees in the last UCR fee rule (establishing 2024 fees) were required to address excess revenues; but returning the fees to an upward adjusted amount is not reasonably expected to impact inflation or the larger economy. FMCSA also reiterates that the increase is not discretionary; rather, the UCR fee adjustments are made pursuant to a statutory mandate.

The National Owner Operators Association's Opposition to the Fee Increase

Comments: The National Owner Operators Association stated that the “UCR fee is a duplicative tax” which should be eliminated, indicating this rulemaking is proof of “taxation without representation.” They added that FMCSA should revisit its budget and issue a refund for any existing surplus to businesses the Agency regulates.

FMCSA Response: As discussed above, the fees collected by the UCR Plan (none of which are paid or otherwise go to FMCSA) are mandated by a statute enacted by Congress that has been in effect since 2005. Any change or elimination of the program would require further action by Congress.

SBTC's Comment Objecting to the Fee Increase

Comments: SBTC objected to the fee increase proposal and questioned the legal authority of the UCR Plan to invest motor carrier fee money due to the States. In addition, SBTC contended that the earnings from the reserve accounts should be applied to reduce the 25 percent fee increase or by using the UCR's reserve funds to offset the fee increase, leaving the 2024 fees in effect for 2025, or significantly reducing the proposed increase amount. SBTC also contended that the convenience fee charged by the UCR Plan when registrants use a credit card or an automated clearing house (ACH) transaction to pay registration fees should be borne by the UCR Plan. An individual motor carrier commenter supported SBTC's recommendation that the UCR Board find an alternative revenue source to offset the increase, which would not require the carriers to pay more.

1. The UCR Plan's Authority To Establish Reserve Funds

SBTC commented that the UCR Plan has invested its funds in various investment accounts for the purposes of creating reserves, which SBTC characterized as “slush funds.” SBTC added that it found no directive, statutory authority, or regulatory permission for the UCR Plan to engage in such activities for their self-enrichment. In response to SBTC's comments, the UCR Plan submitted a detailed response setting out its authority under the statute to administer the UCR Plan and Agreement, including the responsibility to provide funds to recognize the timing of revenue receipts, and for use in case of revenue shortfalls or similar circumstances. These additional funds are intended to sustain the UCR Plan's operations. The UCR Plan also added that, in a previous rulemaking, FMCSA had “recognized the prudence and appropriateness of the reserve funds.” Moreover, the UCR Plan explained its responsibility to provide for its consistent and continuous operation, which partly entails providing sufficient reserve funds. It stressed the importance for such reserve funds to be available for use in emergencies, as they sustain the financial operations of the UCR Plan and explained that the availability of reserve funds is prudent, appropriate, and consistent with the UCR Plan's statutory obligation to administer the UCR Plan and Agreement. The UCR Plan also explained in depth how, contrary to SBTC's assertions, the interest earned by the reserve accounts was already being used to provide funds either for the revenue allocations for the participating States or to pay a small portion of the Plan's administrative costs, thus reducing the amount of additional revenues required from the recommended adjustment.

FMCSA Response: The issue SBTC raised was considered and addressed by FMCSA in a previous final rule adopting fees for registration year 2023. After thorough consideration, FMCSA recognized the prudence and appropriateness of these reserve funds, finding that ensuring the availability of reserve funds to meet possible contingencies is an appropriate action for the UCR Plan Board to take in implementing the statute.

The UCR Agreement is an interstate agreement with the purpose of coordinating the registration and collection of fees and information from motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies, whose commercial vehicles are engaged in interstate commerce. The Board of Directors of the UCR Plan is tasked by statute with administering the UCR Agreement. This responsibility requires the UCR Plan Board to provide for the consistent and continuous operation of the UCR Plan. Part of fulfilling that responsibility entails providing sufficient reserve funds to enable the UCR Plan and its National Registration System to operate without interruption in the unanticipated event of a significant unbudgeted increase in operating expenses and/or decrease in operating revenues.

