Joint Interim Committee to Study Compliance by Foreign Motor Carriers Entering Arizona Under the NAFTA Treaty: final report

              JOINT INTERIM COMMITTEE TO STUDY COMPLIANCE BY
FOREIGN MOTOR CARRIERS ENTERING ARIZONA UNDER
THENAFTATREATY
FINAL REPORT
DECEMBER 31, 1995
COMMITTEE MEMBERS
Representative Jerry Overton
Co- Chair
Representative Joe Eddie Lopez
Representative Paul Mortensen
Senator Keith Bee
Co- Chair
Senator Victor Soltero
Senator John Wettaw
TABLE OF CONTENTS
PAGE
Formation and Mandate of the Committee ..................................................... 1
Activities of the Committee ........................................................................ 2
LIST OF APPENDICES
Appendix 1 ................................................. Minutes of meeting: September 28. 1995
Appendix 2 ....................................................... Minutes of meeting: October 23. 1995
Appendix 3 ................................................................. . Legislation. House Bill 2003
Appendix 4 .............................................................. . Bill Summary: House Bill 2003
Appendix 5 .................................................................. Fact Sheet: Senate Bill 1003
I. FORMATION. MEMBERSHIP AND MANDATE OF THE COMMITTEE
The Joint Interim Committee to Study Compliance by Foreign Motor Carriers Entering Arizona
Under the NAFTA Treaty was established consisting of the following members:
1. Three members of the Arizona House of Representatives with no more than two from the
same political party.
2. Three members of the Arizona Senate with no more than two from the same political party.
This committee was formed with the approval of the Speaker of the House and the President of
the Senate.
Members :
Representative Jerry Overton Co- Chair, ( R) District 15
Representative Joe Eddie Lopez, ( D) District 22
Representative Paul Mortensen, ( R) District 29
Senator Keith Bee Co- Chair, ( R) District 9
Senator Victor Soltero, ( D) District 10
Senator John Wettaw, ( R) District 2
11. ACTIVITIES OF THE COMMITTEE
September 28. 1995
The Committee met on Thursday, September 28, 1995. Representative Overton explained that
the Committee had been formed based on discussions of the Joint Legislative Review Committee
on Transportation between Sonora, Mexico and Arizona. He stated that under the NAFTA treaty,
which would become effective December 17, 1995, that foreign motor carriers would be entering
Arizona and traveling across its roadways.
The Committee was formed to alleviate concerns expressed during the Review Committee between
Sonora, Mexico and Arizona and to draft possible legislation if needed.
Presentations and discussions were given by:
Jim Douglas, Arizona Department of Transportation ( ADOT)
George Bays, Arizona Department of Transportation ( ADOT)
Erin Klug, Arizona Department of Insurance
Tony Ortiz, Federal Highway Administration ( FHA)
Captain Gary Hughes, Department of Public Safety ( DPS)
Terry Smalley , Arizona Motor Transport Association
The Committee heard testimony on the effects of NAFTA, what current laws exist, and what will
be needed before December 17, 1995. It was decided that there would be a potential problem for
Arizona if nothing were done to prepare for the implementation of NAFTA, and that a second
meeting of the Committee would be needed to work out possible recommendations.
The Committee also discussed if a Special Legislative Session might be needed to pass legislation
before December 17.
October 23. 1995
The Committee met again on Monday, October 23, 1995. The Committee reviewed and discussed
draft legislation that was developed jointly by the Governor's Office, the Department of Public
Safety, the Department of Insurance, and the Department of Transportation.
Additionally. Senator Bee relayed his intent to introduce a Joint Concurrent Resolution during
regular session asking for additional funding for the U. S. Customs Office to more adequately
supply enforcement of federal motor carrier regulations along U. S. borders.
Presentations and discussions were given by:
Jim Douglas, Arizona Department of Transportation ( ADOT)
George Bays, Arizona Department of Transportation ( ADOT)
Tony Oniz, Federal Highway Administration ( FHA)
Terry Smalley, Arizona Motor Transport Association
It was the intent of the Committee that a final draft of the proposed legislation be developed for
a special legislative session.
ARIZONA STATE LEGISLATURE
Minutes of the
JOINT INTERIM COMMITTEE TO STUDY COMPLIANCE BY
FOREIGN MOTOR CARRIERS ENTERING ARIZONA
UNDER THE NAFTA TREATY
Thursday, September 28, 1995
10: OO a. m. - House Hearing Room 2
Co- Chairman Jerry Overton called the meeting to order at 10: lO a. m. and attendance was
noted.
