1. THE FUTURE OF THE PROGRAM COMPLIANCE REVIEW PROCESS July 2005 IFTA Annual Business Meeting

2. Where Are We Today? Established PCR process Process identifies non-compliance General voluntary compliance No mechanism to ensure compliance

3. Creating a Compliance Mechanism Create process for non-compliance issues identified through PCR to be addressed through dispute resolution process

4. PCR/DRC Process Compliance plan, follow-up and reassessment process 2/3 of full PCRC to approve final determination finding of non-compliance PCRC refers case to DRC for enforcement of non-compliance finding Jurisdiction can protest non-compliance finding DRC reviews briefs and/or holds hearing DRC renders decision DRC decision may be appealed to Board

5. DRC Decision Options No action Immediate penalties Penalties tied to compliance plan dates Request for expulsion

6. PCR/DRC Penalty Provisions Loss of voting power Loss of Board and standing committee seats Double dues 60 days after voting power lost Triple dues 1 year after voting power lost Expulsion resolution 1 year after voting power lost

7. Past Concerns Non-material or insignificant issues raised to dispute Fear of corrective action before time to resolve No appeals process

8. Past Concerns Non-material or insignificant issues raised to dispute Fear of corrective action before time to resolve No appeals process

9. What’s Material? Who Should Decide? PCR Committee PCR Team PCR Director PCR Administrator IFTA, Inc. IFTA Board Individual jurisdiction Jurisdictions as community

10. How do jurisdictions decide what is material? Materiality criteria Governing documents

11. Refining the Governing Documents Compliance review requirements committee Compliance review ballot development committee Jurisdiction sponsored ballots

12. Past Concerns Non-material or insignificant issues raised to dispute Fear of corrective action before time to resolve No appeals process

13. Fear of Corrective Action Before Resolution Ideal World -- Be Proactive ID potential areas of noncompliance prior to a review Make program adjustments as appropriate Initiate ballots

14. Real World -- Not Proactive Enough, Still Not a Problem Reviews scheduled months in advance Review report not issued for 30 days 30 days for jurisdiction response 35 days for Panel to recommend follow-up or reassessment Fair and reasonable follow-up and reassessment plan dates based on jurisdiction input

15. Past Concerns Non-material or insignificant issues raised to dispute Fear of corrective action before time to resolve No appeals process

16. Opportunity for Appeal Jurisdiction input and involvement throughout the process Formal appeal process for referrals to DRC Appeal of DRC finding to the Board

17. Steps to the Future Standing Dispute Resolution Committee Agreement revisions Dispute resolution process revisions PCR Guide revisions 2006 may/shall ballots Best practices guide

18. THE FUTURE OF THE PROGRAM COMPLIANCE REVIEW PROCESS July 2005 IFTA Annual Business Meeting