An example of the need for reserve funds arises from a provision of the statute that states that revenues collected may not be used to pay administrative costs until all the participating States have received all their revenue entitlements (49 U.S.C. 14504a(h)(3)(B)). As a legal matter, during a registration year, none of the funds collected can be used for current operations of the UCR Plan in administering the UCR Agreement until all the distributions from current revenues from fees have been made from the depository to the States that have not received their full revenue entitlements. As a result of complying with this statutory requirement, at the beginning of each year's operations, the Plan is not receiving any funds budgeted for the administration of the UCR Agreement and cannot carry out its statutory obligations unless funds are available and held elsewhere. If there is then a revenue shortfall during the registration year, the reserve fund can be used to continue the administration of the UCR Agreement.

As explained in its comment, the UCR Plan maintains four investment accounts containing reserve funds dedicated for specific operational purposes in order to ensure continuity. These reserve funds are a portion of the unrestricted net assets of the UCR Plan that are available for use in emergencies to sustain financial operations. In the UCR Plan Board's view, ensuring the availability of reserve funds to meet possible contingencies is a prudent and appropriate action to take in implementing the UCR Act and is consistent with the UCR Plan Board's statutory obligation to administer the UCR Plan Agreement. This explanation conforms with FMCSA's reading of the statutory provisions discussed above and the important necessity of having reserve funds available in order to ensure payment of statutory entitlements to the participating States and carry out the administrative obligations of the UCR Plan.

For these reasons, and the additional reasons set out in the final rule establishing the 2023 fees (see 87 FR at 53685-86), the UCR Plan has authority under the statute to establish and maintain the reserve funds at issue.

2. The Use of Interest Earnings

Comments: SBTC made and repeated several different comments regarding the UCR Plan's use of interest earnings from the reserve funds and other accounts the Plan has established. SBTC contended that the UCR Plan has benefitted from financial gain from the “questionable practice of investing and possibly risking motor carriers' fees due to the States.” It also contended that the investment proceeds should be passed on to the States and FMCSA should credit the industry by offsetting the 25 percent fee increase. SBTC added that revenues should not be “permanently and indefinitely retained” beyond recovering administrative expenses “through bona fide lawful rulemaking.”

In response to SBTC's comments, the UCR Plan stated that it intentionally maintains “physically separate accounts” for State-owed funds (used to provide revenue for distribution to the 41 participating States), administrative funds, and reserve funds. Funds in these accounts are invested in separate investment vehicles in accordance with the Plan's adopted Investment Policy.

The UCR Plan stated that all interest earnings on State-owed funds are distributed to the 41 participating States, and interest earnings from State-owed funds have not been used as administrative funds, nor added to the reserve funds. Both administrative and reserve funds remain in their respective accounts and are not distributed to the 41 States. Interest earnings from these two accounts are not included in the UCR fee calculation at this time. But the UCR Plan explained that once the reserve funds are fully funded, which they anticipate will occur by the end of calendar year 2024, any excess administrative funds and interest from that fund will be used to reduce the Board's request to FMCSA for administrative funds in the next operating year.

FMCSA Response: In summary, interest earned on the accounts holding State-owed funds are already added to the fee revenues in that account and then distributed to the States. Those interest earnings are not retained by the UCR Plan but are used to reduce the amount of fee revenues needed to make the required distributions to the participating States. SBTC's characterization of these interest earnings as a “slush fund” for the benefit of the UCR Plan and not the participating States is inaccurate.

Interest earned in the administrative fund is used for administrative costs and is not retained by the UCR Plan. The interest earnings also reduce the amount of fee revenue required to pay the administrative costs of operating the UCR Agreement and the Plan. The statute expressly authorizes the use of fee revenues for such purpose, once all the required distributions have been made to the participating States (49 U.S.C. 14504a(h)(3)(B)). The amount for administrative costs for registration year 2025 included in the total revenue required from fees is $4.25 million out of the total of $112.0 million, or 3.79 percent.

3. Using Interest Earnings To Level Off 2025 Registration Fees

Comments: SBTC commented that FMCSA should consider the UCR Plan revenue generated from investments and review whether the revenue generated in previous years and from investments is sufficient to relieve the increase in the 2025 registration year. The UCR Plan responded that the excess State-owed funds from the 2023 year were included in the calculation of the recommended fee for the 2025 registration year. The UCR Plan also clarified that the interest generated by the investments amounted to $311,000, representing only a small fraction of the $112 million fee revenue target for 2025. Since the inclusion of the $311,000 in the 2025 fee calculations would not have changed the fee assessment for carriers in the smallest fee bracket and would have reduced the fee assessed for the largest carriers by only $130, the UCR Plan stated it made the decision to include the $311,000 generated during 2023 in the 2026 registration year fee calculation.

