TRANSTRENDS MONTHLY NEWSLETTER- October 2005
10/04/2005

A PUBLICATION OF THE TRANSLAW GROUP, INC.
EDITOR: JAMES M. BURNS
48 ROBBINS ROAD, SPRINGFIELD, MA 01104
TOLL FREE 800 637 0754
TEL 413 732 8588
FAX 413 732 8553
EMAIL: informatioverett-associates.com

TRANSTRENDS is published monthly for friends and clients of the Translaw Group, Inc. The information provided in this newsletter is not intended as specific advice on a particular subject. Rather, the information is for general edification. Further, this information is time sensitive and may need to be revised and updated from time to time. Please feel free to call this office with your specific questions at 413 781 8205, or you may e-mail the office at
jburnransregs.com

IF YOU WISH TO END YOUR SUBSCRIPTION TO TRANSTRENDS, SIMPLY SEND AN EMAIL REQUESTING A CANCELLATION TO jburnransregs.com

IN THIS ISSUE
1 FUEL LINE
2 NO SKID ZONE
2 HOS CLARIFICATION
3 MORE HOS NEWS
4 BIG OIL, BIGGER PROFITS
5 SWEET NEWS FOR DIABETICS
6 NJ $2,500.00 FINES
7 IMPORTANT DUE DATES

FUEL LINE
Each issue we will feature as the first item the FUEL LINE which will alert you to those states that are planning tax increases, toll hikes and other fees.

WI: MANDATORY FUEL MARKUP TAKES HIT
Wisconsin’s minimum markup requirement for motor vehicle fuel is likely to stay in place after a state legislative panel refused last week to repeal it. Adopted during the Depression era, the rule requires wholesalers to charge fuel stations at least 3 percent more than they paid. Stations in turn must add on at least 6 percent more at the pump. The Wisconsin law was designed to prevent businesses from selling at a loss in order to drive out competitors. Wal-Mart and a few other big box type retailers are pushing for the change which would then put them in a position to drive out the competition. History does repeat itself, and often!

IRELAND: TRUCKERS PROTEST HIGH FUEL PRICES
Dozens of truck drivers staged a slowdown in Dublin, Ireland, on Monday, Sept. 19, to protest the rising cost of fuel in that country. Safety in numbers doesn’t really mean much, but, fuel costs are a problem globally.

OK: OKLAHOMA VOTERS SQUASH HIGHER FUEL TAXES
Oklahomans headed to the ballot box for a special election Tuesday, Sept. 13, and crushed an effort to boost the state’s fuel taxes to help fix roads and bridges. Nobody wants to pay more tax for gas particularly when the cost is going up daily.

MI: MICHIGAN DEMOCRATS PUSH LOWER PRICE AT PUMP
With prices at the pump shooting toward $3 per gallon and no signs of stopping there, Democrats in the Michigan House are pushing a package of bills intended to drive down the cost of diesel and gasoline by decreasing the state’s reliance on foreign fuel.

House Democrats are expected to draft and introduce the six-bill package within weeks.

Their bills would: give tax incentives to fuel stations in the state who buy equipment that enables them to sell biodiesel or fuel ethanol; require that all fuel stations to offer fuel with at least 10 percent ethanol content; require biodiesel to comprise 5 percent of diesel fuel; and encourage the state fleet of vehicles to use biodiesel vehicles.

NO SKID ZONE
Bill O’Reilly may have the “No Spin Zone” but the Translaw Group has the “No skid Zone”. Each issue will highlight the absurdity of a particular rule, regulation, law or government action that just doesn’t make common sense.

YOU JUST CAN’T SAVE ENOUGH
For 25 years, Multnomah County, Ore., has set aside 1 percent of public building construction money for art, meaning almost $600,000 worth for its new $58 million jailhouse. Critics of the program say that art won't do much to battle crime in Multnomah, but on the other hand, so far, neither has the $58 million. The jail has been finished for a year, but as of September, it's still empty because county officials have not found a way to pay the operating expenses. If they ever do, inmates and visitors will be treated to such works as Thomas Sayre's concrete shipwreck sculpture.

