ORDER NO. 95-1218

ENTERED NOV 21 1995

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

AR 310

DISPOSITION: RULES ADOPTED

On August 1, 1995, the Public Utility Commission of Oregon published a notice of intent to adopt and amend rules in the Oregon Bulletin published by the Oregon Secretary of State. The notice proposes to adopt OAR 860-61-065 and amend OAR 860-61-040, 860-61-050, 860-61-060, and 860-61-070.

On September 20, 1995, Allen Scott, a Hearings Officer for the Commission, conducted a public hearing relating to these rules. Four persons offered comment. In addition, the Commission received four written comments. The written and oral comments are discussed below.

The Commission considered this matter at a public meeting on November 21, 1995, and adopted the staff proposals.

FINDINGS OF FACT

Background

The most significant proposed changes are increases in penalties for violation of motor carrier regulations unrelated to safety. Since the existing rules were established in 1992, various trucking industry groups have questioned whether penalties are sufficient to deter offenders. A PUC staff task force considered changes and developed the proposals involved in this case. The proposed penalty increases are intended to make PUC enforcement efforts more effective.

The amendments also set out policy relating to mitigation of penalties. In addition, several "housekeeping" amendments are proposed in response to changes resulting from federal preemption legislation passed in 1994 and the 1995 Oregon Legislature’s enactment of Senate Bill 318, which revised state motor carrier law.

OAR 860-61-040 and 860-61-050

These two rules presently address penalties for violations of both safety and economic regulation provisions. As amended, the rules address only safety-related violations (except hazardous materials regulations). There are no changes to the penalty and mitigation guidelines for violation of safety regulations.

OAR 860-61-060

This rule addresses penalties for operating without authority in violation of ORS 767.105 and for aiding and abetting such violations. As amended, the rule separately addresses the two circumstances in which a person may violate the rule: when the person has been issued operating authority but operates while that authority is suspended; and where the person involved has not been issued any authority.

Operating While Suspended. In OAR 860-61-060(1), staff proposes no changes in the Level I, II, and III fines for carriers who operate while suspended: $100, $250, and $500, respectively. Level II penalties still will come into effect when the carrier again operates while suspended within five years of a Level I action. For such carriers, the rule continues to allow for the imposition of previously suspended penalties and the suspension of the carrier’s operating authority for five working days. Level III penalties apply when someone operates while suspended within two years of a Level II action. This is a change from the present time period of 12 months. The Level III penalty provisions also continue to provide for suspension of authority for five working days or cancellation of authority if warranted.

In determining the number of violations a carrier commits when operating while suspended, the amended rule assesses one violation for each vehicle operated on a given day.

Operating Where No Operating Authority Has Been Issued. Sub-sections

(3) and (4) set out the proposed penalty scheme for carriers who operate without a certificate or permit. The proposal involves a substantial increase in the penalties for such carriers. The proposal is based upon staff’s conclusion that these violations are the most serious types of violation. A carrier who operates outside the regulatory scheme because it is not registered with the PUC is not likely to be subject to safety and weight-mile tax audits. Moreover, a carrier operating without authority also enjoys a substantial and unfair competitive advantage over carriers with authority because it does not pay the cost of operations assumed by legally registered companies.

The proposal increases the Level I penalty from $100 to $500 for each movement made. The Level II penalty, applicable to those who operate without authority within five years of a Level I action, would be raised from $250 to $500 per violation. The penalty rule continues to call for imposition of previously suspended penalties for Level II violations and allows the Commission to suspend the operator’s authority for five working days (if there is any authority to suspend). Level III penalties, applicable to those who operate without authority within two years of a Level II action, remain unchanged at $500 per violation plus suspension of authority for five working days or cancellation of authority if warranted.

Under this portion of the rule, a carrier commits one violation for each movement made without proper operating authority.

General Provisions. For both types of violations described above, the rule has a provision that a Level II complaint may be filed against a defendant who commits violations while a Level I complaint alleging similar violations is pending. Currently, the filing of such a complaint would have to wait until the Commission issues a penalty order establishing violations in the first complaint. This change is based upon staff’s view that some defendants continue to violate regulations during the period of time after a Level I complaint has been filed and before a penalty order is issued. The new provision will allow staff to file a second complaint seeking greater penalties for those new alleged violations. The Commission can then decide both complaints in a consolidated proceeding.

The proposed amendment also removes references to violation of ORS 767.510, relating to contracts for transportation of logs. That statute was repealed by the 1995 Oregon Legislature.

OAR 860-61-065

This is a new rule proposed by staff. It addresses violations of ORS Chapters 767 or 768 or any rule or order of the Commission relating to those chapters which have not otherwise been provided for in the Commission’s rules. These violations include matters such as the following: a), violations relating to brokerage of transportation services; b), registration of vehicles; c), vehicle plates, markers, or other authorized identification; d), economic regulation of transportation of passengers and household goods, except rates; e), rates related to the transportation of passengers and household goods; and f), other violations not included in

a) through e).

