This summer the Oregon Department of Transportation began limiting the number of temporary passes/trip permits a motor carrier can purchase in a 12-month period – a move that one association representative calls “a money grab” that will affect small-business motor carriers located outside the state.
These rules state carriers are required to establish an account when any one vehicle exceeds five temporary passes or when an entire account exceeds 35 temporary passes within one 12-month period.
The Motor Carrier Transportation Division also requires a cash deposit or bond to Ensure the payment of fees, taxes, charges, penalties, and interest when a motor carrier operates on temporary passes.
Joe Rajkovacz, director of Governmental Affairs and Communications for the California Construction Trucking Association and The Western Trucking Alliance, says in the past many carriers based outside of Oregon had found it easier to comply with the state’s weight-mile tax by purchasing a temporary pass for $9 plus the cost of miles traveled in Oregon. (Establishing an account has always required the posting of a $2,000 cash deposit or surety bond in that amount.)
“This new policy will primarily affect small-business motor carriers who have either not wanted to post the $2,000 cash required or are simply not bondable,” he says. “As with all surety bonds, a risk assessment is made (primarily credit history), and even though the cost of posting an actual bond can be very cheap, less than $200 annually, it is not inconceivable that many smaller carriers are simply not bondable.”
Rajkovacz says the new policy in Oregon will force all out-of-state motor carriers to begin paying an additional fee for each temporary pass issued, whether they have established a permanent account or not.
A motor carrier with an established account may qualify for a cash deposit/bond waiver after a 12-month period of reporting and paying weight mile tax reports on vehicles with permanent credentials, according to the Oregon DOT. The account will be reviewed for late filings, suspensions and insufficient funds checks. If the account meets the criteria, the bond requirement may be waived. A cash deposit will be returned and a letter indicating the bond requirement is waived will be sent when there is a surety bond on file and the department has waived the bond or cash deposit.
It says operations solely under temporary passes will not qualify for a cash deposit/bond waiver. A cash deposit/bond may be waived when a carrier ceases operations and the operations have been reviewed by Motor Carrier Audit or after the carrier establishes and operates under a permanent account (with permanent credentials) and becomes eligible for a waiver.
A motor carrier with an established account that has met the total cash deposit requirement can still operate on temporary passes, but it will not qualify for a cash deposit/bond waiver. A motor carrier operating under a temporary account also will be required to apply and be approved for an established account.
“I suspect many owner-operators with their own authority, and owner-operators and drivers working for smaller carriers who have always purchased the trip permits are going to find out about this the hard way when purchasing a permit and the thresholds have been exceeded,” says Rajkovacz.
He calls the new policy by Oregon “nothing more than a money grab” and warns this new policy should also serve as a wake-up call to those thinking about new ways to fund highways.
“Oregon is the darling of the vehicle miles traveled tax crowd as an alternative to fuel taxes at the pump,” he says. “This is ultimately a tax, and if other states emulated Oregon this could conceivably make it impossible for small-business motor carriers to exist. Imagine a world where even a quarter of states required a $2,000 cash bond to be posted. Most small businesses would never have the liquidity to comply."