ARE WE SAFE?
In July, the Transportation Security Agency fired Houston airport baggage handler Bassam Khalaf when it discovered that he is, off-duty, the "Arabic Assassin," a rap singer whose lyrics, according to TSA, glorify the 9-11 hijackers and threaten similar mayhem on the United States in the future. Khalaf said his lyrics were an innocent effort to gain notoriety as a performer. But, we don’t think that gives much comfort to the traveling public.

HOURS OF SERVICE CLARIFICATION
Originally, we were under the assumption that the 10 hour period required for drivers who use the sleeper berth and who are working the standard 14 hour day could split the 10 hours into two periods, one of which would have to be 8 hours and the other, a two hour period. By splitting, I interpreted the rule to mean that the 8 and 2 hour periods could be separated by driving and work periods. Well, I was wrong!

I do not know why the Federal Motor Carrier Safety Administration did not just come out and state the rule more clearly; however, that is government regulation. The 10 hour period must be kept together but only 8 hours needs to be “in the sleeper berth” and the other two hours can be any combination of “sleeper berth” and/or “off duty not working”. But, please remember that these two periods must be contiguous and un-broken for a total of 10 hours.

Please review the following for a better description of the actual rule.
Sleeper-Berths:
One major change in the rule requires truckers who use sleeper berths to rest for at least 8 consecutive hours in the sleeper berth, and take another 2 consecutive hours off duty or in the sleeper berth (or any combination of the two) before resetting their daily driving schedule. But the total time must equal 10 hours and be un-broken. The 2 hour period could come before the 8 hour period in the bunk; however, the 8 and 2 must be together.

The ten hour period must be in one un-broken period in order to count as the 10 hours required rest period in order to reset the clock.

OOIDA PETITIONS FMCSA FOR REST-PERIOD HOS CHANGES
The Owner-Operator Independent Drivers Association filed a petition Monday asking the government to reconsider its recently revised hours-of-service rules for truckers over two of the rule’s provisions for driver rest periods. OOIDA said in a statement that despite the Federal Motor Carrier Safety Administration’s statements that the rule had not been significantly changed, OOIDA “identified specific changes that will have a significant impact on truckers and their operations.”

The group wants truckers to be able to take a two-hour break that would effectively “stop the clock” on their work hours, to attend to things like eating and showering that should not, the group says, count against drivers’ work hours. The other change, for split-sleeper berths for team drivers, would allow each to take a minimum of eight hours off in a sleeper berth. OOIDA said that change is “impractical” and that it is asking that FMCSA retain the current sleeper-berth provision, for team drivers, that is based on a five-hours on and five-hours off schedule. Good luck to OOIDA!

OFFICIALS SEE DIFFICULTY ENFORCING HOURS RULE
The Federal Motor Carrier Safety Administration’s new hours-of-service regulations are now in effect and trucking industry and enforcement officials say they are concerned about not having enough time to adapt to the changes, even with an announced three-month transitional period of soft enforcement.

The new rules, which were announced Aug. 19, made no changes to the main limits on work and driving time for truckers, nor did they change the rest period mandated by the existing rule. However, FMCSA did alter the provisions governing sleeper-berth use and how it would apply the rule to short-haul drivers.

GOVERNOR SEEKS INPUT ON DEALING WITH MAINE’S WORST DRIVERS

A working group recently formed by Gov. John Baldacci to reduce the number of dangerous drivers on Maine’s roads is asking for input from the public.

This move is a result of a recent fatal accident on Interstate 95 in Hallowell, ME, involving a tractor-trailer and a car. Trucker Scott Hewitt is blamed for the crash that killed 40-year-old Tina Turcotte of Scarborough, ME, on July 29. After the wreck, the Portland Press Herald reported Hewitt has 63 driving convictions and 23 suspensions in Maine and other states.

Hewitt’s Maine license and registration were both under suspension at the time of the accident, and there were outstanding warrants for his arrest, the newspaper reported. Perhaps Maine officials should consider enforcing the serving of warrants on their offenders.

BIG OIL, BIGGER PROFITS
Not everybody is feeling the pinch at the pump these days.

Exxon Mobil Corp. released a report in early September stating that its profits are up 69 percent from this time last year to a staggering $110 million a day. The company stands to make $10 billion by the end of the current fiscal quarter. That’s up 34 percent from the same quarter last year.

