Illinois General Assembly passes bill to reduce registration fee surcharge

| 7/30/2004

After months of work and numerous attempts, the Illinois General Assembly has finally voted for changes in the rolling stock exemption and the Commercial Distribution Fee.

The fee will drop over the next few years, and, if its opponents have their way, it may disappear completely in an upcoming session of the General Assembly.

Last year, a new law created the Commercial Distribution Fee – a 36 percent surcharge added onto the state's truck registration fees. It also changed the rolling stock exemption. The law, passed as SB841, was signed by Gov. Rod Blagojevich June 20, 2003.

The measure has perhaps been the most talked-about trucking-related measure in the state in recent years. A number of trucking companies and individual owner-operators in Illinois have told Land Line the fee drove them to either close their doors or leave the state.

Several bills have been introduced since then to reduce the fee, some introduced mere weeks after the fee became law. Till now, none had been successful.

That is, until July 24, when one of those measures – HB714 – and its various amendments received the last necessary approval from the General Assembly and was sent to the desk of Gov. Rod Blagojevich.

HB714 does not either fully restore the rolling stock exemption or completely eliminate the Commercial Distribution Fee.

It applies the new rolling stock exemption – essentially, exempting tractors and trailers from sales tax – to vehicles over 16,000 pounds that are used in interstate commerce at least half of the time during the past year. The new law defines half as either 50 percent of its trips or 50 percent of its miles, and lets truckers choose which method to use.

In addition, truckers whose shipments either start out or end up outside of the state – such as grain haulers, port container carriers and others – would also receive the rolling stock exemption.

The bill would also gradually reduce the Commercial Distribution Fee. It would remain a 36 percent surcharge on registration fees until July 1, 2005, when it would drop to 21.5 percent. It would drop to 14.35 percent beginning July 1, 2006.

“Passage of this legislation gives the industry some light at the end of a long, dark tunnel,” Don Schaefer, executive vice president of the Mid-West Truckers Association, said in a written statement. “The past year has truly been negative for the Illinois trucking industry.”

Mary Shaw, a spokeswoman for Sen. George Shadid, D-Pekin – the chair of the Senate Transportation Committee and a co-sponsor of HB714 – said it is possible that the fee could be eliminated entirely.

“He would like to,” she said. “It will basically depend on the budget.”

The fee was created when the state was in the midst of a budget crisis, with state coffers running millions short. But it quickly became apparent that it was having a detrimental effect on the trucking industry.

Earlier this year, figures from the state – made public by the Mid-West Truckers Association – showed that the number of IRP-registered trucks has dropped by nearly 17,000 since last year in Illinois. Truckers and others attributed the drop to the Commercial Distribution Fee.

HB714 has been sent to Gov. Rod Blagojevich. A spokesman for the governor’s office said the bill is being reviewed, and that the governor had not yet taken a formal position on it yet. He will make a decision, however, within the next 60 days.

--by Mark H. Reddig, associate editor

Mark Reddig can be reached at