Identification of Interstate Motor Vehicles: New York City, Cook County, and New Jersey Tax Identification Requirements; Petition for Determination

AGENCY:

Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION:

Notice; Grant of petition for determination.

SUMMARY:

The FMCSA grants three petitions submitted by the American Trucking Associations (ATA) requesting determinations that the commercial motor vehicle (CMV) identification requirements imposed by the State of New Jersey, New York City, and Cook County, Illinois are preempted by Federal law. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) prohibits States and their political subdivisions from requiring motor carriers to display in or on CMVs any form of identification other than forms required by the Secretary of Transportation, with certain exceptions. FMCSA grants ATA's requests because the three credential display requirements do not qualify for the relevant statutory exception for State display of credentials and are preempted by Federal statute.

DATES:

This decision is effective October 20, 2010.

FOR FURTHER INFORMATION CONTACT:

Genevieve D. Sapir, Office of the Chief Counsel, Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590, (202) 366-7056; e-mail Genevieve.Sapir@dot.gov.

SUPPLEMENTARY INFORMATION:

Background

New Jersey's tax code requires all motor carriers hauling, transporting, or delivering fuel to display a Motor Fuel Transport License Plate and annual Transport License Certificate. This requirement applies to all motor carriers hauling, transporting, or delivering fuel in New Jersey regardless of their State of domicile or registration. New Jersey Statutes Annotated § 54:39-41 and § 54:39-53. New York City's Administrative Code, § 11-809, requires CMVs used principally in New York City or in connection with a business carried on within New York City to pay a tax and display a stamp. The requirement appears to apply whether or not the CMV is registered to an address in New York City. Cook County's Code of Ordinances requires motor vehicle owners residing within the unincorporated area of Cook County to: (a) Display a window sticker showing payment of fees; and (b) paint business vehicle identification information on their vehicles. Article XIV of chapter 74 of the Cook County Code of Ordinances is referred to as the “Cook County Wheel Tax on Motor Vehicles Ordinance.”

Section 4306(a) of SAFETEA-LU, codified at 49 U.S.C. 14506(a), prohibits States from requiring motor carriers to display in or on CMVs any form of identification other than forms required by the Secretary of Transportation. Section 14506(b), however, establishes several exceptions to this prohibition:

(b) Exception.—Notwithstanding subsection (a), a State may continue to require display of credentials that are required—

(1) Under the International Registration Plan under section 31704 [of title 49, United States Code];

(2) Under the International Fuel Tax Agreement under section 31705 [of title 49, United States Code];

(3) Under a State law regarding motor vehicle license plates or other displays that the Secretary determines are appropriate;

(4) In connection with Federal requirements for hazardous materials transportation under section 5103 [of title 49, United States Code]; or

(5) In connection with the Federal vehicle inspection standards under section 31136 [of title 49, United States Code].

The exception relevant to ATA's petitions is § 14506(b)(3), which provides that “a State may continue to require display of credentials that are required * * * under a State law regarding motor vehicle license plates or other displays that the Secretary determines are appropriate.” The Secretary's authority is delegated to FMCSA by 49 CFR 1.73(a)(7).

ATA's petitions seeking determinations, along with the applicable statutes, regulations, and ordinances, are available for inspection in the docket established for this notice.

Public Comments

On October 19, 2009, FMCSA published a notice in the Federal Register, “Identification of Interstate Motor Vehicles: New York City, Cook County and New Jersey Tax Identification Requirements; Petition for Determination” (74 FR 53578), requesting public comment on ATA's petitions. In formulating its decision, FMCSA considered all of the comments received in response to the Agency's notice.

FMCSA received 11 comments, of which 7 were from trade associations, 3 from motor carriers, and 1 from an individual. All commenters supported preemption.