FMCSA Response: FMCSA finds reasonable the UCR Plan's explanation that interest earnings on the reserve funds are already taken into account in determining the proposed fees for 2025 and subsequent years. This is currently the case for interest earned on the funds held for distribution to the States, which will be applied to the 2026 registration year to adjust the fee revenues needed to ensure that the participating States receive their statutory revenue entitlements. When the remaining reserve funds are fully funded, interest earned on those accounts will also be accounted for in the fee recommendations. FMCSA finds it reasonable for the UCR Plan to fully fund its reserves prior to distributing the interest earned on those accounts, thereby not using the interest earnings to provide an additional offset to the revenues to be provided by the fees for registration year 2025. FMCSA further finds it reasonable for the UCR Plan to account for interest earned on the administrative funds account by reducing its request for administrative funds in future years, once the reserve accounts are fully funded.

4. Convenience Fees for Credit Card and ACH Payments

Comments: SBTC raised a separate issue regarding the UCR Plan's practice of passing on to registrants the convenience fees charged by banks when a registrant uses a credit card or ACH transaction to pay the annual registration fees. SBTC characterizes such transaction fees as “surcharges.” SBTC claims that this practice is not authorized by FMCSA. It also claims that the UCR Plan retains this revenue, invests it, and retains the investment income, and states that those convenience fees should be paid out of the UCR Plan's administrative allowance authorized by FMCSA.

In response to SBTC's claims, the UCR Plan explained that when a registrant chooses to use a credit card or ACH transaction to pay the annual registration fee, this is accompanied by a convenience fee, not a surcharge, “to defray a portion of the costs to the UCR that accompany the use of an electronic payment method by the motor carrier.” Furthermore, the UCR Plan noted that paying UCR registration fees using a credit card or an ACH transaction is a voluntary decision the motor carrier or registrant makes, which could be avoided by using a check or money order.

The UCR Plan explained that the convenience fee generated from a credit card payment is calculated differently than the fee for an ACH payment, as the former is a percentage of the annual registration fee and the latter is a fixed amount. Since the UCR plan cannot accurately project how many motor carriers or other registrants will choose to pay the annual registration fee using a credit card versus ACH transaction, including the convenience fees as part of the UCR Plan's annual operating budget risks overcharges to the motor carrier or registrant if the UCR Plan overestimates the costs, and financial shortfalls for the UCR Plan if the UCR Plan underestimates the costs.

Second, the UCR Plan explained that including an estimate of the cost of providing for electronic payments by motor carriers and other registrants in the administrative fund request would force one group of registrants to subsidize another group of registrants. The UCR Plan noted this would be unfair to registrants that complete payment using money orders or checks—methods which do not include a convenience fee, unlike credit card and ACH payment methods. The UCR Plan concluded that, due to the factors explained in its response, the fairest and most accurate way to cover the cost of using an electronic payment method is charging the convenience fee separately to those who chose to utilize that option.

FMCSA Response: FMCSA accepts the UCR Plan's handling of convenience fees for credit card and ACH transactions to pay fees. The UCR Plan has shown that it would be difficult to accurately estimate the amount of such convenience fees and, moreover, that it would be an unfair burden on registrants that chose not to use credit cards or ACH transactions.

5. Request for Issuance of Guidance on the UCR Plan's Investment of Funds

Comments: SBTC also requested in its comment that FMCSA issue guidance on whether the UCR Plan is authorized under law or regulation to invest motor carrier fees and under what risk-level circumstances they may do so.

The UCR Plan clarified in response that all reserve funds are invested according to the Board-approved UCR investment policy, available by link on the UCR Plan website Policies and Procedures page. The UCR Plan further noted that the Board has set “prudent guidelines designed to provide an appropriate risk-adjusted rate of return on all UCR assets.” It also referred to the response to SBTC's comment for detailed discussion of the UCR Plan's authority to establish reserve funds, the importance of maintaining them, to what end interest earnings are used, and how the interest earnings are recognized in the recommended registration fees (discussed above in the section entitled “The Use of Interest Earnings”).

