1. Road Fund Enhancement Initiatives Weight Distance Tax (WDT) & Trip Tax Update to Economic & Rural Development Committee November 12, 2009
Secretary Rick Homans
Col. Forrest Smith

2. New Mexico Trucking Industry
Fast Facts from NM Trucking Association – Vic Sheppard
Trucking Industry Employs 46,313 jobs
1 out of 17
Total Trucking Industry Wages in NM: $1.6B
Average Salary $35,114
5,287 Trucking Companies in NM
Mostly small, locally owned businesses
Approximately $488.2M in Federal and NM Roadway Taxes & Fees

3. Issue: Declining Road Fund Revenues
Gas Tax – Revenues Flat
WDT & Special Fuel Taxes – Revenues Down
Down Approximately 20%-25%
Traffic Counts Down – East Bound Down more than West Bound
Freight Coming into California Ports Down
Rail Freight Down
Trip Tax – Revenues Slightly Up
Increased Enforcement by MTD at Ports
Compliance is Critical for Revenue Stream to Road Fund

4. Road Fund (WDT & Trip Tax) Collection Initiative
Collaborative Effort Between TRD, Motor Transportation Division of DPS, and NMDOT
NM is One of Only Four States (Oregon, Kentucky, New York) who Administer a Weight Distance Tax
Other 46 States Apply a Much Higher Registration Fee on Commercial Vehicles
100% of WDT and Trip Tax Revenues goes to State Road Fund – estimated $88 million yearly

5. Weight Distance Tax Vs Trip Tax
Commercial Vehicles Must be Registered with WDT Program
Purchase of WDT ID Permit (E-Permit)
Report and Pay WDT Quarterly Based on Miles Traveled and Weight of Vehicle
Trip Tax
Applied to Commercial Vehicle not Registered with WDT in NM or have NM listed on International Registration Plan (IRP)
Assessed at Port-of-Entry Based on Estimated Miles to be Traveled in NM and Weight of Vehicle
Approximately 10 Times Greater than WDT Rate

6. WDT Vs. Registration Fee

7. Key Events Impacting WDT & Trip Tax Collections and Enforcement
Filed pertaining to validity of “Cab Cards”
MVD Discontinues $5 Annual Filing Fee for Cab Card in FY01
Decline in WDT and Trip Tax Revenues
CR England Lawsuit Filed June 9, 2000
Redesign of WDT Permit
38% Across the Board Increase in WDT Rates
HB st Special Session
Prohibits States from requiring carriers to have any other documents other than International Registration Plan (IRP) and International Fuel Tax Agreement (IFTA)
Redesign and Implementation of E-Permit
Federal SAFTEA-LU Legislation – Effective 6/1/2008

8. Pre-HB15 38% WDT Increase Effective July 1, 2004
FY10: OS/OV & Trip through Oct Distribution; WDT through Nov Distribution
38% WDT Increase Effective July 1, 2004

9. WDT Permit Fee Revenues
For FY10 Permit Renewals in Process – Revenue will be received primarily in Q2 of FY10

10. WDT Enforcement Initiative Plan
Non-payers have Unfair Competitive Advantage to Pricing loads
Enforcement Initiative is Self-Funded Via existing WDT Permit Fee
Endorsed by New Mexico Trucking Association
No Cost to State General Fund
Projected $7 M Positive Impact to State Road Fund

11. Multi-Agency WDT Task Force
Monthly Meeting between Senior Staff at TRD, MTD, and NMDOT
Oversight of WD ROI Plan
Increased Communications
Problems Solution
Identify Opportunities
Creation of WDT Workgroup to Include TRD (MVD, ACD, RPD) & MTD Port of Entries
Allows front-line staff (auditors, collectors, Port of Entry Staff ) to meet and discuss problems, issues, and recommend solutions
Increased Relations with Trucking Industry
Establish New Toll Free Number and IVR System to better direct calls to right functional areas
Increased Utilization of Electronic Communication ( )
Promote of Electronic Filing
Increased New Mexico Highway Safety
Utilization of Technology to Enable MTD to Focus Resources on Highway Safety

12. Trucking Industry Relations
International Registration Plan (IRP)
International Fuel Tax Agreement (IFTA)
Weight Distance Tax & E-Permit
Commercial Drivers License
ITD Support Staff for WDT E-Permit, Registrations & CDL
Motor Vehicle Division – 29 FTE
Dedicated unit for processing WDT Returns
Supports MVD Commercial Vehicle Bureau
Resolves Taxpayer Issues
ITD Support Staff for GenTax and E-Filing (2-3 FTE)
Revenue Processing Division – 5 FTE
Collection of Trip Tax at Port of Entries
Enforcement of WDT Permits
Conducts Safety Inspections on Commercial Vehicles
Homeland Security
Criminal Interdiction
Motor Transportation Division (DPS) –
271.5 FTE
IRP and IFTA Audits & Collections
WDT Audits & Collections
IT Support Staff for Data Warehouse and GenTax (2-3 FTE)
Audit & Compliance Division – 30-FTE

