Amicus Curiae Brief — American Trucking Assns., Inc. v. Scheiner

i|

In the CLERK

Supreme Court of the United States

October Term, 1986

American Trucking Associations, Inc., et al. .. Appellants

V.

James I. Scheiner, Secretary of the

Department of Revenue, etal.,................ Appellees

ON APPEAL FROM THE SUPREME COURT

OF PENNSYLVANIA

BRIEF OF THE STATE OF ARKANSAS,

AMICUS CURIAE, |

IN SUPPORT OF APPELLEE

Of Counsel STEVE CLARK

Attorney General of Arkansas

Chris Parker Counsel of Record

Thomas B. Keys 201 E. Markham

Ted Goodloe Little Rock, Arkansas 72201

P.O. Box 2261 (501) 371-2007

Little Rock, Arkansas 72203

i

INTEREST OF AMICUS CURIAE

In its brief on the merits the appellants present a two

pronged attack on the challenged Pennsylvania taxes. The

first, questioning what the Supreme Court of Pennsylvania

found to be a rational restructuring of that state’s motor

vehicle specia! revenue taxes through passage of the “axle

tax” (75 Pa. Cons. Stat. Ann. §9901 et. seq.) and a

simultaneous reduction in some motor vehicle registration

fees, obviously turns to a great extent on the particular tax

payments and privileges secured under the Pennsylvania

user fee package before and after the imposition of the axle

tax. The reach of this kind of challenge is by its nature

somewhat restricted to the parties. The second challenge is

much broader: as the State of Arkansas understands the

appellants’ argument (appellants brief at 28 - 49) it is asking

this Court to declare any reliance upon a non-discrimina-

tory “flat rate” fee as any part of a state's mix of special

revenue highway user fees to be a violation of the

Commerce Clause of the United States Constitution.

A decision on this ground would impact every State in

the union and reverse a solid line of precedent upon which

states have relied in funding their transportation

improvements from at least 1935 through 1978. Moreover,

the impact of this decision (or at least the articulation of its

rationale) could directly and substantially impact the State

of Arkansas in litigation currently pending before this

Court.

In 1983 the Arkansas legislature raised the gross

weight limit for motor vehicles traveling over the highways

of the state from 73,280 pounds to 80,000 pounds. Act 7 of

1983, Ark. Stat. Ann. §75-817 (Supp. 1985). In that same

session the legislature also passed a tax package, Act 685 of

1983, Ark. Stat. Ann. §§75-817.2, 75-817.3 (Supp. 1985) which

applied to “all motor vehicles . . . having a declared gross

weight of 73,281 pounds or more.” Ark. Stat. Ann. §75-817.3

(a) (3). All revenues raised by Act 685 are legislatively

designated as special revenues to be exclusively used for

road construction and repair by the State and its cities and

counties. Ark. Stat. Ann. §758173 m. This non-

discriminatory, special revenue “user fee” tax package is

also being challenged by these appellants in American

Trucking Associations, Inc. v. Gray, appeal pending No.

86-358 (U.S. September 3, 1986).

INTEREST OF AMICUS CURIAE

TABLE OF AUTHORITIES

STATEMENT

ARGUMENT

I.

iii

TABLE OF CONTENTS

„ „% % „ — FP F P ç—— ¼8:Vçß˖ e r

A NONDISCRIMINATORY PARTIAL

FLAT RATE TAX AS PART OF A

STATES MIX OF HIGHWAY USER

FEES DOES NOT VIOLATE THE

COMMERCE CLAUSE

A.

As A Practical Matter This Litiga-

tion Represents An Attempt By The

Largest Truck Companies To Preserve

Their Ability To Exploit Existing

EEE

The Appellant's Average Cost Per

Mile Figures Are a Red Herring

A Facially Non-Discriminatory User

Fee Is Valid Under Capitol Greyhound

v. Brice, 339 U.S. 542 (1950) And

Massachusetts v. United States,

435 U.S. 444 (197)

No Showing Of Manifestly Dispro

portionate Amount .................

Retaliatory Taxes Are Unconstitu-

tional And Can Be Struck Down On

Their Own Merits ..................

*“eeeeeeeeeee hee es

pa ee

iv

. enn ee einen 21

,. d A-l

TABLE OF AUTHORITIES

Cases: Page

Aero Mayflower Transit Co. v. Board of

Railroad Comm'rs, 322 U.S. 495 (19477 17

Aero Mayflower Transit Co. v. Georgia Public Serv.

GED, HP Ws PUD oo cc ccc iccccscccneces: 18

American Trucking Associations, Inc. ». Goldstein,

r ß ̃ u Sea anennene’ 6

American Trucking Associations, Inc. v. Gray,

288 Ark. 488 (1986), Appeal Pending

D ꝶ̃ò !(. ae 6. 18

Armco, Inc. u Hardesty, 467 U.S. 638 (198d) 12

Best & Co. u. Maxwell, 311 U.S. 454 (1940) ............... 14

Boston Stock Exch. v. State Tax Comm'n, 429

rr ole uwe aus coat es ask sw 11, 12

Capitol Greyhound Lines v. Brice, 339 U.S.

h T 14. 18

Clark v. Paul Gray, Inc., 306 U.S. 583 (1939 18

Commonwealth Edison Co. v. Montana, 453 US.

E 17

Complete Auto Transit, Inc. u. Brandy, 430

I Ad 15

Vv

Evansville-Vanderburgh Airport Auth. Dist. v.

Delta Airlines, Inc., 405 U.S. 707 (1972) / 18

Exxon Corp. v. Governor of Maryland, 437 U.S.

// eke eed dss euki a cuckes bus 10

Great Atlantic and Pacific Tea Company v.

Cottrell, 424 U.S. 366 (1970) 21

Lewis u. B. IT. Inv. Managers, Inc., 447 US.

ccc 9

Maryland v. Louisiana, 451 U.S. 725 (1981 11,12

Massachusetts v. United States, 435 U.S. 444 (1978) 16, 18

Nippert v. Richmond, 327 US.

/ ̃ —KT——————A 14

Northwestern States Portland Cement Co. v. f

Minnesota, 358 U.S. 450 (195909 11

Robbins v. Shelby County Taxing Dist., 120 US.

%%% ·A———r.r.. „-K nb eb ein deus 14

Sprout u South Bend, 277 U.S. 163 (1920) 14

Westinghouse Electric Corp. v. Tully, 466

a ee 8 12

Constitution and Statutes:

United States Constitution, Commerce Clause ess i

Ark. Stat. Ann. (Supp. 1985):

oe ne. / / / 2

vi

DEE SevAcernenececcéhésduanebecsceveuesscddetesss i

EE pn ba pd cdcuunhccndcdesecdeudecheserenane i, J. 5

D ˙˙] bbb budeneevereaest i, 4. 5

Ark. Stat. Ann. (Repl. 1979):

ES Dn cnsuadiecs ss aamk teense ³˙ܹůls ⁵õſnn 3

hr ˖·ĩ ³˙¹.A˙· -- 'ͥt ͤ 2

D ˙²˙ ˙——Aͤ—AÄAT.ͤ ÄvÄ1—1„ Ü-“ 3

C /˙ĩ˙7öÿkL⅜eW 2

Pa. Cons. Stat. Ann. tit. 75 59901 et seq.