FMCSA response: FMCSA has reviewed and considered both SBTC's and the UCR Plan's comments in this rulemaking, including the UCR Plan's investment policy, in determining the appropriateness of the proposed fee increase. Issues raised include the UCR Plan's use of investment funds and alternatives to the upward adjustment suggested by SBTC and others. Based on the comments other and information submitted to the docket, FMCSA finds the actions of the UCR Plan reasonable and adequately supportive of the proposed rule. Requests for additional Agency action, including issuance of guidance on appropriate UCR fee investments, are outside the scope of this rulemaking.

Out of Scope Comments

Comments: FMCSA received a few additional comments concerning issues beyond the scope of the proposed rule. Some comments related to the need for regulations on broker transparency, safe parking, speed limits on interstate highways, among other topics which the commenters identified as more beneficial to the industry.

FMCSA response: FMCSA appreciates the commenters for raising these issues, and for stressing their importance. However, as they do not pertain to this rulemaking, FMCSA has not taken these comments into consideration or modified the final rule based upon these comments.

C. Final Rule

FMCSA appreciates the commenters' feedback regarding this rulemaking and has taken all within-scope comments into consideration. For the UCR Plan to secure both the funds for required distribution of statutory entitlements to all participating States and the funds for administration of the UCR Agreement, the UCR Plan must generate sufficient revenue, which can only be accomplished by a fee increase, as permitted, and required, by the UCR statute. The upward adjustment in fees for the 2025 registration year will provide an additional $13 million to meet the overall statutory revenue requirement of $112 million. The UCR statute provides for the UCR Plan to request an adjustment in the fees, within a reasonable range, by the Secretary when the fees will be insufficient to provide the annual revenue entitlements to which the participating States are entitled (49 U.S.C. 14504a(f)(1)(E)(i)).

FMCSA also notes that in a final rule published in 2023, the Agency had anticipated adjusting the fees for the 2025 registration year, after receiving the necessary recommendation from the UCR Plan, as the previous excess collections would be largely utilized. In addition, this is the first upward adjustment since 2010, following two years of fee decreases, which, combined, resulted in an average 37.3 percent fee reduction, and no adjustments from 2010 to 2017. The fee levels for the 2025 registration year are still less than the fees that were in effect from 2019 to 2022. For those reasons, FMCSA finalizes the proposed increase without modification.

VI. Section-by-Section Analysis

FMCSA revises 49 CFR 367.40 (which was adopted in the 2023 final rule) so that the fees apply to registration year 2024 only. A new § 367.50 establishes new increased fees applicable beginning in registration year 2025, based on the recommendation submitted by the UCR Plan in its September 2023 Fee Recommendation. The fees in new § 367.50 will remain in effect for subsequent registration years after 2025 unless revised by a future rulemaking.

FMCSA also removes 49 CFR 367.20, which set the fees for 2020, 2021, and 2022, as those fee amounts will not be necessary.

VII. Regulatory Analyses

A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 13563 (Improving Regulation and Regulatory Review), E.O. 14094 (Modernizing Regulatory Review), and DOT Regulatory Policies and Procedures

FMCSA has considered the impact of this final rule under E.O. 12866 (58 FR 51735, Oct. 4, 1993), Regulatory Planning and Review, E.O. 13563 (76 FR 3821, Jan. 21, 2011), Improving Regulation and Regulatory Review, E.O. 14094 (88 FR 29179, Apr. 11, 2023) Modernizing Regulatory Review, and DOT's regulatory policies and procedures. The Office of Information and Regulatory Affairs, as stated in section 3(f) of E.O. 12866, as supplemented by E.O. 13563 and amended by E.O. 14094, does not require an assessment of potential costs and benefits under section 6(a)(3) of that order. Accordingly, OMB has not reviewed it under that E.O.