MEMBERS PRESENT
Senator Soltero
Representative Lopez
Representative Mortensen
Representative Overton, Co- Chairman
Senator Bee, Co- Chairman
MEMBERS ABSENT
Senator Wettaw
Representative Overton explained this Committee had been formed as the result of
information received recently at an Arizona- Sonora hearing in which the effect foreign
motor carriers would have on Arizona as a result of the North American Free Trade
Agreement ( NAFTA) was discussed. Representative Overton requested a committee be
formed through the Speaker of the House's and the President of the Senate's Office to
address the possibility of drafting legislation to alleviate concerns expressed during the
September 7, 1995 meeting of the Arizona- Sonora Committee. Representative Overton
suggested a Special Session might be necessary in order to prepare legislation prior to the
December 17, 1995 date which signifies the beginning of Mexican commercial motor
vehicles being allowed wider access to the United States. Representative Overton
introduced Brad Lundall, House Staff for the Committee and Martin Harrison and Chad
Norris, House Staff for the Democratic Staff.
Senator Bee, Co- Chairman of the Committee, stated he was pleased the Committee was
formed and that he hoped it would be able to make positive changes for the State.
Representative Overton explained that as a result of the NAFTA treaty, the effect on
Arizona will be startling as Mexican trucks are allowed free access around the State and
will be treated equally with United States trucks. Representative Overton listed areas of
concern regarding Mexican trucks such as safety issues, weight limits, insurance coverage,
and a manner for collecting revenues and/ or taxes for support of the highways.
APPENDIX # 1
MEETING OF THE JOINT INTERIM COMMITTEE TO STUDY September 28, 1995
COMPLIANCE BY FOREIGN MOTOR CARRIERS ENTERING Page 2
ARIZONA UNDER THE NAFTA TREATY
Representative Overton informed the Committee there are two categories of trucks, short
haul and long haul. He was concerned the State of Arizona is unprepared for the heavy
volume of trucks expected to cross the border each day and that the Federal government
has laid an " unfunded mandate" on the States. Representative Overton stressed the need
for the State Legislature to see that Arizona laws are enforced and he believed it is
inadequate for only one per cent of the trucks coming into the country to be inspected for
safety violations. Representative Overton referred the Committee to some ideas he had
listed ( filed with original minutes) for a Special Session and said there had been various
projections on how many trucks this could affect. His greatest concern was that Arizona
is not prepared for this.
Jim Douglas, Arizona Department of Transportation ( ADOT), said the two main issues
affected by the changes resulting from NAFTA will be the question of adequate staffing at
the ports by December 17, 1995 and the effect of mandatory auto insurance laws in
Arizona on carriers from Mexico. Mr. Douglas explained that a single trip permit purchased
in either Arizona or Mexico does not require any sort of proof of financial responsibility. He
also suggested proof of financial responsibility or vehicle insurance be required when
purchasing single trip permits. Mr. Douglas suggested the issue of insurance could be
addressed during the regular legislative session as it had not been a real problem in the
past. Mr. Douglas suggested changing Arizona Revised Statute to specifically require
Mexican carriers to carry evidence of insurance that has been purchased from a company
that does business in one of the fifty states, the District of Columbia or Canada.
Senator Bee asked if it was correct to say motor carriers must have proof of insurance
when they register their vehicles. Mr. Douglas said it was and that it would also be
assumed by law enforcement that if a truck has current registration, it would have current
insurance coverage. Senator Bee expressed concern with creating a new paper flow for
domestic domiciled trucks. Mr. Douglas suggested choosing an alternate registration
method which would allow Mexican carriers to register as an Arizona based carrier. This
method would not need legislation to enact.
Representative Lopez questioned Mr. Douglas on the number of additional staff needed
for the border port crossings, recalling an earlier meeting in which it was mentioned that
two to four additional people might be necessary for staffing. Mr. Douglas explained that
estimate was based on initial NAFTA impact statements. Representative Lopez asked how
those positions would be funded. Mr. Douglas said the salaries would have to be state
funded. Mr. Douglas further stressed his support for requiring those who purchase a single
trip permit to also have proof of financial responsibility. Representative Lopez asked Mr.
Douglas to estimate the number of trips the NAFTA changes will result in. Mr. Douglas
said it was his opinion that the number of single trip permits will decrease.
MEETING OF THE JOINT INTERIM COMMITTEE TO STUDY September 28, 1995
COMPLIANCE BY FOREIGN MOTOR CARRIERS ENTERING Page 3
ARIZONA UNDER THE NAFTA TREATY
Representative Overton asked how a Mexican firm would get a permit in Mexico for
Arizona. Mr. Douglas explained ADOT would provide an application to the carrier who
would need to send proof of licensure along with the application and a Federal Form " En
which is used to show financial responsibility. Mr. Douglas added under current law,
Arizona does not accept proof of insurance from companies who issue only in Mexico.
Representative Overton questioned the ability of one to collect in the case of an accident
caused by someone who does not carry American insurance. Mr. Douglas said in that
instance, he would be likely to contact his own insurance carrier for payment.