, a i

Miscellaneous:

American Association of Motor Vehicle Adminis-

trators, Internation Registration Plan with

Official Interpretations, (Rev..1981)................ 3,4

R.L. Polk Company, Polk Motor Vehicle

Registration Manual, (April, 1986)................... 7

United States Department of Labor, Handbook of

Labor Statistics 1975. Reference Edition 19

United States Department of Labor, Consumer

Price Index U.S. City Average 1975-1986 ............ 19

United States Department of Transportation,

Vol. 1. Main Text State Highway Cost Allocation

„„ 9

No. 86-357

In the

Supreme Court of the Anited States

October Term, 1986

American Trucking Associations, Inc., et al. A ppellants

V.

James I. Scheiner, Secretary of the

Department of Revenue, et all. Appellees

ON APPEAL FROM THE SUPREME COURT

OF PENNSYLVANIA

BRIEF OF THE STATE OF ARKANSAS,

AMICUS CURIAE,

IN SUPPORT OF APPELLEE

STATEMENT

The appellants in their brief at 34 - 35, n. 14, have

specifically tied the second prong of their argument in

Scheiner with their still pending suit in ATA v. Gray, No.

86-358, appeal pending ‘U.S. Sept. 3, 1986). This link has

been echoed in the brief filed by Amici Curiae Yellow

Freight System, Inc. et al., at 7 9 and 13, as well as the brief

filed by the State of Oklahoma. Because in some respects

the issues are similar and because the appellants have

chosen to explicitly implicate the Arkansas tax package,

some explanation of that package is required.

The thrust of the challenge in ATA v. Gray, supra, like

the second argument in Scheiner is an allegation of a

“discriminatory impact” of the Act 685 tax package be-

2

tween Arkansas registered motor vehicles and non-

Arkansas registered motor vehicles. In order to assess this

challenge (and see, in short, the artificiality of this

dichotomy) the Court needs some basic facts concerning

both modern truck registration laws and the way in which

the challenged Arkansas tax package actually operates

within the existing registration system. The Court also

needs to understand, at the front end, that under the

challenged Arkansas law it makes absolutely no difference

in either the options for payment available to a carrier or

the tax liability of any individual tax payer whether a

motor vehicle is base-plated in Arkansas or base-plated

elsewhere.

/

A. Truck Registration, Reciprocity, and the IRP:

Arkansas imposes a general statutory requirement

that all motor vehicles be registered in this state in order to

travel on its highways. Ark. Stat. Ann. §§75-809 (Supp.

1985), 75-131, 132 (Repl. 1979). Registration includes

payment of a statutory fee based upon the type of vehicle,

as well as its declared gross weight. Ark. Stat. Ann. §75-201

(Repl. 1979). Since 1945, however, Arkansas officials have

been authorized to enter into reciprocal agreements with

other states to authorize the travel of non-Arkansas

“plated” vehicles. Ark. Stat. Ann. §§75-250, 251 (Repl. 1979).

These agreements fall into two types.

The older of these two kinds of agreerr =nts are known

as “bilateral reciprocity agreements”. The essence of such

an agreement is that Arkansas agrees to allow, say, trucks

base-plated in Rhode Island to travel in Arkansas without

paying the Arkansas fee or securing an Arkansas plate, so

long as Rhode Island accords reciprocal privileges to

Arkansas base-plated vehicles. No money is exchanged.

Arkansas currently has bilateral reciprocity with 15 states,

primarily those in the Northeast.

3

All the remaining states, including all states

contiguous with Arkansas, are, like A Kansas, members of

the International Registration Plan. The IRP is an informal

compact among its participating states, two provisions of

which are important to an understanding of the issues here.

First, registration fees are apportioned among member

jurisdictions based upon the percentage of any carrier's

miles generated in each state.! In other words, suppose a

carrier will travel in Tennessee, Missouri and Arkansas. If

he registers his vehicle in Tennessee (his “Base” state) he

purehases a Tennessee IRP apportioned plate and declares

on the appropriate form that he will travel for example,

25% of his miles in Arkansas, 25% in Tennessee, and 50%

in Missouri. His license fee in Tennessee will be the sum of

25% of the statutory Tennessee fee, 25% of the Arkansas

fee, and 50% of the Missouri fee. He pays this to Tennessee

after which Tennessee then forwards the respective

amounts to Arkansas and Missouri. The second critical

provision of the IRP is related to this: where a motor vehicle

is base-plated makes no difference in the amount any other

state receives in registration fees; therefore, a carrier is

allowed to base-plate in any IRP jurisdiction in which he has

an office with a street address to which records can be

1

IRP § III A States: “A. The registration fee for apportionable

vehicles shall be determined as follows: (1) Divide the In jurisdiction miles

by total miles generated during the preceding year. (2) Determine the

total fees required under the laws of each jurisdiction for full registration

of each vehicle at the regular annual or applicable fees, or for the

unexpired portion of the registration year. (3) Multiply the sum obtained

under Paragraph 2 of this section by the quotient obtained under

Paragraph | of this section International Registration Plan, with Official

Interpretations, American Association of Motor Vehicle Administrators,

(Rev. 1981), at 9. IR manual introduced as PX. 6 in Gray v. ATA, No.

86-358, appeal pending (U.S. Sept. 3, 1986).

4

brought and in which he generates any mileage at all with

any of his vehicies. 2

B. Taxes Imposed Under Act 685 of 1983:

After the gross weight limit in Arkansas was raised

from 73,280 pounds to 80,000, the legislature imposed two

taxes on this new weight category. First, all of those

vehicles which were previously required to pay 4

registration fee to Arkansas are required to calculate that

fee for this new class of vehicles “at a maximum registration

fee for 68,001 to 73,280 pounds, as provided in Subsection (7)

of Subsection (e of Section 24. Ark. Stat. §75-817.2

(Supp. 1985). Second, the Act also imposes the Highway Use

Equalization Tax of Ark. Stat. Ann. §75-817.3 (Supp. 1985),

payable generally at $ .05 a mile up to a max mum payment

of $175.00. The challenged HUE tax portion of the taxes

levied by Act 685 of 1983, Ark. Stat. Ann. §75-817.3 (Supp.

1985), can be analyzed as a flat rate tax of $175.00 with a

payment option for carriers traveling less than 3500 miles in

2

IRP §II (C) (1) states: C. 1. Base Jurisdiction’ means, for purposes of

fleet registration, the jurisdiction where the registrant has an

established place of business, where mileage is accrued by the fleet and

where operational records of such fleet can be made available in

accordance with the provisions of Article XIV. A. . Although ‘an

question has arisen whether all vehicles of a fleet must acerue miles with

the jurisdiction chosen as ‘base’. If this interpretation were adopted, the

registrant would be forced to make certain that every vehicle of a fleet

traveled some of its miles in the ‘base’ each year. This requirement would

contravene the purpose of granting operational flexibility. The Plan is

construed broadly to require only the accrual of miles by the fleet as a

whole: each vehicle need not individually enter the base jurisdiction ” Id.

at 5.

