California Assembly passes higher IRP fees

| Thursday, September 18, 2003

California’s General Assembly has passed the Senate version of a bill that would increase weight-based IRP fees in the state starting in 2004.

Unlike the Assembly version, which would have increased the fees 42 percent, the Senate bill, SB1055, increases the fees 21 percent in the first year.

However, if the bill does not bring in as much revenue as the state expects, then the fees could go up within a year to 34 percent higher than their current level in 2005. And the bill contains a clause that would increase the fee along with California’s rate of inflation.

The Assembly bill, AB1767, passed the lower chamber earlier this year, but stalled on the Senate floor. Meanwhile, the Senate version, which had stalled since late May, was amended and passed by the Assembly Sept. 10. The Senate agreed with the amendments and sent it to the governor Sept. 11.

For standard 18-wheelers, the fee, which according to OOIDA’s Business Services division is now $1,700, would increase initially under the bill to $2,064. If that did not raise the expected level of income, it could go as high as $2,271 the next year. The bill states that after that, “The department [of Motor Vehicles] would be required to adjust the fees by increasing each fee in an amount equal to the increase in the California Consumer Price Index for the current year, as calculated by the Department of Finance.”

The higher fees would be triggered if the state receives less than $789 million.

The fee hike is related to changes made in California’s fees in 2000. Anita Gore, a spokeswoman for the Department of Finance, said that a new law that year changed California’s fees from being based on unladen weight to using laden weight, which put it in compliance with how most member states in the International Registration Plan operate.

The 2000 bill was supposed to be “revenue neutral,” meaning it was supposed to neither add nor subtract from the state’s revenue. But instead, the change left the state highway fund short – some media reports say as much as $160 million short. State officials calculated that an increase of 42 percent would be necessary to make up the difference – the exact amount of fee increase that was proposed in the Assembly bill.

Truckers who run all their miles in California would pay the entire fee; those who run part of their miles there would pay based on what percentage of their total miles they run in California.

--by Mark H. Reddig, associate editor

Mark Reddig can be reached at mreddig@landlinemag.com.

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