government affairs | DOT update
Fuel Surcharge Legislation In Congress
Legislation in the House and Senate to require a carrier or intermediary that recovers a fuel surcharge to pass that revenue on to the party that actually paid for the fuel is receiving consideration a Congress that wants to be viewed as taking some action to assist with skyrocketing diesel prices. H.R. 5977 was introduced on May 6, 2008 by Reps. Peter DeFazio (D-OR), Thomas Petri (R-WI), and Brad Ellsworth (D-IN). Senators Olympia Snowe (R-ME) and Sherrod Brown (D-OH) have already introduced a similar bill in the Senate. The bills are supported by the Owner-Operators Independent Drivers Association.

OOIDA claims that the legislation "seeks to ensure that brokers and middlemen negotiating a contract to haul freight for a shipper are not using the high price of fuel to exploit that shipper or the small-business trucker who actually hauls the shipper's freight." But the legislation could be interpreted to prevent a carrier from using the fuel surcharge payment as an offset for other charges that the owner-operator legally owes the carrier under the lease agreement.

Motor carrier/owner-operator leases have a variety of charges that the owner-operator must pay to the carrier, such as vehicle lease payments, insurance charges, loss and damage claims, etc., and this legislation, which requires a "payment" in the exact amount of the fuel surcharge, would likely prevent the carrier from being able to offset those other charges with the revenue from the fuel surcharge. This has been an issue in OOIDA litigation with a number of motor carriers, where the owner-operators wanted reimbursement for fuel tax credits or refunds regardless of how much the owner-operator might owe the carrier under other terms of the lease.

Pennsylvania Finds Investor For Turnpike
Governor Ed Rendell (D) of Pennsylvania announced that a Spanish company and Citigroup teamed up to submit the highest bid of $12.8 billion for the right to lease the Pennsylvania Turnpike for the next 75 years.

Although the Governor is strongly in favor of approving the bid, the State Legislature must approve any deal, and some in the leadership are promising political opposition because the offer was significantly less than the $18 billion that some had predicted. House Majority Whip Keith McCall reportedly said that the proposal is "not dead on arrival," but the deal must be discussed with the entire Democratic caucus.

The lease deal would let the consortium operate the main line and the northern extension of the Turnpike and increase tolls 25 percent in January, and then by 2.5 percent or an amount equal to consumer price inflation after that. The turnpike's operating revenue was $608 million in the fiscal year that ended last May. The Governor has predicted the deal would generate an average of $1.1 billion a year in the first 10 years (income from the investment of the lump-sum lease payment) for roads, bridges and mass transit.

If the deal goes through, the state would almost certainly abandon a plan to introduce tolls to Interstate 80 that are expected to generate about $500 million a year. The tolls were the primary component of a law passed last summer that is expected to produce about $940 million annually for transportation needs.

Maine Senators Introduce Bill To Increase Vehicle Weight On Interstates
Senators Olympia Snow and Susan Collins, both Republicans from Maine, have introduced S. 3059, a bill to allow motor carriers to operate tractor-semitrailer or tractor-trailer units heavier than 80,000 pounds on the Interstate highways as long as the vehicles comply with state weight limits. The provision would apply only when the average price of diesel fuel exceeds $3.50 per gallon.

As justification for the change, the legislation notes:

1. Diesel fuel prices have increased more than 50 percent during the 1-year period between May 2007 and May 2008;

2. Laws governing Federal highway funding effectively impose a limit of 80,000 pounds on the weight of vehicles permitted to use highways on the Interstate System;

3. The administration of that provision in many States has forced heavy tractor-trailer and tractor-semitrailer combination vehicles traveling in those States to divert onto small State and local roads on which higher vehicle weight limits apply under State law;

4. The diversion of those vehicles onto those roads increases fuel costs because of increased idling time and total travel time along those roads; and

5. Permitting heavy commercial vehicles, including tanker trucks carrying hazardous material and fuel oil, to travel on Interstate System highways when fuel prices are high would provide significant savings in the transportation of goods throughout the United States.

If enacted, the provision would be in effect for two years or less time if the Secretary of Transportation determines that allowing heavier vehicles on the Interstates has a detrimental effect on safety. The bill would also require the Government Accountability Office to conduct a study on the effect of the program on the safety of the overall highway network in the country.

House Passes Fuel Surcharge Amendment
On May 22 the U.S. House of Representatives adopted an amendment offered by Rep. Peter DeFazio (D-OR) to the 2009 Department of Defense Authorization bill to mandate that all fuel surcharges paid by the government will be passed through to the party actually buying the fuel.

The amendment was added to the bill on a voice vote and the House approved the bill by a vote of 383 to 26. A companion bill is under consideration in the Senate.

DeFazio offered the amendment to ensure that fuel surcharges imposed by brokers or other third parties are passed onto owner-operators. Because of the sharp rise in fuel costs, brokers are assessing fuel charges on shippers in order to cover the increased cost of hauling their goods, and this provision would require that all surcharges be passed on to the party actually paying for the fuel. Other bills in the House and Senate would require remittance of fuel surcharges to the party paying the fuel for general freight shipments as well.

House Passes Fuel Surcharge Amendment
ASET Visits Capitol Hill; Democratic Senators Respond With Size And Weight Freeze Bill
The shipper and motor carrier coalition Americans for Safe and Efficient Trucking (ASET) held a fly-in to Washington, D.C. on May 14 and met with a number of Members of Congress and their staff members. ASET is working to establish support for a legislative pilot program to allow commercial motor vehicles up to 97,000 pounds on the Interstates and National Highway System routes in five states - Maine, Minnesota, Wisconsin, South Carolina and Georgia. The group targeted the congressional delegations form those states in the Washington visits.

Opponents of heavier CMVs were aware of the ASET visits and prepared a response, however. On May 15, Sen. Frank Lautenberg (D-NJ) and Sen. Claire McCaskill (D-MO) introduced S. 3021, a bill to freeze the allowable weights at 80,000 pounds and freeze the allowable lengths at 53 feet for semitrailers on the National Highway System.

A press release for Sen. Lautenberg's office referred to the 2007 bridge collapse on I-35 in Minnesota and argued that Congress should not be considering placing even heavier trucks on the nation's highways and bridges. The statement ignored the fact that the additional weight would be supported by an additional axle on a 97,000 pound combination unit.

Are You DOT Compliant?

Are your log books complete?

Do you have random Drug Testing?

Do you know the hours of service regulations?

Do you keep your driver files up-to-date?

Do your Gas slips/Toll receipts match your logbook?

Are your Maintenance repair logs up-to-date?

Do you know what MRO is if you fail the drug test?

Have you filled out your MCS-150? This tells the government if you are still in business, if you still own the truck, etc. (Federal Motor Carrier Safety Administration heads DOT and sends this out).

If you answered No to any of these questions, contact Eric Arnold with Arnold Safety Consulting. He may be reached at 610.582.4356 or eric@arnoldsafety.com. Eric will be glad to provide training so that you may become and stay compliant. Mr. Arnold has worked with the OABA as our DOT expert for the past five years.