In addition, The Philadelphia Inquirer reported that the Prudential Equity Group said refining margins – the money that refineries make on each barrel of fuel they produce – doubled in the wake of Katrina, to $28.04 per barrel. By contrast, the margin in 1997 was only $4.40 per barrel.

Jacques Rousseau, an energy analyst at investment bank FBR, told The Boston Herald that there is a simple explanation behind these record profits: the extra money consumers are paying at the pump is going straight into the bottom line of the oil companies. In other words, he said, consumer prices are going through the roof while the cost of producing fuel hasn’t really changed.

The oil companies maintain that it’s simply a case of supply and demand, and that the extra money is needed to further exploration for new oil and to build up refineries. Some critics, such as consumer watchdog group The Foundation for Taxpayer and Consumer Rights, aren’t buying it.

Jamie Court, president of the group, said in a news release that the oil companies are intentionally driving up prices. “Large oil companies have for a decade artificially shortened the gasoline market to drive up prices,” he said. “Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty.”

DIESEL PRICES DRIBBLING DOWN AFTER GUSHING TO RECORD HIGHS
Prices for diesel fuel continued to drop slightly across the country in mid September though not nearly as fast as they went up after Hurricane Katrina. It was reported that the national average of $2.89 per gallon on Friday September 9th, down about a penny from the day before.

Several areas, including Arizona, California, Nevada, New York and Vermont, remained above the $3 per gallon mark. Some truck stop companies were still reporting low supplies in some areas, mostly in the Southeast. Flying J on its Web site reported low supplies at some stations in Georgia, Florida, Kentucky, Mississippi and Tennessee.

Travel Centers of America, meanwhile, was still rationing fuel, but only at two stations – one in Meridian, MS, and another in Matthews, MO. Both stations were limiting diesel purchases to 50 gallons per truck. Elsewhere, refineries and oil rigs shut down by Katrina were gradually beginning to come back online, though in some cases it could still be awhile before full production resumes.

SWEET NEWS FOR INSULIN DEPENDENT DRIVERS
Despite the fact that the regulations had – up until now – made it impossible for individuals to get an exemption to run interstate if they had insulin-treated diabetes, four insulin-treated diabetic truck drivers were recently granted the first-ever such exemptions by the Federal Motor Carrier Safety administration. Receiving exemptions were Gerald Huelle, Lee Kumm, Mitchell Pullen and Steven Zoller.

“The applicants’ intrastate driving experience and history provide an adequate basis for validating their ability to drive safely in interstate commerce,” the notice stated. “Consequently, FMCSA finds that exempting these applicants from the diabetes standard … is likely to achieve a level of safety equal to that existing without the exemption.”

FEDERAL APPEALS COURT HEARS ARGUMENTS IN DRIVER-TRAINING CASE
The level of professionalism in America’s trucking industry is in the hands of three federal judges who listened to arguments for and against the FMCSA’s driver-training rule this week.

Several public interest groups who are challenging the rule faced off Tuesday, Sept. 13, against Department of Justice lawyers representing the Federal Motor Carrier Safety Administration in the U.S. Appeals Court in Washington, DC.

A three-judge panel listened to the arguments against the rule – which took the feds 13 years to write and which does not include any requirements that entry-level drivers receive any actual training in how to drive a commercial motor vehicle. The government’s lawyers argued that the rule meets the 1991 mandate from Congress to develop a driver-training rule or report back to Congress why it would not be in the public interest to have one.

NJ SETS SPEEDING FINES AT $2,500.00 FOR TRUCKERS
Acting Gov. Richard Codey has signed a bill into law increasing fines for oversize trucks caught speeding on steep, local roads in New Jersey. The bill swept through the state’s Legislature by unanimous consent.

“It’s not safe for a truck that weighs four tons to be traveling at speeds in excess of 35 mph down a hill,” Assemblywoman Linda Stender, D-Union, the bill’s sponsor, said in a written statement.

The new law, previously A3096, allows municipalities to set a new range of fines for trucks weighing four tons or more that get pulled over for driving on roads with a grading of more than 5 percent. Offenders would face a $2,500 fine with any subsequent violations resulting in up to a $5,000 fine.

IMPORTANT DUE DATES FOR ALL MOTOR CARRIERS
The following information is provided to you as a service of The Translaw Group, Inc. This guide will provide you with important renewal date information with respect to the many tax reports, permits and registration renewal dates that you fleet must comply.