5

Arkansas that provides them with a dollar and cents tax

savings upon payment at a rate of a nickle a mile.

For analytical purposes, there are really three

groupings of motor vehicles from which payment is exacted.

First, wholly intrastate Arkansas carriers with a

declared gross weight of over 73,280 pay a flat registration

fee of $1,044.00 (See, Ark. Stat. Ann. §75-201 (e (7) (Repl.

1979) ) plus a flat $175.00 HUE tax imposed by Ark. Stat.

Ann. §75-817.3 (f) (2). Intrastate carriers do not have the five

cent/mile option because they are not subject to

apportioned registration under the International

Registration Plan and hence do not report their mileage to

anyone.

Second, motor vehicles base-registered in any IRP

signatory state pay an apportioned registration fee to

Arkansas through the International Registration Plan. As

stated above the fees undei this apportioned registration

system are based not on actual miles, but on the percentage

of miles traveled in this state. For example, a heavy motor

vehicle traveling 10% of its miles in Arkansas will pay a

registration fee of 10% of $1,044.00 or $104.40. In addition

such a carrier will pay the HUE tax at a rate of five

cents/mile to a maximum of $175.00 or purchase individual

trip permits at a rate of $8.00/hundred miles. Ark. Stat.

Ann. §75-817.3 (f), (i) (Supp. 1985).

Third, non-IRP registered vehicles secure authority to

travel in Arkansas for registration fee purposes through

“reciprocity”. Such non-Arkansas, non-IRP base registered

vehicles paid no registration fee in this state prior to the

enactment of Act 685 and continue to pay none. See Ark.

Stat. Ann. §75-817.2 and Ark. Stat. Ann. §75-817.3 (b (Repl.

1985). They do however pay a HUE tax (if they declare

through the qualification process a gross weight in

Arkansas in excess of 73,280 pounds) of five cents/mile to a

maximum of $175.00 or purchase individual trip permits at a

rate of $8.00/hundred miles.

6

ARGUMENT

A NONDISCRIMINATORY PARTIAL FLAT RATE

TAX AS PART OF A STATES MIX OF HIGHWAY USER

FEES DOES NOT VIOLATE THE COMMERCE CLAUSE.

A. As A Practical Matter This Litigation Represents

An Attempt By The Largest Truck Companies To

Preserve Their Ability To Exploit Existing Tax

Subsidies.

The trucking industry is only possible (and profitable)

because of the enormous continuing public investment in

highway construction and maintenance. Because of the

“wear and tear caused by their weighes, the heavy hau!

truck is the predominate “consumer” of state road systems.

For example, when Arkansas raised its weight limit from

73,280 pounds to 80,000 pounds the increased weight

resulted in an additional $53,000,000.00 annually in repairs

on Arkansas Interstate and primary road system alone.“

Any system of user fee taxation, then, will (and should) be a

significant cost to the industry and the manner of allocating

these fees will inevitably impact the industry's structure

and development.

In attacking the concept of facially non-discriminatory

flat rate fees, as any part of the permissible mix of user fee

taxes, the appellants and their amicus supporters extol the

traditional two-tier tax system of registration fees and

motor fuel taxes. Yet the record in American Trucking

Associations, Inc. v. Gray, appeal pending No. 83-358 (U.S.

Sept. 3, 1986), demonstrates that this system, instead of

being “tax neutral”, has inevitably subsidized the growth of

huge trucking firms at the expense of owner/operator and

smaller competitors: operating “flexibility” can be

3

This was the damage figure relied upon by the Court in setting the

proposed bond on the request for a preliminary injunction. See, Amerien

Trucking Associations v. Gray, 280 Ark. 258, 657 S.W.2d 207 (1983).

7

purchased cheaply and is then “tax subsidized” enough to

pay tor the enormous overhead of operating a Yellow

Freight or a North American Van Lines.

First of all by adhering to the traditional two tiered

system the appellants under cut their argument that their

real concern is any “flat rate” fee. All states have a regis-

tration fee‘ and registration fees are flat rate taxes,

even registration fees that are apportioned through the

International Registration Plan. Because the resulting fee is

determined by the percentage of miles in a given

jurisdiction, not the actual miles, the fee is merely a flat rate

tax with inherently limited potential as a revenue raiser.

(The political disincentive of raising registration fees on

paper, say $10.00 to get a $1.00 back in the State donned is

rather obvious).

Moreover, it is clear that in actual operation, the IRP

apportioned licensed fee (discussed in the Statement) is a

boon to the heavy interstate haulef with a low percentage

or miles in any single state. Take, for example, four carriers,

each hauling 5,000 miles in Arkansas. The first is a wholly

intrastate carrier who pays $1,044.00 for his Arkansas “J”

tag, or around 20 cents/mile. Ark. Stat. Ann. §75-201 (Repl.

1980). The second is licensed under the IRP and travels

5,000 miles in Arkansas and 5,000 in another state he pays

$522 to Arkansas for his license, or 10 cents/mile. The third

is a coast-to-coast IRP carrier who travels 50,000 miles a

year, 5,000 of which is in Arkansas he pays only $104 for his

license fee or 2 cents/mile. The fourth is a non-IRP licensee

who is licensed in a state with a reciprocity agreement in

Arkansas and he pays absolutely no license fee in this state.

An example of the heavy interstate hauler is the

Transcon Lines Inc., a plaintiff/appellant in ATA v. Gray,

No. 86-358, who because of sheer size is able to operate

4

Polk Motor Vehicle Registration Manual CR.L. Polk Co. April

(1986).

“pony express” style 24 hours a day from coast: to cost.“

Such a company can obviously churn out two or three times

the miles (and therefore pay one half to one third of the

registration fee per mile) of the hardest working

owner/operator.

Second, sheer numbers of trucks, and the “operational

flexibility” those numbers allow (discussed at length by the

Amici Yellow Freight, et. al. in their brief at 4 - 6) means

that the largest companies can travel more full, more of the

time, than their smaller, less flexible competitors. There are

obviously some real efficiencies in that, but there are also

some real subsidies to it under the motor fuel tax. The

record in ATA v. Gray, supra reflected a unanimous

engineering judgment that motor vehicle wear and tear on

the highways increases at an increasing rate as a motor

vehicle's weight increases. © Yet motor fuel efficiency (a key

determinant in the payment of any motor fuel tax)

decreases at a decreasing rate as weight increases. The

result is a subsidy of the highest weight vehicles by those

which are lighter, a subsidy that will only increase with

“The Buffalo driver takes his rest while the Indianapolis driver takes

the same power unit hooked to the same trailer to Kirland, Missouri

where he would rest, the Kirkland driver takes it to Oklahoma City

where he rests, and the Oklahoma City driver takes it to Tecumeari, New

Mexico where he rests, the Tecumcari takes it to Winslow where he rests.

the Winslow driver takes it to Barstow where he rests and then Barstow

a T.

