1/7/2006 2006 Audit Workshop 1

NAFTA Cross-Border Activities

John Gray, FMCSA

Jan Balkin, TML/NADSF

1/7/2006 2006 Audit Workshop 2

NAFTA Overview

1982 – Congressional moratorium on USDOT grants of authority to Mexican and Canadian carriers

1992 – US/MX/CN sign NAFTA 1995 – Operations throughout border

states 2000 – Operations throughout US

1/7/2006 2006 Audit Workshop 3

US/Mexico Truck Traffic on US Highway Network, 2020 (Tons)

Federal Highway AdministrationOffice of Freight Management and Operations

1/7/2006 2006 Audit Workshop 4

Ground Transportation - Responses

Purchase majority ownership in Mexican companies

Interline agreements FMCSA accepted Mexican carrier applications for

US authority but did not act on them Additional congressional requirements imposed

for safety considerations

1/7/2006 2006 Audit Workshop 5

Ground Transportation - Responses

2001: USDOT begins planning for eventual opening – Working Group

Collaboration with Canada, Mexico, States, IRP/IFTA organizations

Formation of Working Group

1/7/2006 2006 Audit Workshop 6

NAFTA Fuel Tax and Registration Working Group

US Border States of Arizona, California, New Mexico, Texas

IRP Inc. IFTA Inc. USDOT Secretariat of Communications & Transportation

(USDOT-equivalent)/Economía (Commerce Dept-equivalent)/Hacienda (Treasury Dept-equivalent)

Transport Canada

1/7/2006 2006 Audit Workshop 7

How the Working Group Fits In

Facilitate cross-border operations Based on 3-step framework

Long-term – Mexico joins IRP and IFTA Interim – Mexican carriers base in border states Short-term – Trip permit operations

1/7/2006 2006 Audit Workshop 8

Principles Adopted

Pursue vision of 3-step process

Develop timelines

Recognize constitutional and legislative limitations of each entity

1/7/2006 2006 Audit Workshop 9

Principles Adopted

Consistent with provisions of NAFTA, no impediment to commerce

No single state bearing an unreasonable administrative or financial burden on implementation

1/7/2006 2006 Audit Workshop 10

Schedule Targets

Interim solution: Summer 2006 (for planning purposes)

1/7/2006 2006 Audit Workshop 11

US Operational Issues Discussed

Assignment of Mexican registrants (IRP), licensees (IFTA)

Credentialing of Mexican carriers

1/7/2006 2006 Audit Workshop 12

Operational Issues, continued

Audit requirements

Fee/Tax Collections

1/7/2006 2006 Audit Workshop 13

Address operational issues to be implemented Here to listen to audit discussions Identify common concerns that may affect border

states’ audit activities of Mexican carriers Take back to Working Group to identify additional

training, educational opportunities

1/7/2006 2006 Audit Workshop 14

Next Steps

Internal state preparations

Continued collaboration between USDOT/SCT/TC

Training and educational opportunities for Mexican carriers (use MX SCT, carrier “chambers” (trade associations)

Track account volumes

Evaluation component

1/7/2006 2006 Audit Workshop 15

Summary Working toward interim solution Continue US/Mexico/Canada cooperation Address other issues as they arise Be prepared to implement when border

opens officially

1/7/2006 2006 Audit Workshop 16

August 2001NAFTA Panel at AAMVA

Nashville, TN

December 2001Meeting to Discuss

FHWA/TML/NADSF ReportMexico City

August 2002Workgroup Meeting

Washington DC

IRP Board MeetingSaskatoon, Saskatchewan

September 2002Working Group Meeting

Phoenix, AZ

12/13/2005

2001-2003 Progress of NAFTA Registration and Fuel Tax Working Group

By TML Information Services Inc. / North American Driver Safety Foundation

February 2003Workgroup Meeting

Phoenix, AZ

November 2002Workgroup Meeting

& IRP Board MeetingPalm Springs, CA

May 2003IRP Board MeetingRancho Mirage, CA

September 2003IRP Board Meeting

Philadelphia, PA

November 2003IRP Annual &

Board MeetingsTampa, FL

December 2003Workgroup Meeting

Phoenix, AZ

October 2003IFTA Board Meeting

Phoenix, AZ

July 2001First Workgroup Meeting

Washington, DC

Dialogue with AAMVA community

on Workgroup’s goals and efforts

Report focuses Mexico on Issue, explains Mexico’s

registration process and identifies

feasible scenarios

Mexico presents letter committing to

work for solutions and proposes border

states basing Mexican carriers

Presentation by DOT/SCTanswering

questions by jurisdictions

Identified specificprovisions of Plans

to remove obstacles for Mexican

carriers to base in border states

July 2003Workgroup Meeting

Mexico City

IFTA Boardapproves resolution to support Workgroup activities

Exploring idea of border states

basing Mexican carriers & strowman

proposal

Discussion of options for Mexico’s

participation in IRP/IFTA

Draft of border states issues grid; concurrence

of border states to act as base for Mexicans

Ballot amends IRP to allow

Mexico to apply for membership

Mexico answers tax and licensing questions, offers

national treatment and facilitation of collections

Consensus on action items & principles for border states

to process Mexican carriers

IRP Board approves

resolution to support Workgroup

activities

Identification of US

and Mexican key players

M E E T I N G S

R E S U L T S

1/7/2006 2006 Audit Workshop 17

12/13/2005

2004 - 2006 Milestones of the NAFTA Registration and Fuel Tax Working Group

By TML Information Services Inc. / North American Driver Safety Foundation

August 2004Ballots set for voting;

Working Groupfocuses on NGA Summary Report and Issue Brief for Governors

November 2004IRP Annual Business

Meeting - Mexico embraces Working

Group activities; reports readiness

to register US fleets

October 2004IFTA ballots

approved

February 2005NGA submits

report summarizing Working Group

activities 2001-2004

January 2006Jurisdiction

implementation of IFTA ballots

April 2004IRP Industry

Advisory Committee approves NAFTA Working Group

resolution of support

August 2004IFTA Industry

Advisory Committee approves NAFTA Working Group

resolution of support

April 2004IFTA Attorneys

Section Meeting; Issue of state

constitution/foreign powers discussed

March 2005IRP ballot

voting closes

June 2004Issue Brief submitted

to NGA for review; summarizes need

for executive support

October 2005Rolling jurisdiction

implementation begins of IRP ballots

May 2005Working Group MeetingImplementation Activities

and Goals Defined