Senator Soltero asked for further information on insurance purchased in the United States
and used in Mexico. Mr. Douglas explained there was no clear answer on that question
and that there would be a meeting among those interested parties, including the
Department of Insurance ( DOI), to consider options involving hauling trucks and insurance.
Representative Overton asked if Mexico recognizes insurance purchased in the United
States. Mr. Douglas said he did not know. Representative Overton expressed concern
regarding the amount of resources available to man the entry ports on the borders full time.
Mr. Douglas explained due to revisions in the coverage and the allocation of sufficient
dollars, it was possible to adequately staff all of the ports of entry. Representative Overton
asked if only 1 % of the trucks crossing the border were checked at this time. Mr. Douglas
said that the number was greater than 50% and at the Nogales crossing, the number was
100%. Mr. Douglas added there are currently unmanned ports and that the ports that are
manned are manned only during regular business hours.
Representative Mortensen asked how much time is needed for a check and what it
consists of. Mr. Douglas said the vehicle weight and credentials are checked and the truck
is usually done in under three minutes. Representative Mortensen asked for a description
of the unmanned ports.
George Bays, ADOT, explained Fredonia, Springerville and Window Rock were
unmanned ports. Representative Overton asked what sort of volume the port at Douglas
experiences. Mr. Bays said the Douglas port received the third highest volume of vehicles
and that approximately 82% of the vehicles going through are checked.
Representative Overton asked how highway taxes could be collected by the State from the
other trucking companies within the United States. Mr. Douglas explained collections are
made on a monthly or quarterly basis upon licensure of the motor carrier in Arizona. Mr.
Douglas and Representative Overton discussed the possibility of an audit system with
Mexico. Representative Overton asked why ADOT believes a Special Session is
unnecessary. Mr. Douglas explained that there are thousands of motor carriers in the
State and under current statute, all are required to provide proof of insurance.
MEETING OF THE JOINT INTERIM COMMITTEE TO STUDY September 28, 1995
COMPLIANCE BY FOREIGN MOTOR CARRIERS ENTERING Page 4
ARIZONA UNDER THE NAFTA TREATY
Erin Klug, Executive Assistant, Department of Insurance, explained currently if
insurance is purchased in another state or country, Arizona has no jurisdiction over that
product or company. If insurance is purchased in Mexico or another state or country by
a driver, the insurance is valid if there is a statutory agent in place in Arizona.
Representative Overton asked Ms. Klug if, as an Arizona driver, she was comfortable with
the existing situation. Ms. Klug said because she was not familiar with the solvency of the
companies issuing claims in Mexico, she would have concerns about how their insurance
compares to policies issued in the United States. Representative Overton asked if there
was any reason Arizona could not require Mexican insurance companies to register in
Arizona. Ms. Klug explained that might be Arizona mandating a foreign country to follow
Arizona law which is not proper. Representative Overton asked what recourse through
DO1 an Arizona citizen hit by a Mexican truck would have. Ms. Klug said some Arizona
companies ( the insurer of the Arizona citizen's vehicle) might assist in getting payment
from the Mexican company, but that they were not required to do so. Representative
Overton asked if that individual would be able to sue the company in Mexico. Ms. Klug
said it was assumed one could but added the DOl's authority was only valid for those
insurance companies licensed in Arizona. Representative Overton spoke on the
establishment of an agent in countries outside of the United States in order to sell goods
in that country and suggested that option for Arizona insurance companies.
Tony Ortiz, State Director, Federal Highway Administration ( FHA), explained Mexican
motor carriers are required to carry an Interstate Commerce Commission ( ICC) Certificate
of Registration and insurance form MCS- 90 with accompanying insurance identification
card, binder or similar document. Mr. Ortii added he was not aware of any Mexican
insurance agencies authorized to provide insurance for operating within the United States.
Mr. Ortiz suggested that rather than proposing legislation, the State of Arizona could adopt
rules pertaining to entry into Arizona from those listed by the Federal Government.
Senator Soltero noted there are already commercial trucks coming into the United States
from Mexico and asked what would be different come December 17, 1995. Mr. Ortiz
explained Mexican trucks will have state- wide access rather than just the commercial zone
which will affect more people in the State.
Representative Overton asked if Federal rules were adopted into Arizona law, what would
the effect be on Mexican trucks getting insurance. Mr. Ortiz explained that according to
Federal Motor Carrier Safety Regulations ( FMSCR), all local and state laws must be
complied with which includes insurance. Mr. Ortiz again suggested the adoption of
Section 387.7 of the FMSCR which would require only administrative changes rather than
legislation.
Captain Gary Hughes, Department of Public Safety ( DPS), explained that the rules
MEETING OF THE JOINT INTERIM COMMITTEE TO STUDY September 28, 1995
COMPLIANCE BY FOREIGN MOTOR CARRIERS ENTERING Page 5
ARIZONA UNDER THE NAFTA TREATY
could be adopted by July 1996 and that other states policies are currently being
researched regarding out- of- country insurance. Representative Overton asked about
safety violations on trucks in Arizona. Captain Hughes explained that the same rules for
taking an unsafe truck out of service in Arizona would also apply to Mexican trucks.