1561.

6

Both the appellant's expert witness, Ralph Johnson and the appelee s

witness, Assistant Chief Engineer Charles Venable concurred that this is

the accepted significance among highway engineers of the empirical

AASHTO road test.

increasing reliance on the motor fuel tax in a state's mix of

highway user fees.

The largest segments of the industry have grown

larger under this system of subsidy. (See, discussion of the

history of the industry at appellant's brief 43 - 45 and

descriptions of Amici Yellow Freight, et. al., operations in

their brief at 2 - 5). The existing tax subsidy pays the

overhead and flexibility can be purchased cheap. The real

challenge to the industry giants of including a partial flat

rate fee (and both the Arkansas HUE tax and the

Pennsylvania axle tax give a dollars and cents tax break to

the casual user) as even part of the mix of user fees, is that

for the first time since the inauguration of reciprocity and

the IRP, buying that flexibility becomes a little more

expensive and the largest companies may lose a little of

their ability to exploit their otherwise, subsidized

competitive edge.

This is the real fight involved in the litigation.

A nondiscriminatory flat rate tax, as long as it is not

disproportionate in amount (see discussion below at p. 13, 14)

should not be unconstitutional. Such taxes do not

differentiate between segments of the industry based on

place of origin. c.. Lewis u B. T. Inv. Managers, Inc, 447

U.S. 27 (1980). To enshrine cheap “operational flexibility” as

a constitutional imperative will merely secure in concrete

(and asphalt) a relative competitive advantage the largest

companies can exploit over the low overhead

owner/operator. This kind of favoring of one segment of the

7

U.S. Dept. of Transportation, Vol J. Main Text State Highway Cost

Allocation Guide, (October, 1984), at III II. “Fuel tax contributions per

with weight, but these contributions increase much less rapidly than

responsiblities. Therefore a single rate fuel charge. planned to match the

lightest vehicle's responsibility, would not achieve the correct revenues

for the heavier vehicles.”

interstate market over another is certainly not required. In

fact this Court has recently declared that it “could not

a retail market.” Exxon Corp. v. Governor of Maryland, 437

U.S. 117, 127 (1980).

B. The Appellant's Average Cost Per Mile Figures

Are a Red Herring.

local non local discrimination is that the appellants’

evidentiary centerpiece of an average cost-per-mile

discrepancy between locally base-registered and non locally

base registered carriers under non-discriminatory flat rate

taxes is truly an artificial dichotomy, a red herring. It

simply is not true, as the appellant's assert in their brief (at

48) that the evidence of their statistical survey shows that

flat highway taxes work to favor intrastate over interstate

commerce and in-state over out of state trucks.

This is clearly not a fight between interstate and

intrastate commerce. As Arkansas noted in its response to

the Jurisdictiona! statement almost all trucks today travel

in interstate commerce: of the 156 carriers noted by the

appellants as being “Arkansas based” trucks, at least 138

were also interstate carriers.

In fact, most of the vehicles on both surveys in ATA v.

Grey and presumably in ATA wv. Scheiner, are base

registered on an apportioned basis under the International

Registration Plan. The significance of this is that, under the

liberal licensing criteria of IRP “base jurisdiction”, where a

vehicle is licensed is no real indicator of whether he is

11

multiplicity of jurisdictions and can and do conveniently

register in several of them. Individual trucks may be base-

plated in a state in which they never even travel. See, note 2.

The record in ATA v. Gray, supra, is full of examples of

how fluid the situation is. For example, Mr. Paul Martinson

testified that the Plaintiff, Diamond Transportation system,

Inc., is a Wisconsin Corporation with headquarters in

Racine, Wisconsin, but licenses its vehicles in Oklahoma.

Many carriers license some vehicles in Arkansas and some

elsewhere, thus appearing on both lists. Even Arkansas

Best Freight licenses its vehicles in Illilnois.“ Doug Hughes,

the ATA official who coordinated the survey information,

admitted that his lists ignore corporate citizenship and the

probably more important indicator of “home office”

domicile. The result, he said, is “Arkansas” companies

which license in other states show up on the “foreign” list

and foreign companies that license in Arkansas show up as

Arkansas registrants. !°

The law is clear that . . [oJne of the fundamental

principles of Commerce Clause jurisprudence is that no

State consistent with the Commerce Clause, may ‘impose a

tax which discriminates against interstate commerce . . by

providing a direct commercial advantage to local business.’

Northwestern States Portland Cement Co. v. Minnesota,

358 U.S. 450, 458 (1959). See Boston Stock Exchange v. State

Tax Commission, 429 U.S. 318, 329 (1977). Maryland v.

Louisiana, 451 U.S. 725, 755 (1981). But the record in these

cases is clear that IRP registered interstate carriers may

not be “local” (in that sense) anywhere. At the very least,

the place where they base register has very little necessary

connection with where that “locality” may be.

9

Gray, PX 45-46.

10

Gray, T. 439.

12

Moreover, whether a particular carrier is Arkansas

base-registered or non-Arkansas base-registered makes

absolutely no difference in the amount of HUE tax he will

ever pay. This is uncontested by the appellants and is a

hallmark of any facially non-discriminatory flat rate tax.

Unlike the decision of where to locate a manufacturing plant

in view of the West Virginia gross receipts tax credit

[Armco v. Hardesty, 467 U.S. 638 (1984) ]. or where to ship

exported goods under the New York franchise tax credit

[Westinghouse Electric Corp. v. Tully, 466 U.S. 388 (1984) },

or where to trade stock in view of the New York State

transfer tax [Boston Stock Exchange v. State Tax

Commission, 429 U.S. 318 (1977) the decision of where to

base-register a motor vehicle in view of the Arkansas or

Pennsylvania tax scheme remains “tax neutral.” Thus, in

terms of those traditional commerce clause concepts

guaranteeing “an area of free trade among the several

states Westinghouse Electric Corp. v. Tully, 466 U.S.

388, 402 (1984), the statistical claims propounded through

the appellant's survey data are essentially irrelevant.

What the ATA survey purports to show is something

about the motor carriers’ “actual operating costs.” An

additional problem with the appellant's survey results,

however, is that by isolating only the Arkansas HUE or

Pennsylvania marker fee portion of the taxes borne by

heavy trucks, the survey is simply not probative of

anything under an “actuality of operation” test. As this

Court recently stated: “A state tax must be assessed in

light of its actual effect considered in conjunction with other

provisions of a State's tax scheme. ‘In each case it is our

duty to determine whether the statute under attack,

whatever its name may be, will in its practical operation

work discrimination against interstate commerce.

[Citations omitted!’ Maryland v. Lowisiana, 451 U.S. 725,

756 (1981). This need to look further than at a single tax is

particularly pressing when the challenged Act itself (as in

Arkansas’ Act 685 of 1983) levied both the HUE tax and a

registration fee on all motor vehicles with a declared gross

13

weight in excess of V.280 pounds. Ark. Stat. Ann.

§§75-817.2, 75-817.3 (Supp. 1985).