The final rule increases the registration fees paid by motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies, which fund both the administration of the UCR Plan and Agreement and the statutory entitlements to the participating States. Therefore, under this rule, these entities face increased costs in the form of increased fees. However, while each motor carrier or other entity will incur an increased burden, fees are considered by OMB Circular A-4, Regulatory Analysis, as transfer payments, not costs. Transfer payments are payments from one group to another that do not affect total resources available to society. By definition, transfers are not considered in the monetization of societal costs and benefits of rulemakings. In this case, increased fees to motor carriers are equivalent to revenue to participating States. Nevertheless, the Agency acknowledges that motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies will incur greater costs. The details of the amount of increase to the annual UCR fee for each fee bracket, are included in the discussion above in Section VI.

This rulemaking will establish increases in the annual registration fees for the UCR Plan and Agreement. The entities affected by this rule are the participating States, motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies. Because the State UCR revenue entitlements will remain unchanged, the participating States will not be impacted by this rule. The primary impact of this rule will be an increase in fees paid by individual motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies. The increase in fees for the 2025 registration year from the 2024 registration year fees (approved on June 22, 2023 (88 FR 40179)) will be an average of 25 percent, ranging from $9 to $9,000 per entity, depending on the number of vehicles owned or operated by the affected entities.

B. Congressional Review Act

This rule is not a major rule as defined under the Congressional Review Act (5 U.S.C. 801-808).

C. Regulatory Flexibility Act (Small Entities)

The Regulatory Flexibility Act (5 U.S.C. 601 et seq., RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), requires Federal agencies to consider the effects of the regulatory action on small business and other small entities and to minimize any significant economic impact. The term small entities includes small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000 (5 U.S.C. 601(6)). Accordingly, DOT policy requires an analysis of the impact of all regulations on small entities, and mandates that agencies strive to lessen any adverse effects on these businesses.

This rulemaking will directly affect the participating States, motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies. Under the standards of the RFA, as amended by SBREFA, the participating States are not small entities. States are not considered small entities because they do not meet the definition of a small entity in section 601 of the RFA. Specifically, States are not considered small governmental jurisdictions under section 601(5) of the RFA, both because State government is not included among the various levels of government listed in section 601(5), and because, even if this were the case, no State or the District of Columbia has a population of less than 50,000, which is the criterion by which a governmental jurisdiction is considered small under section 601(5) of the RFA.

The Small Business Administration's (SBA's) size standard for a small entity (13 CFR 121.201) differs by industry code. The entities affected by this rule fall into many different industry codes. In order to determine if this rule will have an impact on a significant number of small entities, FMCSA examined the 2012 and 2017 Economic Census data for two different North American Industry Classification System (NAICS) industries: Truck Transportation (subsector 484) and Transit and Ground Transportation (subsector 485).

As shown in the table below, the SBA size standards for the national industries under the Truck Transportation and Transit and Ground Transportation subsectors range from $19.0 million to $43.0 million in revenue per year. To determine the percentage of firms that have revenue at or below SBA's thresholds within each of the NAICS national industries, FMCSA examined data from the 2017 Economic Census. In instances where 2017 data were suppressed, the Agency imputed 2017 levels using data from the 2012 Economic Census. Boundaries for the revenue categories used in the Economic Census do not exactly coincide with the SBA thresholds. Instead, the SBA threshold generally falls between two different revenue categories. However, FMCSA was able to make reasonable estimates as to the percentage of small entities within each NAICS code.

The percentages of small entities with annual revenue less than the SBA's threshold ranged from 96.3 percent to 100 percent. Specifically, approximately 96.3 percent of Specialized Freight (except Used Goods) Trucking, Long Distance (484230) firms had annual revenue less than the SBA's revenue threshold of $34.0 million and will be considered small entities. FMCSA estimates 100 percent of firms in the Mixed Mode Transit Systems (485111) national industry had annual revenue less than $29.0 million and will be considered small entities. The table below shows the complete estimates of the number of small entities within the national industries that may be affected by this rule.

Therefore, while FMCSA has determined that this rulemaking will impact a substantial number of small entities, it has also determined that the rulemaking will not have a significant impact on them. The effect of this rulemaking will be to increase the annual registration fee that motor carriers, motor private carriers of property, brokers, freight forwarders, and leasing companies are currently required to pay. The increase will be 25 percent on average, $9 to $9,000 per entity, depending on the number of vehicles owned and/or operated by the affected entities.