Your specific fleet may have additional items that must be renewed each year. Therefore, please be advised that this list may not be an all inclusive list covering your fleet. Should you have any questions concerning the list, please feel free to call this office.

ITEM ACTION REQUIRED
IFTA BASE STATE FUEL DECAL RENEW NO LATER THAN NOVEMBER OF EACH YEAR

NEW YORK HIGHWAY USE TAX DECAL (NYHUT) NEXT RENEWAL DATE, 1/1/2006, THE CURRENT 18TH SERIES DECALS REMAIN IN EFFECT UNTIL 1/1/2006. RENEW IN NOVEMBER OF 2005.

SINGLE STATE REGISTRATION SYSTEM (SSRS), THE OLD BINGO STAMP PROGRAM. RENEW NO LATER THAN NOVEMBER OF EACH YEAR. YOU WILL RECEIVE A MASTER REGISTRATION AND YOU SIMPLY COPY THE REGISTRATION FOR EACH VEHICLE IN YOUR FLEET INCLUDING OWNER/OPERATORS, AND LONG AND SHORT TERM LEASED VEHICLES.

ANNUAL VEHICLE INSPECTION THE ANNUAL VEHICLE
INSPECTION CAN BE COMPLETED AT ANY TIME; HOWEVER, THE DECAL THAT IS AFFIXED TO THE VEHICLE MUST BE CURRENT. THERE IS NO “HARD” DATE THAT THE DECAL MUST DISPLAY, RATHER, THE INSPECTION MUST BE DONE EVERY TWELVE MONTHS.

INTERNATIONAL REGISTRATION PLAN (IRP)ANNUAL RENEWAL BASED ON EACH JURISDICTION’S RENEWAL DATE. MA JULY 1ST CT MAY 1ST NY STAGGERED, BE AWARE OF YOUR DUE DATERI APRIL 1ST ME STAGGERED, BE AWARE OF YOUR DUE DATENH STAGGERED, BE AWARE OF YOUR DUE DATEVT STAGGERED, BE AWARE OF YOUR DUE DATE(CALL THIS OFFICE FOR EXPIRATION DATES OF OTHER JURISDICTIONS NOT LISTED)

NEW YORK CORPORATION TAX FILING ANNUAL ESTIMATE PAID IN FULL MUST BE FILED BY MARCH 15TH OF EACH YEAR AND THE FINAL REPORT IS DUE SEPTEMBER 15.

KENTUCKY APPORTIONED VEHICLE TAX REPORT APRIL 15TH OF EACH YEAR

KANSAS PROPERTY TAX RENDITION MARCH 20TH OF EACH YEAR, HOWEVER, AN EXTENSION CAN BE FILED IN WRITING FOR GOOD CAUSE.

RI INTRASTATE OPERATING AUTHORITY REGISTRATION RENEW BY NOVEMBER OF EACH YEAR

NY INTRASTATE OPERATING AUTHORITY REGISTRATION RENEW BY NOVEMBER OF EACH YEAR

IRS HEAVY VEHICLE EXCISE TAX MUST BE FILED AND PAID BY AUGUST 31 OF EACH YEAR. YOU MAY ELECT THE INSTALLMENT PLAN AND BREAK UP THE TOTAL COST IN FOUR INSTALLMENTS WITH DUE DATES OF 8/31, 12/31 3/31 AND 6/31

HAZMAT REGISTRATION JULY OF EACH YEAR IS THE TIME TO RENEW YOUR HAZMAT REGISTRATION. YOU MAY OPT TO REGISTER FOR PERIODS OF MORE THAN ONE YEAR AND YOU CAN SAVE MONEY BY DOING SO.

NEW JERSEY BUSINESS TAX MARCH 15TH OF EACH YEAR

PENNSYLVANIA BUSINESS TAX MARCH 15TH OF EACH YEAR

THEY CAN’T DO THAT, CAN THEY?
You bet they can and they have. It may not seem fair but other states can tax your business even if you only make a delivery or two in that state each year! We are talking about New York, New Jersey and Pennsylvania in particular; however, almost all states have similar tax regulations on the books but may not be as active as the above named states in their enforcement actions. In fact, we just learned that Connecticut is pursuing carriers in a similar nature. So much for neighborliness.