An auditor for the Arkansas Highway Department

calculated the registration fee per mile for both Arkansas-

based and non-Arkansas-based carriers appearing on the

surveys introduced in Gray chosen at random. She found a

spread of between .84 to 19.88 cents per mile for the

Arkansas base-registered carriers and between .55 to 1.8

cents per mile for the non-Arkansas base-registered trucks.

Again, the survey data submitted by the appellants tells

nothing about the total tax burden borne by the surveyed

carriers and evidence in the record established that,

without this information, the survey cannot be probative of

the “actuality of operation.”

The appellants have responded to this attack on their

survey results by treating it as an improper application of

the compensatory tax doctrine. (appellants’ brief at 22-24).

Yet this change neatly misses the point: it is a given in

analyzing a mix of legislatively designated special revenue

“user” fees that the whole mix is payment for the privilege

of “consuming” a state's road system. This consumption will

vary based on both actual miles and actual weight of the

vehicle. Anything less sophisticated than a survey showing

total actual costs in relation to actual weight and mileage

(with the additional knowledge that road “wear and tear”

goes up at an increasing rate as weight increases) will not be

probative in assessing the “actuality of operation.” The

difficulty in presenting this kind of proof is why the

traditional standards of special revenue taxation have

allowed the collection mix to rest on a wide variety of bases,

so long as the amount charged is not disproportionate to the

privilege granted.

G A Facially Non-Discriminatory User Fee Is Valid

Under Capitol Greyhound v. Brice, 339, U.S. 542

(1950) And Massachusetts v. United States, 435

U.S. 444 (1978).

14

The appellants admit that the Pennsylvania axle tax

and the old marker fee were facially neutral. But, in their

attempt to develop a substantial constitutional question,

they skirt the essential correlary: It makes absolutely no

difference in the actual tax liability of any individual carrier

what base-plating may have been chosen.

It is of course recognized that any flat rate vehicle tax

will inevitably result in different payments per mile based

upon the number of miles traveled in the taxing jurisdiction.

This will be true even under a tax like that challenged here

in which this result is ameliorated somewhat by the refund

procedure. Although tangential reference is made in the

appellant's brief to numerous contemporary commerce

clause cases, the sole line of doctrinal support that this

feature renders a flat rate tax unconstitutional! is found in

this Court's handling of the “drummer cases” culminating in

Nippert v. Richmond, 327 U.S. 416 (1946); see also Robbins

v. Shelby County Taxing District, 120 U.S. 489 (1887); Best

and Company v. Maxwell, 311 U.S. 454 (1940).

Yet in citing this line of authority [and identifying

with it the bus tax overturned in Sprout v. South Bend, 277

U.S. 163 (1928)], the appellants confront a salient dis-

tinguishing feature: facially neutral taxes that are

special, not general, revenue levies have long been upheld,

even when they are completely flat rate fees.

The theoretical foundation for such legitimacy is that

the tax is not levied on actual use of the roads, but upon the

privilege of making such use. “The fee is for the privilege

for a use as extensive as the carrier wills that it shall be.

There is nothing unreasonable or oppressive in a burden so

imposed .. One wh~ receives a privilege without limit is

not wronged by his own refusal to enjoy it as freely as he

might.” Aero Mayflower Transit Co. v. Georgia Public

Service Commission, 295 U.S. 285, 289 (1935).

In the case of Capitol Greyhound Lines v. Brice, 339

U.S. 542 (1950) decided four years after Nippert, supra, the

— —

15

Court was unanimous in its support of non-mileage based

m or vehicle taxes. Following a lengthy review, the

majority declared “it is clearly within the discretion of the

State to determine whether the compensation for the use of

its highways by automobiles shall be determined by way of

a fee, payable annually, or by a toll based on mileage or

otherwise”. 339 U.S. 542, at 544-545. Even in the dissent

(which revolved around the incidence of the tax being on a

vehicle's purchase rather than a right to use the roads)

Justice Frankfurter favorably reviewed the relevant case

law:

Again, if the State makes clear by disposition of the tax

proceeds or by statutory declaration that the tax is

levied to secure compensation for road use, the tax

classification will be sustained if it may fairly be

attributed to the privilege of road use, as distinguished

from actual use. Compare Interstate Transit, Inc. v.

Lindsey, 283 U.S. 183 (no allocation of proceeds) with

Clark v. Poor, 724 U.S. 554 (allocation); see Appendix,

post, p. 561. Thus, mileage may be ignored and an

annual tax may be based on horespower, Hendrick v.

Maryland, 235 U.S. 160; on carrying capacity, Clark v.

Poor, 274 U.S. 554, and Hicklin v. Coney, 290 U.S. 169;

and on manufacturer's rated capacity, Dirie Ohio

Express Co. u. State Revenue Comm'n, 306 US. 72.

And the Court has upheld flat fees imposed without

regard to size or weight factors, Aero Mayflower

Transit Co. v. Georgia, Public Service Comm'n, 295

U.S. 285; Morf v. Bingaman, 298 U.S. 407; Clark v. Paul

Gray, Inc., 306 U.S. 583; Aero Mayflower Transit Co. v.

Board of Railroad Comm'rs, 332 U.S. 495.

339 U.S. at 551.

The Appellants now insist that this whole body of case

law has been rendered moot sub silentio by the Court in

Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977). Of

course, there is no inconsistency between the result in the

Capitol Greyhound, supra, line of cases and the fourth

prong of the Brady test when the “services provided by the

16

State” are viewed as the opportunity to haul an unlimited

number of miles. In any case, the Supreme Court has

specifically reaffirmed the validity of these cases in a post-

Brady decision. In Massachusetts v. United States, 435 U.S.

444 (1978) the Court validated a flat-rate federal airport tax

by analogy to the “accepted” status of flat rate motor

vehicle taxes:

tax which on its face appears to bear with unequal

430 U.S. 444, 463 (1978).

Commonwealth Edison Co. v. Montana, 453 U.S. 609

(1981), cited by the appellant, does contain dicta that any

proportional tax meets the fourth prong of the Complete

Auto test. Even this dicta however does not purport to

reach as far as its converse, i.e. that no flat rate tax ever can

meet this test. In any event, Commonwealth Edison, supra,

explicitly limits the application of its analysis of the fourth

prong of Complete Auto to general revenue taxes:

Commonwealth Edison Co. v. Montana, 453 U.S. 609, 621

(1981).

The appellants press for review of this settled doctrine

claiming a large volume of Commerce Clause litigation and

inconsistent judicial decisions. The truth is that the only

three State Supreme Courts have been confronted with the

18

validity of facially non diseriminatory motor vehicle special

revenue “user” taxes in which this sort of inherent

disparity in cost per mile played a part in the analysis of the

flat rate aspect of the challenged tax: the Maryland

registration fee, Md. Transp. Code Ann §13-423(a) (1984); the

Arkansas Highway Use Equalization Tax, Ark. Stat. Ann.

§75-817.3 (Supp. 1985); and the Pennsylvania marker fee and

axle tax, Pa. Cons. Stat. Ann. tit. 75 §§2102 (Purdon 1981)

and 9901 et. seq. (Purdon Supp. 1986). In all three instances

the courts upheld the tax relying upon that clear line of

authority emanating from this Court in Aero Mayflower Co.

