High Court Focus On Trucking Fees

February 4, 2005
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WASHINGTON, D.C. — This April, the U.S. Supreme Court will decide how regulated Michigan's truckers actually are — or, at least, how much regulation of them should cost.

In question are Michigan's $100-per-truck annual intrastate and interstate decal fees that, according to the state, are used to fund the regulation of the trucking industry. Representatives of the industry are pointing out that trucking was deregulated years ago, and by definition, isn't regulated.

"You're not paying for the privilege of being regulated," said Walt Heinritzi, executive director of the Michigan Trucking Association.

Heinritzi said that when Congress enacted the Single State Registration System (SSRS) in 1995 — eliminating Michigan's economic regulatory scheme — the $100 fee required of trucks registered in Michigan and those registered elsewhere but transporting loads in Michigan should have disappeared.

Since then, the MTA estimates that the state has illegally collected $70 million in fees.

Believing this to be a violation of the U.S. Constitution's Commerce Clause by creating a barrier for out-of-state motor carriers to enter into the market, the trucking industry brought three separate cases against the state.

In 2003, an appeals court ruled in favor of the state in all three cases, citing the state's interest in regulating highway safety.

In December, the U.S. Supreme Court agreed to hear the appeal of two of those cases: American Trucking Associations Inc. and USF Holland Inc. vs. Michigan Public Service Commission and Mid-Con Freight Systems vs. Michigan Public Service Commission.

These cases concern, respectively, interstate businesses based in Michigan and out-of-state carriers involved in Michigan intrastate hauling.

The third case, Michigan Public Service Commission vs. Troy Cab Inc., involved Michigan-based carriers and intrastate shipping. It was not granted a high court appeal.

Mike Fielek, director of the MPS Motor Carrier Division, argues that to some degree, the industry is still regulated.

"The substantial amount of this revenue goes to the Michigan State Police for enforcement which, I think we all agree, is an important aspect of what we do, as well as the administrative and safety programs we have here."

"The trucking industry benefits from this," added MPS Commissioner Bob Nelson. "There are some players out there not operating under our requirements, and these programs make a safer environment for the trucking industry."

ATA President and CEO Bill Graves said in a statement that the state can't impose a discriminatory charge by calling it a fee instead of a tax.

"Congress enacted the SSRS to establish a uniform procedure for state registration of interstate carriers," added Jim Hanson, of the Indianapolis law firm Scopelitis, Garvin, Light & Hanson, who is representing the ATA.

"The Michigan fee and the decision upholding it violate the very notion of uniformity and create a loophole allowing other states to charge excessive fees as well."

Fielek said that the MPS collects revenues of around $7.5 million through these fees. But over half of that is through the intrastate and single-state programs, neither of which is threatened by the litigation.

"I think that $70 million is probably not an accurate figure," Nelson said.

The lone West Michigan-based carrier involved in litigation, USF Holland, declined to comment.    

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