While the RFA does not define a threshold for determining whether a specific regulation results in a significant impact, the SBA, in guidance to government agencies, provides some objective measures of significance that the agencies can consider using. One measure that could be used to illustrate a significant impact is labor costs; specifically, whether the cost of the regulation exceeds 1 percent of the average annual revenues of small entities in the sector. Given that entities owning between 0 and 2 commercial motor vehicles would experience an increase of $9, a small entity would need to have average annual revenue of less than $900 to experience an impact greater than 1 percent of average annual revenue. This is an average annual revenue that is smaller than will be required for a firm to support one employee. The increased fee amount and impact on revenue increase linearly depending on the applicable fee bracket.

Consequently, I certify that the proposed action will not have a significant economic impact on a substantial number of small entities.

D. Assistance for Small Entities

In accordance with section 213(a) of SBREFA, FMCSA wants to assist small entities in understanding this final rule so they can better evaluate its effects on themselves and participate in the rulemaking initiative. If the final rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult the person listed under FOR FURTHER INFORMATION CONTACT . Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with Federal regulations to SBA's Small Business and Agriculture Regulatory Enforcement Ombudsman (Office of the National Ombudsman, see https://www.sba.gov/about-sba/oversight-advocacy/office-national-ombudsman ) and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights of small entities to regulatory enforcement fairness and an explicit policy against retaliation for exercising these rights.

E. Unfunded Mandates Reform Act of 1995

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538, UMRA) requires Federal agencies to assess the effects of their discretionary regulatory actions. The Act addresses actions that may result in the expenditure by a State, local, or Tribal government, in the aggregate, or by the private sector of $192 million (which is the value equivalent of $100 million in 1995, adjusted for inflation to 2022 levels) or more in any 1 year. Though this final rule will not result in such an expenditure, and the analytical requirements of UMRA do not apply as a result, the Agency discusses the effects of this rule elsewhere in this preamble.

F. Paperwork Reduction Act

This final rule contains no new information collection requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

G. E.O. 13132 (Federalism)

A rule has implications for federalism under section 1(a) of E.O. 13132 if it has “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

FMCSA has determined that this rule will not have substantial direct costs on or for States, nor will it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation. Therefore, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Impact Statement.

H. Privacy

The Consolidated Appropriations Act, 2005, requires the Agency to assess the privacy impact of a regulation that will affect the privacy of individuals. This rule will not require the collection of personally identifiable information.

The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies and any non-Federal agency that receives records contained in a system of records from a Federal agency for use in a matching program.

The E-Government Act of 2002, requires Federal agencies to conduct a Privacy Impact Assessment (PIA) for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form. No new or substantially changed technology will collect, maintain, or disseminate information as a result of this rule. Accordingly, FMCSA has not conducted a PIA.

In addition, the Agency submitted a Privacy Threshold Assessment (PTA) to evaluate the risks and effects the proposed rulemaking might have on collecting, storing, and sharing personally identifiable information. The PTA was adjudicated by DOT's Chief Privacy Officer on April 17, 2024.

I. E.O. 13175 (Indian Tribal Governments)

This rule does not have Tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

J. National Environmental Policy Act of 1969

FMCSA analyzed this rule pursuant to the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and determined this action is categorically excluded from further analysis and documentation in an environmental assessment or environmental impact statement under FMCSA Order 5610.1 (69 FR 9680), Appendix 2, paragraph 6.h. The categorical exclusion (CE) in paragraph 6.h. covers regulations and actions taken pursuant to regulation implementing procedures to collect fees that will be charged for motor carrier registrations. The proposed requirements in this rule are covered by this CE.

List of Subjects in 49 CFR Part 367

• Intergovernmental relations
• Motor carriers
• Brokers
• Freight Forwarders

Accordingly, FMCSA proposes to amend Title 49 CFR, subtitle B, chapter III, part 367 as follows:

PART 367—STANDARDS FOR REGISTRATION WITH STATES

1. The authority citation for part 367 continues to read as follows:

Authority: 49 U.S.C. 13301, 14504a; and 49 CFR 1.87.

2. Remove and reserve § 367.20.

3. Revise § 367.40 to read as follows:

4. Add § 367.50 to read as follows: