International Committee IRP Leased Vehicles IRP Leased Vehicle The International Committee has created a sub committee to look into the issues that may exist for the removal of Section 900 of the plan. Over the past several months we have been gathering information and we would like your input in a few areas. 1
IRP Leased Vehicle Section 900 BASE JURISDICTION FOR RENTAL FLEET A rental company applying to register a Rental Fleet under the Plan shall select a Base Jurisdiction for the Fleet according to Section 305; except that when the term of the Lease of the Vehicles in the Fleet is greater than 60 days, the Lessee must (1) have an Established Place of Business in the Base Jurisdiction selected, and (2) the Fleet must accrue distance in the Base Jurisdiction selected. Leasing Overview According to the Truck Rental and Leasing Association, truck leasing is a $25 billion industry TRALA has over 400 full time members These companies purchase 40 percent of all new commercial trucks annually 2
Leasing Section 900 of The Plan mandates additional qualifications on leasing companies not required by other motor carriers Currently leasing companies must meet all the provisions as a registrant and qualifications of Section 305(a) Selection of Base Jurisdiction Vehicle Owner as Registrant Removal of section 900 offers leasing companies the same opportunity administratively as any other motor carrier: Selection of a base jurisdiction for which the leasing company is the registrant and has an established place of business and accrues actual mileage 3
Leasing Company as Registrant Must be licensed by the base jurisdiction to conduct leasing business Is responsible for the records maintenance Is the party which the base jurisdiction audits Is bound by jurisdictional laws regarding tax Is the owner of the equipment binding all liability to them Carries motor vehicle liability insurance coverage Provides maintenance services Leasing Company as Registrant NOT a Service Bureau NOT a Freight Broker 4
Lease Vehicle Lease Vehicle 29 Day Rental Long Term Lease 5
A jurisdiction in the US or Canada That can provide: HAS ADEQUATE STAFFING CARRIER MANAGED PLAIN PAPER CAB CARDS ACCEPTS OUT OF STATE OWNERSHIP SAME DAY ISSUANCE ELETRONIC FUNDING LICENSE PLATE TRANFERABILITY TEMPORARY PERMITS PERMANENT PLATES SELF ISSUANCE LICENSE PLATES ON-LINE WEB BASED SYSTEM 24 HOURS NO VALIDATION DECAL Benefits of Removing Section 900 Jurisdictions Continues to receive registration $$ Eases staffing concerns Lessens workload Carrier maintains database Carrier still responsible for compliance Reduces management costs Leasing Company Administrative efficiency Asset utilization Provides the human resources Responsible for compliance Improves turnaround Plate fees re-utilization 6
Misconceptions Jurisdictions Leasing company Loss of title revenues Loss of tax revenues Unmanageable audits Leases drivers Avoid taxation Avoid audits Leased Vehicle Survey Majority of Canadian Jurisdictions have concerns on how the safety of commercial carriers will be conducted or enforced US Jurisdictions do not seem to have as many concerns with the removal of Section 900 from the pla. 7
Survey Results Is it necessary to treat leased vehicles differently than non leased vehicles? 87% of Canadian Jurisdictions say Yes 87% of US Jurisdictions say No Survey Results Are there administrative concerns unique to long term rental fleets? 87% of Canadian Jurisdictions say Yes 75% of US Jurisdictions say No 8
Survey Results Would removing Section 900 have a negative effect on highway safety? 87% of Canadian Jurisdictions say Yes 94% of US Jurisdictions say No Effect on Safety in Canada NSC will become less effective Inability to monitor hosted vehicles Lack of international data sharing Driver/carrier can evade poor safety rating Inspection programs will be compromised Inspections accepted (both quality and frequency) for hosted vehicles may be less than host jurisdiction 9
National Safety Code NSC is both Federal & Provincial Administered separately by each province (not federal government) Federal legislation aligns NSC programs Carrier will have a NSC number issued by the province where vehicle is plated Province regulates their own NSC carriers NSC challenges in Canada Canada based carrier leasing US plated vehicle BC based Carrier leasing vehicle with NS Plate in 10
Intra-jurisdictional operations Intra + Inter = Inter = prorate Intra + {Inter Intent} = prorate Intra (if <18 months) = prorate Intra + {inaction} = prorate Next Steps CCMTA project group (2005) struck to look at rental/lease vehicle issues. Recommendations US vehicles in Canada to be registered under NSC (ON & QC do this, others don t/can t) North American Data exchange (stalled) Enhance IRE to allow enquiries of US vehicles Plan to require suspension of IRP credential for NSC or USDOT order 11
Minimizing impact on Canada Rental/lease vehicles operated beyond 30 days by Canadian based carrier: Have a CDN NSC # The name of the carrier be included on the registration Are registered/credentialed in the province where the Canadian carrier is based Next steps CCMTA, IRP and Industry need to work together to: Explore options and impacts Prevent erosion of NSC effectiveness Minimize safety impacts 12
US Survey Results Need to define requirements for basing of long term vs. short term leasing How is sales/use tax being paid Resources for auditing of large carriers Resources needed to administer a large fleet US Survey Results Accountability of distance reporting Estimating distance Loss of revenue due to base jurisdiction shopping Enforcement challenges 13
US Survey Results Difficulty to track and monitor lessee (the end user) Insurance concerns How would a large fleet be audited Compliance Audits The purpose of auditing for the Plan: Determine if source documents are compliant with the Plan Verify reported distance that results from source documents being processed by Registrants distance reporting systems. 14
Survey Results: Audit Concerns Very large Registrants could be placed in jurisdictions where resources are not available to audit the Registrants A very high volume of registrations could be placed in jurisdictions where resources are not available to satisfy increased quota demands Survey Results: Audit Concerns Who will maintain the registration records and where will they be presented? What will the Lessor know about the Lessee s operation when it is time to conduct an audit? 15
Survey Results: Audit Concerns How do we track vehicles that might be in separate leases during a registration year? How do we efficiently determine if the requirement of Intent has been met? Questions 1. Is it necessary to treat leased vehicle fleets any differently than non-leased vehicle fleets? 2. Do you have administrative concerns that are unique to long term leased vehicle fleets? 3. What concerns if any do you have if the lessee is located in a different jurisdiction than the lessor? 16
Working group to gather all the information you have provided us today Analyze this information Canadians to work to find solutions to safety concerns Establish ways to identify and address all concerns Possible Ballot for 2013 17