14. Road Fund Enhancements: WDT ROI Initiative
Specifically Requested by NM Trucking Association
Process WDT Quarterly Returns & Payments
Perform Error Corrections on WDT Returns
Provide Taxpayer Assistance on WDT Accounts
Support MVD Commercial Vehicle Bureau
WDT Processing Unit: 5 FTE - $200.0/Yearly

15. Road Fund Enhancements: WDT ROI Initiative
Electronic License Plate/DOT Readers: $275.1/reader
Entry & Exit Readings at the Port of Entry
Anthony, Gallup, Raton, San Jon, Lordsburg
FY10 $1,300.0 and FY11 $825.0 (3 Federally Funded)
Anthony & Gallup – Est. Completion Date: 12/31/09
Remaining Ports Completed by December 31, 2010
2 Mobile Electronic License Plate / DOT Readers -
In-State Compliance
1 received - deployment date: 12/31/2009
FY10 $435.0 / FY11 $435.0
MTD License Plate / DOT Reader Project

16. Road Fund Enhancements: WDT ROI Initiative
FY10/FY11 Cost: $400.0 Yearly
5 PERM (New FY10) FTE and 2 TERM Filled
Hiring Plan for 2 additional TERM
65 New WDT Field and Desk Audits Annually
Average Out-of-State Audit Assessment $14,000
Average In-State Audit Assessment $800
Active Audit & Compliance Function Effects Overall Tax Compliance
Implementation of SB 213
Applies to WDT Reports due after 7/1/2009
Penalty between $100 to $4,000
In addition to other P & I currently in Statute
Audit & Compliance Division WDT Audit Program

17. Road Fund Enhancements: WDT ROI Initiative
TRD has implemented a Compliance Data Warehouse to enhance the ability to identify and collect unpaid taxes.  Internal and external data sources are loaded into the warehouse which has the capability to automatically match and compare third party data to TRD data to determine tax deficiencies due to under reporting, failure to file, or other non-compliance issues.
Enhancement to Data Warehouse Received DoIT Project Certification
Utilize Data from MTD Enforcement Efforts and License Plate / DOT Readers Data , GenTax & International Fuel Tax Agreement (IFTA)
Compare & Score Taxpayers to ID Non-registered, Non-filer, & Mismatch WDT taxpayers located both in and out of state
Field and Desk Audit Selections
Project Letter Selections
Audit & Compliance Division Data Warehouse – $340.0

18. MTD FY09 Port of Entries WDT Enforcement Operations
Enforcement Blitz
WDT and Trip Tax Compliance
Safety of New Mexico Highways
3 Operations at Major Ports of Entry
1 Operation in Various Lea County Locations
Gallup – 8 Drug Seizures: lbs Marijuana / 226 lbs Cocaine
WDT
Non-Filers
Zero Filers
Carriers Detained for Back Taxes
Safety Inspections Conducted §
Citations Issued
Vehicles Out-of-Service
(Safety)
Drivers Out-of-Service (Safety)
364
1,380
141
2,212
1,336
223
151

19. MTD “No Tax No Tolerance” Intrastate Operation
8 Day Enforcement Blitz in the Albuquerque Metro Area & Santa Fe Area on Intrastate Commercial Vehicles
Only 45% of CV identified w/out WDT Permit Stopped due to lack of Manpower
Identified Major WDT Compliance Issue w/Intrastate Commercial Vehicles
2 Mobile License Plate /DOT Readers will Help Increased Compliance
CV w/out WDT Permit
Stopped w/out WDT Permit
CV Towed For No WDT Permit
Safety Inspections Conducted §
Citations Issued
Safety Citations Issued
Vehicles Out-of-Service
(Safety)
Drivers Out-of-Service (Safety)
322
146
140
301
135
183 32 10

20. Shift from Non-filers to Zero-Filers (files WDT return but reflects zero mileage traveled in NM) reflects need for continued monitoring and compliance efforts

21. WDT/Trip Tax Performance Matrix
Increased Tax Collections
WDT Collections over Baseline
MTD Trip Tax Collections over Baseline
MVD WDT Permit Suspension Project
WDT Collections
WD Permits Suspended
Accounts Cleared
MTD Enforcement Efforts
Citations Issued
Citations Dismissed
Safety Inspections Conducted
ACD Audit Efforts
Instate Audits Conducted
Out-of-State Audits Conducted

22. Summary Trucking Industry has a significant impact on NM economy
20% - 25% Decline in interstate freight
Baseline Revenues Collections Down
Compliance essential to Road Fund Revenue Stream