Representative Overton suggested requiring Commercial Vehicle Safety Alliance ( CVSA)
inspection stickers on all trucks which could relieve some DPS duties. Captain Hughes
estimated the time necessary to do a CVSA inspection was about 45 minutes per vehicle.
Terry Smalley, Arizona Motor Transport Association, explained that the main problems
envisioned as a result of additional trucks coming in from Mexico are the loophole in the
permit process and the increase in volume. Mr. Smalley reported Texas is putting on an
additional 107 patrolmen as a result of the increase. Mr. Smalley explained there are two
different types of stickers used to designate trucks that have been inspected. The CVSA
sticker is put on a vehicle quarterly after it has passed a 14- point inspection.
Representative Overton suggested Mexican trucks be subject to some sort of safety
inspection at the border or in Mexico and a CVSA sticker or some other type of sticker
issued that signifies compliance. Representative Mortensen said he believed the CVSA
sticker was through a voluntary program.
Representative Overton asked Mr. Smalley if he would object to making periodic safety
checks of commercial trucks mandatory. Mr. Smalley said he would not. Mr. Smalley also
expressed concerns regarding Mexican commercial carriers adhere to Arizona
requirements.
Mr. Ortiz returned to discuss alcohol and drug testing which applies to all foreign drivers
and spoke in favor of the safety inspections done by DPS. Representative Overton asked
Mr. Ortiz if he had any problem with possible Arizona law that would require a safety sticker
on commercial vehicles. Mr. Ortiz said he would prefer CVSA rule which would apply to
all four of the border states affected by the increase in Mexican commercial vehicles.
Representative Overton asked Captain Hughes if additional manpower would be needed
for DPS. Captain Hughes said a recommendation to have an additional 22 full time
employees ( FTEs) at a cost of $ 2.048 million had been offered and that those FTEs would
conduct safety inspections at the ports of entry. Captain Hughes suggested that those
FTEs be fully licensed officers and referred to problems experienced in California when
fully licensed officers were not used, so double staffing occurred. Illegal situations in which
a licensed officer is necessary is one of the main reasons why fully licensed officers are
suggested.
Representative Mortensen recommended the Committee meet again to discuss the import
of drugs from Mexico to Arizona and the possibility of DPS doing random drug testing of
MEETING OF THE JOINT INTERIM COMMITTEE TO STUDY September 28, 1995
COMPLIANCE BY FOREIGN MOTOR CARRIERS ENTERING Page 6
ARIZONA UNDER THE NAFTA TREATY
interstate carriers. Representative Overton agreed another meeting was necessary in
order to take some sort of action prior to December 17, 1995. Representative Mortensen
suggested a Special Session was needed in order to avoid leaving Arizona citizens in a
potentially hazardous situation.
Senator Bee suggested the Committee meet after DPS, MVD and DO1 have met and hear
their proposals and added he was not sure a Special Session would be forthcoming on this
issue.
Representative Overton said he had been in contact with the Congressional delegation and
that he was encouraged by the possibility of additional dollars for enforcement at the
borders. Representative Overton added he was trying to arrange a meeting with Texas,
California and New Mexico in order to come up with options to deal with the increased
volume of trucks expected from Mexico. Representative Overton stressed his concern with
the instigation of another unfunded mandate by the Federal Government as a result of
NAFTA.
Without objection, the meeting was adjourned at 12: 25 p. m.
Respectfully submitted,
( Tapes on file in the Office of the Secretary of the Senate)
ARIZONA STATE LEGISLATURE
JOINT INTERIM COMMITTEE TO STUDY COMPLIANCE BY
FOREIGN MOTOR CARRIERS ENTERING ARIZONA
UNDER THE NAFTA TREATY
Minutes of the Meeting
Monday, October 23, 1995
2: 00 p. m., Senate Hearing Room 2
MEMBERS PRESENT
Representative Overton, Co- chairman
Senator Soltero
Representative Lopez
Representative Mortensen
MEMBERS EXCUSED
Senator Bee, Co- chairman
Senator Wettaw
STAFF
John Carlson, Senate Analyst
Brau Lundahl, House Analyst
Co- chairman Overton called the meeting to order at 2: 05 p. m. and the attendance was
noted. ( See attached sheet for other attendees.)
Representative Overton related Senator Bee's intent to introduce a Joint Concurrent
Resolution during regular session asking for additional funding for the U. S. Customs Office
to more adequately supply enforcement of federal motor carrier regulations along U. S.
borders. Representative Overton indicated the purpose of today's meeting is to review
proposed draft legislation dated October 2- 3, 1995 at 11: 54 a. m. ( filed with original
minutes), which was developed jointly by the Governor's Office, the Department of
Insurance, the Department of Transportation ( ADOT) and the Department of Public Safety
( DPS). Staff also distributed a handout highlighting the issues relating to requirements for
Mexican motor carriers ( filed with original minutes).
Representative Lopez asked if language on page 1 of the draft legislation, requiring motor
carrier drivers to show a commercial driver's license upon entering Arizona from Mexico,
is in conformance with federal mandates.
Representative Overton indicated the discussion regarding commercial driver's licenses
arose out of Representative Mortensen's concern regarding drug and alcohol screening.
He indicated the federal motor carrier regulations on commercial driver's licenses contains
a section requiring employers to screen for drugs and alcohol, and this is the law in both
the U. S. and Mexico. However, Representative Overton indicated, driver's licenses are
not currently being checked at the border, and to do so would insure drivers had been
screened for drugs and alcohol, have clean driving records and have passed a medical
exam.
APPENDIX # 2
COMPLIANCE BY FOREIGN MOTOR CARRIERS
ENTERING ARIZONA UNDER THE NAFTA TREATY
October 23,1995
Page 2
Jim Douglas, Administrator of Commercial Licensing, Motor Vehicle Division ( MVD),
explained the changes made in the most recent draft legislation are primarily for
clarification. Mr. Douglas emphasized the proposed legislation makes no increased or
greater demands on motor carriers in general, or Mexican motor carriers specifically, than
current laws. He indicated the provisions require motor carriers entering Arizona from any
other jurisdiction, who are applying for registration under a single- trip permit, to show
evidence of compliance with current Arizona and federal law. He noted this closes a
preexisting loophole which allowed motor carrier drivers to enter Arizona through the
application for a single- trip permit without showing evidence of compliance with financial
responsibility, driver's license and safe- vehicle requirements.
Mr. Douglas indicated it has been testified to that DPS stops and enforces the current
regulations on only 1 percent of motor carriers crossing the border, while MVD port officials
have a far greater check rate. The provisions being added allow more checks so port
officials can reduce problems arising from foreign motor carriers traveling in Arizona
without being in compliance with current laws.
Tony Ortiz, State Director for the Office of Motor Carriers, Federal Highway
Administration, expressed support for the proposed legislation which he indicated was
reviewed by legal counsel in Washington, D. C., acknowledging it does not add
requirements, only asks motor carriers to show proof of compliance with existing rules and
regulations they are already subject to.
Representative Mortensen asked Mr. Ortiz if he feels the proposed legislation meets the
needs for December 17, 1995 when NAFTA tiaffic begins, and he responded affirmatively.
Representative Mortensen expressed concern manpower will not be available to perform
the types of inspections specified if the majority of trucks are going to be inspected.
Mr. Ortiz explained three types of inspections are currently required under federal
regulations: maintenance inspection of the vehicle by the motor carriers; annual inspection
of all vehicles by motor carriers according to a specific list and three levels of inspections
performed by enforcement officers on the side of the highway.
Representative Mortensen asked if more than one agency of enforcement officers can be
involved in the inspection of a vehicle. Mr. Ortiz responded federal funding is supplied to
DPS to provide training at the local level to officers who conduct those inspections. He
explained Tucson and Phoenix Police Departments conduct some as well as other local
police agencies statewide.
October 23,1995 COMPLIANCE OF FOREIGN MOTOR CARRIERS
Page 3 ENTERING ARIZONA UNDER THE NAFTA TREATY
Representative Mortensen asked who represents the U. S. in the inspection of vehicles at
the border itself. Mr. Ortiz explained the Level 1 inspection at the border is conducted by
DPS, representing 1 percent of total vehicles being inspected.
Representative Mortensen asked how U. S. Customs enters into the picture. Mr. Ortiz
explained U. S. Customs has primary jurisdiction to enforce not only federal highway
regulations, but every agency's regulations because they are the " first point of defense."
He noted they do not perform truck inspections or provide many resources for enforcement
of federal motor carrier safety regulations.
Representative Mortensen asked what U. S. Customs actually does when a vehicle crosses
the border. Mr. Ortiz explained it looks at entry documents, looks for contraband and
collects any taxes which may be due. In response to Representative Mortensen's question
as to how U. S. Customs checks for contraband, Mr. Ortiz explained that is a U. S. Customs
procedure to which he is not privy.
In response to Representative Mortensen's inquiry as to what percentage of trucks are
inspected by U. S. Customs for safety standards, Mr. Ortiz responded it would be zero
percent. Mr. Ortiz confirmed Representative Mortensen's understanding that DPS is the
" second line of defense" at the border and asked how many trucks it inspects. Mr. Ortiz
indicated that depending upon resources, DPS will inspect one truck after another.
Representative Overton suggested MVD will be the " second line of defense" upon passage
of the proposed legislation and Mr. Ortiz agreed. Representative Overton explained the
current proposed legislation addresses issues for a projected special session in orca to
mandate demonstration of compliance with regulations before December 17, 1995. He
noted additional issues such as enforcement, coverage of border spots, weight
assessment etc., can be addressed later in regular session.
Representative Overton emphasized the Mexican government is asking the U. S. to spell
out its requirements, and that the Mexican government is in agreement with requiring
demonstration of compliance with regulations.
In response to Senator Soltero's question about consensus on the current draft of the
proposed legislation, Representative Overton acknowledged the current draft, which was
printed at noon today, has probably not been widely seen, but emphasized not much had
changed since the previous draft. He explained that in a session with the Arizona Sonora
Interchange Commission, it was related that the Mexican government had agreed to adopt
the same proposals into its federal laws.
Mr. Douglas agreed with Representative Overton's remarks and added there are three
ongoing interfaces: 1) AZ Department of Transportation liaison, Manny Cuan, has related
COMPLIANCE BY FOREIGN MOTOR CARRIERS October 23,1995
ENTERING ARIZONA UNDER THE NAFTA TREATY Page 4
the proposed concepts to his Mexican counterparts; 2) the AZ Sonora Interchange
Commission has related proposals to its counterparts and 3) MVD met with the U. S.
Department of Transportation representatives responsible for the implementation of
NAFTA and they related draft legislation proposals to their counterparts. He reemphasized
that no new laws are being proposed; that the proposed legislation only asks for
demonstration of compliance with current laws.
Mr. Douglas confirmed Senator Soltero's understanding that a law exists which requires
motor carriers to have driver's licenses, but none exists that requires showing one to cross
the border. He further confirmed Senator Soltero's understanding this would not routinely
be required of passenger car drivers.
Representative Overton asked if once NAFTA gets going, drivers can obtain reciprocal
drivers' licenses and Mr. Douglas confirmed there are other alternatives for legal travel in
Arizona. He explained these alternatives already require that one must show evidence of
financial responsibility under Arizona law prior to being licensed under them.
Representative Overton commented that after NAFTA gets going, there are certain
vehicles that will not be required to stop for a trip permit, and a mechanism to insure they
are in compliance with financial responsibility, safety regulations and driver's license
requirements will need to be developed.
Mr. Douglas commented that under Arizona law every vehicle must stop at the border, but
due to the volume and safety problems associated with backing- up traffic there, a certain
percentage of " bypass" is allowed. He noted that currently the percentage of bypass at the
Nogales port is zero and is 18 percent overall at 17 statewide ports.
In response to Representative Mortensen's question regarding screening for drugs or
alcohol before crossing the border, Mr. Douglas indicated the proposed legislation does
not provide for screening drivers at any Arizona port for anything other than a commercial
driver's license, unless impairment is apparent, or the vehicle for anything other than the
safety sticker. Representative Mortensen expressed his discomfort with this and inquired
about the feasibility of postponing NAFTA crossings from Mexico for months or longer until
a screening system can be implemented. He suggested the financial responsibility
requirement does not deter the potential disasters that can take place involving commercial
motor carriers whose drivers are impaired.
Mr. Ortiz explained a federal rule has been developed requiring foreign- based motor
carriers to screen their drivers for drugs and alcohol; effective July 1, 1996 for those having
50 or more drivers and July I, 1997 for those having 50 drivers or less. He explained the
Canadians had a constitutional problem that would not allow them to enter into this
agreement earlier, hence the 1996 date. Mr. Ortiz explained that if Mexican motor carriers
October 23,1995 COMPLIANCE OF FOREIGN MOTOR CARRIERS
Page 5 ENTERING ARIZONA UNDER THE NAFTA TREATY
do not develop a system for drug and alcohol screening by July 1, 1996, they can be
barred from entering the U. S.
Additionally, Mr. Ortiz confirmed Representative Overton's assumption that if a driver has
no driver's license, it has been removed from his possession for a violation, as the Mexican
government physically takes away the license until a punitive is paid. Conversely, if the
driver is in possession of a license, it can be assumed he is in compliance with regulations.
He indicated the U. S. and Mexico have recognized driver's license reciprocity since 1990.
Terry Smalley, representing Arizona Motor Transport Association, indicated American
motor carriers implement pre- employment drug testing and periodic random testing. He
expressed concern regarding what type of treatment to expect from the Mexican
government in regard to this issue, suggesting at first there will be confusion on both sides.
Mr. Smalley explained those American drivers who have had licenses suspended or
revoked for drug or alcohol violations are documented in local and national networks.
Representative Overton commented that even though the U. S. implements drug and
alcohol screening, a few accidents continue to be caused by such impairment,
acknowledging this may be the case even when the best possible screening efforts are
made.
Mr. Smalley agreed, noting that laws are passed to give enforcement the ability to stop an
impaired driver and put him out of service, emphasizing the goal is to retain only
profess~ onadl rivers. He recommended that the Legislature and other state agencies view
a slide presentation 3y Capt. Hughes of- DPS that goes through the related law
chronologically, show~ ngw hat has happened and what will happen.
George Bays, Administrator, Enforcement Branch, MVD, followed- up on pertinent
questions raised by Representative Mortensen. He indicated the proposed legislation is
one part of a three- part equation, the other two parts being staffing and facilities. Mr. Bays
explained that MVD has been granted approval by the U. S. Customs District Director to
staff the U. S Customs ports- of- entry all along the Mexican- Arizona border, including the
four at wh~ ch MVD formerly had no presence. He further explained a plan has been
subm~ ttedo n how staffing would be implemented in conjunction with DPS to carry out the
mandates included in the proposed legislation.
Mr. Bays related that surveys have been initiated, beginning at Douglas, now surpassing
San Luis in volume of Mexican commercial vehicles with 36,000 in 1994. He indicated that
the two- week survey revealed numerous infractions and violations there and emphasized
this port will be prioritized. In addition, Mr. Bays indicated Naco, Soseby and Lukeville will
be staffed as well as possible. Regarding drug and alcohol screening, Mr. Bays reported
that under recent informal opinions from the Attorney General's Office, members of MVD
COMPLIANCE BY FOREIGN MOTOR CARRIERS
ENTERING ARIZONA UNDER THE NAFTA TREATY
October 23,1995
Page 6
who have limited certification as specialty peace officers, do not have the authority to act
as traffic policemen and make an arrest for driving while intoxicated. He suggested this
may need to be addressed in the future.
Representative Overton suggested that if a driver is apparently impaired, MVD personnel
can immediately notify a DPS officer who can make an arrest. He also suggested that the
sheriff or police officers from the local jurisdiction can be called.
Mr. Bays agreed, but commented that in areas outside the metro area, such as Lukeville,
Soseby and Naco, this would be more difficult to accomplish, though every attempt would
be made to do so.
Representative Lopez recalled Mr. Bay's testimony from a previous meeting that two
additional Full Time Equivalent ( FTEs) positions were assured and questioned whether the
acknowledgment of considerably more activity than anticipated would require more staff.
Mr. Bays acknowledged that earlier testimony was conservative because MVD was in a
" no- growth" mode, recalling that Nogales was to be prioritized and that the other four
border ports would be handled on a limited basis using mobile crews. He indicated a test
plan has been submitted utilizing potent12lly seasonal employees, not necessarily FTEs,
to bolster staff at the four other ports with a mobile enforcement squad, consisting of two
people in a power unit equipped with mobile scales.
Representative Overton stated that a final draft of the proposed legislation will be
developed for a special session projected for lo be held before Thanksgiving. He assured
members of the Committee he would continue to consult with them on any new language
for the final proposed legislation.
Wlthout objection, the meeting was adjourned at 3: 00 p. m
Respectfully submitted,
Alice Kloppel,
Committee Secretary
( Tape on file in the Ofice of the Senate Secretary)
House Engrossed
State o f Arizona
House o f Representatives
Forty- second L e g i s l a t u r e
Fourth Special Session
1995
FILED
Jane Dee Hull
Secretary of State
HOUSE BILL 2003
CHAPTER 3
AN ACT
AMENDING SECTIONS 28- 501.01. 28- 1234 AND 28- 1238. ARIZONA REVISED STATUTES;
RELATING TO NONRESIDENT RESPONSIBILITY.
Be it enacted by t h e L e g i s l a t u r e of the State o f Arizona:
Section 1. Section 28- 501.01. Arizona Revised Statutes. i s amended t o
read:
28- 501.01. S i n q l e - t r i o ~ e r m i t : fees
A. I f it i s desired t o operate any commercial v e h i c l e r e f e r r e d t o i n
section 28- 501, subsection A f o r a s i n g l e t r i p whether laden or unladen, the
owner OR OPERATOR may make a p p l i c a t i o n t o the motor v e h i c l e d i v i s i o n f o r a
s i n g l e - t r i p permi t a u t h o r i z i n g t h e i n t e r s t a t e operation o f such v e h i c l e :
1. For a s i n g l e t r i p through t h i s s t a t e .
2. From any p o i n t on the Arizona border t o a p o i n t w i t h i n t h i s s t a t e
and r e t u r n t o the border.