„ Georgia Public Ser. Comm'n, 295 U.S. 285 (1935) through

Aero Mayflower Transit Co. v. Board of Railroad Comm ers.

332 U.S. 495 (1947) and Capitol Greyhound Lines v. Brice,

339 U.S. 542 (1950) culminating in Evans ville Vanderburgh

Airport Auth. Dist. v. Delta Airlines, Inc., 405 U.S. 707

(1972), and Massachusetts v. United States, 435 US. 444

(1978). See, American Trucking Associations Inc. v.

Goldstein, 483 A.2d 47 (Md. 1984); American Trucking

Associations Inc, v. Gray, 288 Ark. 488, 707 S.W.2d 259

(1986); American Trucking Associations, Inc. v. Scheiner.

509 A.2d 838 (Pa. 1986).

D. No Showing Of Manifestly Disproportionate

Amount.

Throughout this litigation, as well as in ATA v. Gray,

No. 86-358, the appellants have not even attempted to meet

the established test for challenging state imposed highway

user fees. Such levies have been upheld “unless the amount

is shown to be in excess of fair compensation for the

privilege of using state roads”. Capitol Greyhound Lines v.

Brice, 339 U.S. 542, 546-547 (1950), cited in Massachusetts v.

United States, 430 U.S. 444, 463 (1978) [emphasis added]

Moreover, the burden of asserting the requisite “manifest

disproportion” clearly rests on anyone challenging the

validity of the tax. Clark v. Paul Gray, Inc, 306 US. 583

(1939; Capitol Greyhound Lines v. Brice, 339 U.S. 542, 548

(1950).

For example no taxpayer is assessed more than $175.00

under the Arkansas HUE tax [Ark. Stat. Ann. §75-817.2

(Suppl. 1985)] and since this kind of challenge is really

mounted on behalf of the mileage option payees, the actual

dollars and cents charge being questioned is below that

“high dollar” figure. Yet even $175.00 is well within the

constant dollar amount of fees previously held valid by the

Court. For example, the twenty five “1935 dollars”

approved in Aero Mayflower Transit Co. v. Georgia Public

Service Commission, 295 U.S. 285 (1935) equates with

$186.03 in 1983 dollars; '' yet in 1935 the Georgia truck

weight limit was only 12,500 pounds '* compared to

Arkansas’ current 80,000 pounds. In short, the approved fee

in 1935 was for more money and substantially less privilege.

Similarly, in 1950 the Capitol Greyhounds Company

challenged Maryland's levies of $505.17, $580.00, and

$732.55 , an equivalent 1983 flat rate charge would have

been $2,090.00, $2,400.00, and $3,542.00, '4 respectively.

Still, the record in ATA v. Gray, supra, does reflect

that the plaintiff/appellants may not have attempted to

show “excessive” charges because they knew such proof

could not be found.

Leroy Mallory, Director of Transportation for Tyler

Pipe Industries (one of the name-plaintiff/appellants in this

litigation) testified that the actual cost of operating one of

his vehicles was $1.00/mile. '° This is the only cost data in

11

The Consumer Price Index (1967 100 was 40.1 in 1935 and 298.4 in

1983. U.S. Dept. of Labor, Handbook of Labor Statistics 1975 Reference

Edition and Consumer Price Index U.S. City Average 1975 1986.

12

Ga. L., 1991. (Ex. Sess.) p. 114.

13

Capitol Greyhound Lines v. Brice, 399 US. 542, 546 (1950).

14

The Consumer Price Index in 1950 was 72.1; in 1983 the CPI was

298 4.

15

Gray T. 1508.

the record. In 1983 the Arkansas legislature raised its gross

weight limit from 73,280 pounds to 80,000 pounds, which

allowed truck carrying capacity to increase by 6500 pounds

or some 14-16%. This percentage is computed by comparing

the increase with the previous freight capacity of 43,000

pounds. '® Since the HUE tax was imposed to pay for this

increased weight limit, an (at most) 5% increase in

costs/mile (assuming the nickle a mile option, the highest

cost/mile paid by anyone) can not be considered excessive

for a 14-16% increase in load capacity.

This favorable individual carrier cost/benefit analysis

carries through on an industry wide basis.

Ralph Johnson, a transportation engineer and

consultant who was called as a witness by the appellants

themselves, had prepared a study, finding that in 1982 the

industry benefit from an increase in allowable gross weight

from 73,280 pounds to 80,000 in Arkansas would have

amounted to over $115 million a year. Charies Venable, an

engineer for the State, testified that the increased weight

would result in an additional $53 million in needed repairs

annually on Arkansas’ interstate and primary system alone.

[This was the damage figure relied upon by the trial court in

setting the proposed bond on the request for a preliminary

injunction. See, American Trucking Association Inc. v.

Gray, 280 Ark. 258, 657 S.W.2d 207 (1983) |. The Highway

Use Equalization Tax is designed to raise a little over $20

million a year. Thus, on an industry wide basis the funds to

Empty five axle vehicles weigh 28.000 31,000 pounds. Therefore.

under the pre 1983 Arkansas weight limit of 73,280 pounds, freight

capacity would have been around 43,000 pounds. Gray, T 2308.

17

The actual reported savings was $115.8 million annually. UX 2.

Costs and Savings Associated with Changes In Weight Limits on

Arkansas’ Highways”, Counseltrans Inc., (Rockville, Md. Oct. 1982) at 8.

Ralph Johnson called by the appellants was author of the report and

president of Counseltrans, Ine.

21

be raised are not disproportionate to either the private

benefits secured or the public costs incurred.

The structure and amount of the Pennsylvania axle tax

is not so dissimilar that this evidence would not be equally

probative here.

E. Retaliatory Taxes Are Unconstitutional And Can

Be Struck Down On Their Own Merits.

One side issue remains.

Part of the appellant's “cumulative burden argument

is that taxes like the Pennsylvania axle tay and the

Arkansas HUE tax, though facially neutral themselves,

have engendered the imposition of disoriminatory

“retaliatory taxes.” An example of such taxation is that

imposed by the State of Oklahoma. (See its Amicus Brief in

support of the appeliant.) Of course one hallmark of

“mirror” retaliatory taxation is that it is facially

discriminatory. If the industry really wants to cure tl.is

“unseemly economic conflict”, it should do so with a direct

attack on the retaliatory taxes themselves, something the

apellants have avoided. The industry in fact promotes the

threat of mirror retaliation as a legislative weapon to keep

non-discriminatory “third” structure taxes from being

imposed in other states. This Court has had little diffieulty

in dismissing State's attempts to use such unconstitutional

means under a guise of pursuing “free trade” ends. Great

Atlantic and Pacific Tea Company v. Cottrell, 424 U.S. 366,

379 (1976).

SUMMARY

This Court should hold that States can continue to use

partial flat rate tax as part of its mix of highway user fees.