The penalty guidelines in this rule are the same as those in 860-61-060,

except Level I, II, and III complaints will all assess $100 for each violation.

For the purpose of determining whether a defendant is subject to a first-time

Level I complaint, the rule defines "similar violations" by listing the various types of offenses. The classifications are described in the a) through e) above.

Subsection (2)(a), describing whether the defendant is to be penalized at Level I, provides that a defendant will be penalized at a higher level only when he or she violates a similar regulation twice within the specified period of time.

For the purpose of determining the number of violations a carrier commits when operating without registration or without a PUC plate, marker, or temporary pass, the rule provides that carriers commit one violation for each unregistered vehicle operating in a given month and one violation per day for each vehicle operating without a plate, marker, or pass.

OAR 860-61-070

This rule is modified to contain the general mitigation guidelines for penalties levied under both OAR 860-61-060 and 860-61-065.

Level I mitigation continues to provide that 50 percent of the monetary penalty may be suspended on condition that the defendant not commit a similar violation for a specified period of time. At Level II, standard mitigation results in suspension of the requested five-day suspension of authority.

The rule modifies the present rule by increasing the "probationary" period for a Level I violation from 12 months to 24 months. For example, carriers accorded standard mitigation in a complaint for operating without authority and who remain in compliance for the 24 months, would actually pay $250 (instead of the current $50) per violation. The remaining $250 would be permanently suspended.

The other significant change to mitigation involves adding a section that addresses deviations from standard mitigation guidelines. Staff proposes that the rule read as follows: "The Commission will consider the history of violations by the defendant and the number of violations charged in determining whether the above mitigation is appropriate." Staff changed this proposal from its original proposal, which would have involved consideration of "the intent" of the defendant, because staff concluded that determining intent is difficult.

. The proposed rule describes five scenarios constituting examples of exceptional circumstances that the Commission would consider worthy of deviation from standard mitigation guidelines.

The proposed amendment also removes references to violation of ORS 767.510, relating to contracts for transportation of logs. This statute was repealed by the 1995 Oregon Legislature.

Public Comment

At the hearing, representatives of the Oregon Truckers’ Association and the Oregon Draymen and Warehousemen’s Association expressed support for the rule changes, generally expressing the view that the Commission needs to enhance penalties to reduce violations. The OD&WA representative did, however, question the need for an increase of the "probationary" period from 12 months to 24 months. Another carrier expressed puzzlement that the Commission is still attempting to enforce statutes and regulations relating to "authority," given the changes in the Commission’s jurisdiction over motor carrier operations.

In written comments, a representative of All America Moving of Portland expressed support for the enhanced penalties. However, he asserted that even the increase in penalties to $500 for operating without authority will not be sufficient to stop unauthorized movements of household goods. He asked that the Commission increase the penalties to a minimum of $1,000 with no suspension of a portion of the penalty. A representative of Heaverlo Auctions, of Yakima, Washington, offered the opinion that if the Commission made it easier to obtain permits at the border, fewer trucks would operate without permits. He further claimed that increasing penalties is not the answer and will make it easier for big business and harder for the "little guy." He suggested that the Commission get its house in order first before doing anything else.

Two attorneys who have represented many motor carriers offered written comments. David White asserted that the increased penalties for violating registration requirements are out of proportion to the offense. He noted that the PUC’s oversight of motor carrier transportation will soon end and asked that the Commission defer any decision on the level of penalties to its successor agency. He also disputed the notion that increases in the penalties would make enforcement efforts more effective, citing the lack of empirical evidence to support that conclusion. Russell M. Allen noted the impending transfer of authority over motor carrier regulation to the Oregon Department of Transportation. He suggested that these amendments will have the effect of frustrating legislative intent because the Commission will have no authority to enforce them. He suggested that instead of attempting to "go under with all guns firing" the Commission should "go gracefully into the night."

OPINION

The Commission believes that the proposed new rule and amendments are appropriate. They are the product of a lengthy process involving consideration by a staff task force and contribution by industry representatives. The fact that our authority over these matters will soon be transferred to the Oregon Department of Transportation is not a sound argument against the adoption of these rules.

The Commission concludes that the proposed new rule and amendments are appropriate and should be adopted.

CONCLUSIONS OF LAW

The proposed new rule and the proposed amendments set out in Appendix A to this order are appropriate and should be adopted.

ORDER

IT IS ORDERED that the adoption and amendments set out in Appendix A to this order are adopted.

Made, entered, and effective .

A party may request rehearing or reconsideration of this order within 60 days from the date of service pursuant to ORS 756.561. A party may appeal this order pursuant to ORS 756.580.