ATA and the Distribution and LTL Carriers Association commented that the credential display requirements are related to revenue raising and that they do not fall under any of the § 14506(b) exceptions. Con-way Inc. commented that the credential display requirements are impediments to interstate commerce. United Parcel Service, Inc. (UPS) commented that, as an interstate carrier operating in many States, it finds credential display requirements to be burdensome. UPS further commented that, although the vehicles in its fleet may be in compliance with State or local tax, fee, or permit requirements, if its drivers cannot display the appropriate credential on demand, the company can nonetheless receive a citation. Martin Storage Co. also commented that the paperwork associated with State and local credential display requirements is burdensome. The Truckload Carriers Association and the Truck Renting and Leasing Association commented that the credential display requirements are not eligible for the § 14506(b)(3) exception because they are not related to vehicle registration. The National Private Truck Council observed that none of the affected jurisdictions submitted comments to justify the credential display requirements.

In addition, FMCSA received a letter from the Office of the State's Attorney of Cook County acknowledging that its credential display requirement is preempted. This letter is also available for review in the docket.

FMCSA Decision

New Jersey's tax credential display requirement is a State-mandated form of identification preempted by 49 U.S.C. 14506(a) and does not qualify for the exception at § 14506(b)(3). First, it is not an identification requirement related to motor vehicle license plates. Even though the credential itself is in the form of a license plate, its purpose does not relate to State licensing of vehicles. Rather, it appears to identify those motor carriers, registered in New Jersey or elsewhere, that have paid State taxes for hauling, transporting, or delivering motor fuel. Second, New Jersey failed to articulate any justification for FMCSA to exercise its delegated discretion to approve the display.

New York City's and Cook County's display requirements are also preempted by 49 U.S.C. 14506(a) because they are identification requirements mandated by political subdivisions of a State. However, the assessment of whether a § 14506(b) exception applies to these display requirements requires a slightly different analysis. The prohibition in § 14506(a) specifically applies to States, political subdivisions of States, interstate agencies and other political agencies of two or more States, whereas the exceptions in § 14506(b) apply to States without mention of political subdivisions or agencies. Consequently, the first question the Agency must answer is whether a § 14506(b) exception can apply to a political subdivision of a State.

Two possible interpretations exist. One is that Congress intended for States, political subdivisions of States, interstate agencies and other political agencies of two or more States to be subject to the general prohibition on display of identification requirements, but only intended for States (and not the other subdivisions and agencies) to be eligible for the exceptions in § 14506(b). The second is that Congress intended the States, as well as political subdivisions and agencies, to be eligible for the exceptions and that its omission of these other entities from § 14506(b) is not evidence of its intent to exclude them from being eligible for the exception. FMCSA believes that the latter is the correct interpretation.

In City of Columbus v. Ours Garage & Wrecker Service, 536 U.S. 424 (2002), the Supreme Court considered a provision with nearly identical language to § 14506 and determined that Congress' exclusion of political subdivisions in the exception was not a sufficiently clear and manifest indication of its intent to preempt local regulation. In reaching this conclusion, the Court made two points that guide our analysis and conclusions here. First, consistent with existing precedent, a political subdivision may exercise whatever portion of State power the State chooses to delegate under its own constitution and laws. Id. at 428. Second, if the exception were interpreted to apply only to States, political subdivisions would be preempted from enforcing laws legitimately enacted by the State pursuant to the exception. The Court found it unlikely that Congress would preserve State power to enact rules but bar routine enforcement through local instrumentalities. Id. at 435.

The Agency concludes that the exceptions in § 14506(b) can apply to New York City's and Cook County's credential display requirements, if they meet the statutory criteria. The only exception relevant to ATA's petition is found in § 14506(b)(3); however, no evidence supports the application of this exception to New York City's and Cook County's credential display requirements. These display requirements are unrelated to State vehicle licensing requirements, and neither jurisdiction articulated any justification for the Agency to exercise its delegated discretion to approve the display. In fact, the only jurisdiction to respond to the Agency, Cook County, conceded that its credential display requirements are preempted by Federal law.

In consideration of the above, FMCSA grants the petitions submitted by ATA. New York City, New Jersey, and Cook County are preempted from imposing and may no longer enforce their credential display requirements.