Respectfully submitted,

Respectfully submitted,

Of Counsel STEVE CLARK

Attorney General of Arkansas

Chris Parker Counsel of Record

Thomas B. Keys 201 E. Markham

Ted Goodloe Little Rock, Arkansas 72201

P.O. Box 2261 (501) 371-2007

Little Rock, Arkansas 72203

A-l

APPENDIX

ARK. STAT. ANN.

75-131. Registration and certificate of tithe required.—It

shall be a misdemeanor for any person to drive or move or

for an owner knowingly to permit to be driven or moved

upon any highway any vehicle of a type required to be

registered hereunder which is not registered or for which a

certificate of title has not been .ssued or applied for or for

which the appropriate fee has not been paid when and as

required hereunder, except that when application

accompanied by proper fee has been made for registration

and certificate of title for a vehicle it may be operated

temporarily pending complete registration upon displaying

a duplicate application duly verified or other evidence of

such application or otherwise under rules and regulations

promulgated by the commissioner.

75-250. Commission te make reciprocal. agreements

relating to operation of motor vehicles—Members.—An ex

officio Commission, composed of the Commissioner of

Revenues, who shall serve as Chairman, the Director of

Highways and the Chairman of the Public Service

Commission [Arkansas Transportation Commission}, is

hereby established for the purpose of representing the

State of Arkansas in the matter of making reciprocal!

agreements relating to the operation of motor vehicles.

75-251. Reciprocal agreements as to allocation and

apportionment of registration pursuant to feormula—Safety

rules unaffected.— The Commission is hereby authorized to

negotiate and consummate reciprocal agreements with the

duly authorized officials or representatives of any state or

the several states of the United States, whereby residents

of such other state or states who operate commercial motor

vehicles may allocate and apportion the registration of such

commercial motor vehicles in accordance with any formula

mutually agreed upon between the Commission and the

Also provided, that nothing in this Act shall be construed as

relieving any motor vehicle owner or operator from

complying with all laws, rules and regulations pertaining to

safety of operation of motor vehicles and the highway

maximum weight standards and the preservation of the

highways of this State.

operated upon the highways in compliance with all the

provisions of this Act. He shall register every such vehicle

for a permissible gross weight not exceeding the limitation

set forth in this Act. Every such vehicle shall be equipped

with brakes as required in Section 124 [§75-724] of this Act.

(b) The Commissioner shall insert in the registration

card issued for every such vehicle the gross weight for

which it is registered, and if it is a motor vehicle to be used

for propelling other vehicles he shall separately insert the

total permissible gross weight of such motor vehicle and

other vehicles to be propelled by it. He may also issue a

special plate with such gross weight or weights stated

thereon, which shall be attached to the vehicle and

displayed thereon at all times. It shall be unlawful for any

person to operate any vehicle or combination of vehicles of a

gross weight in excess of that for which registered by the

Commissioner or in excess of the limitations set forth in this

Act. Further. the Commissioner shall implement rules and

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regulations issued by the United States Secretary of

Transportation pertaining to federal use tax payments.

75-817. Single and tandem axle load limit

(d) Subject to the limit upon the weight imposed upon

the highway through any one (1) axle as set forth in

subsections (a), (b) and (c) of this Section, no vehicle, or

combination of vehicles, shall be operated upon the

highways of this state when the gross weight is in excess of

eighty thousand (80,000) pounds. Provided, that the

foregoing maximum gross weights shall be applicable to

vehicles, or combinations of vehicles, operated on highways

in this state that are a part of the federal interstate

highway system or that have been designated by the State

Highway Commission as primary highways, and on all other

highways in this state the maximum gross weight of any

vehicles or combinations thereof shall not exceed sixty-four

thousand (64,000) pounds. Provided, further, that vehicles,

or any combination of vehicles, of a gross weight in excess of

sixty-four thousand (64,000) pounds and not in excess of

seventy-three thousand two hundred and eighty (73,280)

pounds may operate upon the secondary highways of the

State at a speed not in excess of forty (40) miles per hour.

Vehicles, or any combination of vehicles, of a gross weight

in excess of seventy-three thousand two hundred and eighty

(73,280) pounds and not in excess of eighty thousand (80,000)

pounds operating on the secondary highways of the state

shall also be limited to a maximum speed of forty (40) miles

per hour. Provided, that greater gross weights than

permitted may be authorized by special permit issued by

competent authority as authorized by law or lesser gross

weights will be required when highways are posted.

75-817.2 Compliance with highway use equalization tax

law prerequisite to operation with weight up to 80,000

pounds.

Any motor vehicle registered in Arkansas at the

maximum registration fee for 68,001 to 73,280 pounds, as

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provided in Subsection (7) of Subsection (C) of Section 24 [§

75-201] of Act 65 of 1929, as amended, or any motor vehicle

registered in any other state to carry in excess of 73,280

pounds, shall be authorized to operate in this State with a

gross weight of up to 80,000 pounds, in accordance with Act

7 of 1983 [§§ 75-809, 75-814, 75-816—75-817], provided said

vehicle complies with the appropriate Subsections of the

following Section 2 [§ 75-817.3] of this Act, the Highway Use

Equalization Tax Law.

75-817.3. Highway use equalization tax.

(a) As used in this Section of this Act, the following

terms shall have the following meanings:

(1) “Department” means the Director of the Arkansas

State Highway and Transportation Department;

(2) “Division” means the Commissioner of Revenues,

Department of Finance and Administration, State of

Arkansas;

(3) “Motor Vehicle”, as used herein, means all cargo

vehicles required to be registered for use upon the public

highways of this State, designed, used or maintained

primarily for the transportation of property and having a

declared gross weight of 73,281 pounds or more. For the

purpose hereof, truck-tractors, single unit trucks, semi-

trailers and trailers operated in combination thereof shall

constitute a single vehicle. The person having the use or

control, or the right to the use or control of the part of such

a vehicle furnishing the motive power is the highway user

with respect to the entire vehicle and is accordingly subject

as such to the provisions of this Section of this Act;

(3) [ (4)] “Truck” includes the terms “truck” or “truck-

tractor” and “semi-trailer” or trailer when operated in

combination with a truck or truck-tractor;

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(4) [ (5) ] “User” includes any person having the use and

control or the right to the use and control, of any motor

vehicle;

(5) { (6) | “Highway” includes all highways, roads, and

streets of this State generally open to the use of the public

as a way for vehicular traffic;

(6) { (7) ] “Gross weight” means the actual weight of the

truck or truck-tractor, plus the actual weight of the heaviest

semi-trailer or trailer or combinations thereof with which it

is to be operated in combination plus the actual weight of

the heaviest load to be carried thereon.

(7) [(8)] “Arkansas Registered Vehicle” or “Arkansas

Registered Truck” means a vehicle registered in Arkansas

by a user who is an Arkansas resident, and bearing an

Arkansas license plate.

(b) A tax is hereby imposed upon all users, as defined in

Subsection (a), above, of motor vehicles, as herein defined,

in compensation for the use of the highways of this State to

be known as the “Highway Use Equalization Tax”. Such tax

shall be in addition to all other taxes now required to be

paid on such vehicles except as hereinafter provided.