It was in the days of James Madison that he saw the need for relief that allowed the free flow of commerce free from undue taxation, interruption of the flow of commerce and arbitrary regulations. The Commerce Clause was born by the Continental Congress to address these very issues.

The Commerce Clause is more than an affirmative granting of power it additionally has an inverse side know as the Dormant Commerce Clause. The Dormant Commerce Clause prohibits certain state action that interferes with interstate commerce originally the Supreme Court saw the Dormant Commerce Clause as prohibiting any form of state taxation on interstate commerce. This was stated in Leloub v Port of Mobile 127 U. S. 640, 648 (1888) (stating that “No state has the right to lay a tax on interstate commerce in any form). Strong language, but soon to fall.

On might think that standard is still in effect, however, the courts began to change the standard by allowing certain indirect “burdens” on interstate commerce without totally destroying the prohibition. This action began in the late 1890’s and early to mid 1900’s.

What we have today is a scheme that allows for taxation of interstate commerce when there is a showing of a substantial nexus. And, in recent years the standard for “substantial nexus” has eroded to the point that a single shipment is enough to trigger the particular states taxation laws. The only good news is that not every state is as aggressive as other states such as Pennsylvania, New York and New Jersey. Many carriers see the occasional property rendition tax forms that yield little tax such as Arkansas, Kentucky and Kansas. But as states seek new revenues you can expect to see a more aggressive stance towards such taxation.

RANSOM: The three states mentioned above are very aggressive in assessing business tax and, in fact, New Jersey is so aggressive that they will even impound your vehicle until you pay them a “ransom” to release your vehicle and you still have to make the necessary tax filings. You may find that the ransom was much more than the actual tax and you will have a difficult time trying to get the balance back, if ever.

In 2002 more than 6.2 trillion dollars worth of goods moved by truck. Thats a lot of money ripe for opportunistic taxation. Add to that figure the fact that 221 billion dollars was generated in carrier operating revenue and employed some 3.1 million truck drivers. All of which are potentially subject to some type of taxation as the truck rolls.

As previously stated the Dormant Commerce Clause was slowly eroded during the first part of the 1900’s. It was in 1977 in Complete Auto Transit, Inc v Brody 430 U. S. 274 (1977) that the courts brought the Dormant Commerce Clause and due process considerations together. Under the Complete Auto case a tax will be sustained if it is

· Applied to an activity with a substantial nexus with the taxing authority.
· Is fairly apportioned.
· Does not discriminate against interstate commerce
· Is fairly related to the services proved by the state.

The states that do enforce the collection of such taxes have obviously made sure they are in compliance with this 4 prong test. Routinely we see various trucking interests fighting the imposition of new taxes if they are not in compliance with the above test.

Motor carriers can be subject to as many as 6000 taxing jurisdictions. The motor carrier industry as a whole has been on the front line fighting efforts to place additional tax burdens on carriers.

The case that probably best explains the current climate and the aggressiveness of Pennsylvania, New Jersey and New York was a 1948 case, Central Greyhound Lines, Inc. v Mealy when Central Greyhound was assessed taxes for all gross receipts on a trip that originated in New York but traversed New Jersey and Pennsylvania and back into New York on the way to Buffalo. Greyhound Central argued that PA and NJ wanted their portion of tax as well and that only 57 percent of all miles were actually in New York. New York wanted all of the tax!

THE SOLUTION: There is no solution other than to fight each new tax. Changing existing laws to eliminate these taxes would certainly not be met well by the individual states. However, Pennsylvania and New Jersey offer an amnesty program that will enable a carrier to avoid the unpleasantness of an impoundment while avoiding the unreasonable ransom. The program allows the carrier to come forward, file documents and determine what taxes are due. The carrier is given an opportunity to file the appropriate tax filings and not be stopped in a routine highway check and then be impounded.

With the warm weather approaching carriers should be warned that these states will be on the lookout for carriers who are not paying tax. In some instances the state will hire independent companies that handle the “on the road” activity and they only get paid when they stop a truck. They don’t let you off because then they won’t get paid.

Call the office for more information on the various amnesty programs that are available at this time. That is your best course of action.