(ec) The Highway Use Equalization Tax shall not apply

to any motor vehicle whose declared gross weight, as

defined in Subsection (a), above, is 73,280 pounds or less; nor

to vehicles used exclusively in hauling unfinished and

unprocessed farm products, forest products, clay minerals

or ores, from the point of production, harvesting or

severance to the point at which the same shall first undergo

any processing, preparation for processing, conversion or

transformation from their raw, natural or severed state; nor

to vehicles used exclusively for hauling animal feed by

owners of livestock or poultry for consumption by livestock

or poultry owned by them; nor to any vehicle owned and

operated by the United States of America or the State of

Arkansas, or any political subdivision thereof.

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(d) The provisions of this Section of this Act shall not

apply to any motor vehicle used on an interstate trip with

an origin or destination within 10 miles of the geographic

boundaries of this State, provided the one-way travel

distance in the State is not over 10 miles.

(e) (1) The user of every vehicle subject to this Section

of this Act and which is an Arkansas registered vehicle,

before operating such vehicle over the highways of this

State, shall qualify such vehicle with the Division.

Qualifications shall be made by application to the Division

on forms to be provided by said Division. Said application

may be filed with the Division at the time of registration of

the vehicle.

(2) Such application shall be accompanied by payment

to the Division of a fee of five dollars ($5.00), to be deposited

into the Constitutional and Fiscal Agencies Fund, which

shall cover the clerical cost of such qualification. Upon

receipt of such application and payment of the tax as

hereinafter determined, the Division shall make appro-

priate record of the vehicle qualified and certify such

qualification on the applicant's registration certificate or a

registration cab card, one of which is to be carried in the cab

of the vehicle at all times. The said registration certificate

or registration cab card shall, in addition to the registration

information and the required certification, show the amount

of tax paid for such vehicle as determined by Subsection (f)

of this Section.

(f) (1) At the time of such qualification of any Arkansas

registered truck subject to this Section which is registered

through the International Registration Plan, the Division

may fix a mileage rate in cents per mile for each truck so

registered and qualified. The Division shall determine the

mileage rate, utilizing the gross weight declared in the

application for registration of the truck, according to the

following table:

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Vehicle Weight (pounds) Mileage Rate (dollars)

73,281 — 80,000 $ 05

The tax determined under this provision for every truck

subject thereto shall be in the amount of the determined

mileage rate multiplied by each mile such truck is operated

over the highways of this State, as reported to the Division

for registration under the International Registration Plan.

(2) At the time of such qualification of any Arkansas

registered truck subject to the provisions of this Section,

every user not registered through the International

Registration Plan shall pay, and every user registered

through the International Registration Plan may elect to

pay, an annual mileage tax in lieu of an amount determined

by the applicable mileage rate set forth by Subsection (f) (1)

of this Section. The Division shall determine such annual

mileage tax by utilizing the gross weight declared in the

application for registration of the truck, 23. to the

following table:

Vehicle Weight (pounds) Mileage Rate (dollars)

73,281 — 80,000 $175

(g) The tax, as determined by either Subsection (f) (1) or

Subsection (f) (2) of this Section, shall become due and

payable at the time of registration. No license shall be

issued, nor operation authority granted, to any Arkansas

registered user subject to the provisions of this Act until

such time as the full amount of the tax determined to be due

under the provisions of this Section, together with all

penalties, shall have been paid.

(h) The Division is hereby authorized to collect those

taxes and fees imposed by this Section upon the Arkansas

registered users subject to the provisions of this Act [

75-817.2, 75-817.3, 75-819%b) J. to make timely deposits into

the State Treasury of all such moneys collected by the

A8

Division, and to administer the provisions of this Section as

they pertain to Arkansas registered users, including the

right to inspect and audit at reasonable times at any place

within this State the books, records and documents of any

Arkansas registered users required to pay the Highway

Use Equalization Tax hereby imposed.

(i) (1) The user of any vehicle, subject to the provisions

of this Section, may, in lieu of qualification in accordance

with the provisions of Subsection (e) of this Section, remit to

the Department either an annual mileage tax in an amount

determined by Subsection (f) (2) of this Section, or pay an

amount determined by the applicable mileage rate set forth

in (f) (1) of this Section, or pay a trip permit fee. It is the

intent of this Act that all users, subject to the provisions of

this Section, must either qualify with the Division as

provided in Subsection (e) of this Section and pay the

appropriate taxes, or comply with the provisions of this

Subsection. Provided, that, all Arkansas registered vehicies

must qualify with the Division and remit such taxes to the

Division. If the user elects to pay the annual mileage ta

the Department, upon application thereof and receipt of

such payment, shall issue an annual mileage tax certificate

to the user which shall, by the user, be affixed to the cab of

such vehicle. If the user elects to pay an amount determined

by the applicable mileage rate set forth in (f) (1) of this

Section, the Department shall utilize the appropriate rate

multiplied by each mile such vehicle was operated over the

highways of this State for the preceding twelve month

period based on mileage records of the user acceptable to

the Department. Upon payment of such amount, the

Department shall issue a certificate to the user, which shall.

by the user, be affixed to the cab of such vehicles. If the user

elects to utilize a trip permit, such trip permits for trucks

with a gross weight of 73,281 pounds through 80,000 pounds

shall be issued at a fee of eight dollars ($8.00) for each 100

miles of travel, rounded to the nearest 100 miles, whether

loaded or unloaded. Said permits shall be issued by the

Department in such forms as it deems appropriate.

A9

(j) The tax provided for in this Section of this Act must

be paid by the users of all applicable vehicles using the

highways of this State, and no reciprocal agreement or

agreement of any nature heretofore or hereafter entered

into between officials of this State and those of any other

State may exempt any user of such vehicles using the

highways of this State from the provisions of this Section of

this Act and payment of the tax levied by this Section of

this Act.

(k) Any user found operating any vehicle subject to the

provisions of this Section of this Act over the highways of

this State without complying with this Section or without

having available in or on the cab thereof the appropriate

certificate or trip permit required by this Section, shall be

guilty of a misdemeanor and upon conviction thereof shall

be punished by a fine of no less than two hundred dollars

3200.00 and not more than five hundred dollars ($500.00)

for the first offense and of no less than five hundred dollars

($500.00) and not more than one thousand dollars ($1,000.00)

for each subsequent offense.

h This Section of this Act shall be liberally construed

to effectuate the purposes thereof.

(m) All fees, taxes, penalties and interest collected

under the provisions of this Section of this Act not

specifically classified as “Constitutional! and Fiscal Agencies

Funds” shall be classified as “special revenues” and shall be

deposited in the State Treasury, and the net amount thereof

shall be transferred by the State Treasurer on the last

business day of each month: 15% of the amount thereof, to

the County Aid Fund; 15% of the amount thereof, to the

Municipal Aid Fund; and 70% of the amount thereof, to the

State Highway Department Fund, such funds to be further

disbursed in the same manner and used for the same

purposes as is set out in the “Arkansas Highway Revenue

Distribution Law.”

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