3. From a r a i l h e a d w i t h i n t h i s s t a t e and r e t u r n t o a r a i l h e a d .
4. From a p o i n t w i t h i n t h i s s t a t e t o the border o f t h i s s t a t e .
B. FROM AND AFTER DECEMBER 17. 1995. I N ORDER TO OBTAIN A SINGLE- TRIP
PERMIT PURSUANT TO THIS SECTION, THE OWNER OR OPERATOR SHALL PROVIDE EVIDENCE
OF EACH OF THE FOLLOWING TO THE MOTOR VEHICLE D I V I S I O N :
1. AN INSURANCE POLICY THAT SATISFIES ALL OF THE FOLLOWING:
( a) MEETS THE FINANCIAL RESPONSIBILITY REQUIREMENTS PRESCRIBED I N
CHAPTER 7 OF THIS TITLE.
( b) IS ISSUED BY AN INSURER THAT HAS BEEN ISSUED A CERTIFICATE OF
AUTHORITY OR THAT HAS BEEN PERMITTED TO TRANSACT SURPLUS LINES INSURANCE BY
APPENDIX # 3
H. B. 2 0 0 3
THE PUBLIC O F F I C I A L THAT SUPERVISES INSURANCE I N A STATE OF THE UNITED STATES
OR THE D I S T R I C T OF COLUMBIA.
( c) PROVIDES V A L I D INSURANCE COVERAGE I N T H I S STATE.
2 . A CURRENT DRIVER LICENSE OF A CLASS AND TYPE RECOGNIZED BY THE
MOTOR VEHICLE D I V I S I O N AS V A L I D I N THE UNITED STATES.
3. CURRENT COMPLIANCE WITH VEHICLE SAFETY INSPECTION REQUIREMENTS
PRESCRIBED I N 4 9 CODE OF FEDERAL REGULATIONS SECTIONS 3 9 6 . 1 7 THROUGH 3 9 6 . 2 3 .
8: C. The vehicle division, i f satisfied as to the facts stated in
the application AND THE EVIDENCE PROVIDED PURSUANT TO SUBSECTION B OF T H I S
SECTION, shall register and license the vehicle by issuance of an appropriate
permit upon payment by the owner OR OPERATOR of the proper fees as set forth
i n the following schedule of fees:
1. One or two- axle vehicles, laden or unladen, one dollar f i f t y cents
for each f i f t y miles or fraction thereof t o be traveled on the highways of
this s t a t e in any one t r i p .
2. For three- axle vehicles or combinations of vehicles n o t having more
than three axles, laden or unladen, two dollars twenty- five cents for each
f i f t y miles or fraction thereof t o be traveled on the highways of t h i s s t a t e
in any one t r i p .
3. For any vehicle or combination of vehicles having four axles, laden
or unladen, three dollars for each f i f t y miles or fraction thereof t o be
traveled on the highways of this s t a t e in any one t r i p .
4. For any vehicle or combination of vehicles having five axles, 1 aden
or unladen, three dollars seventy- five cents for each f i f t y miles or fraction
thereof to be traveled on the highways of this s t a t e in any one t r i p .
5. For any vehicle or combination of vehicles having six axles, laden
or unladen, four dollars f i f t y cents for each f i f t y miles or fraction thereof
t o be traveled on the highways of this state in any one t r i p .
6. For any vehicle or combination of vehicles having more t h a n six
axles. laden or unladen. five dollars twenty- five cents for each f i f t y miles
or fraction thereof t o be traveled on the highways of this state i n any one
t r i p .
0. THE APPLICATION FOR A S I N G L E - T R I P PERMIT TO THE MOTOR VEHICLE
D I V I S I O N DOES NOT QUALIFY THE APPLICANT FOR E L I G I B I L I T Y I N AN ASSIGNED RISK
PLAN APPROVED PURSUANT TO SECTION 2 8 - 1 2 2 3 .
& E. The single- trip permit shall contain such information, shall
be in such form and shall be issued and displayed in or on the vehicle, under
such rules as may be prescribed by the assistant director for the motor
vehicle division. The permi ts expi re upon completion of the specific t r i p
for which issued and shall not exceed a period of ninety- six hours from time
of issuance unless an extension of time i s authorized in writing by the
assistant director.
Br F. I f a vehicle for which a single- trip permit has been issued i s
operated otherwise than authorized in the permit, the owner OR OPERATOR shall
H. B. 2003
apply f o r and obtain annual r e g i s t r a t i o n o f the v e h i c l e and pay the fees
a p p l i c a b l e a t the time the terms o f the p e r m i t a r e v i o l a t e d .
Sec. 2. Section 28- 1234. Arizona Revised Statutes, i s amended t o read:
28- 1234. Maintenance and c e r t i f i c a t i o n o f f i n a n c i a l
reaui rements : v e r i f i c a t i o n
A. - 1; 1, A person who operates motor vehicles i n
t h i s s t a t e and i s subject t o the f i n a n c i a l r e s p o n s i b i l i t y requirements o f
t h i s a r t i c l e s h a l l maintain a t a l l times the amounts prescribed i n section
28- 1233 which o b l i g a t e s t h e person t o pay compensation f o r i n j u r i e s t o
persons and f o r l o s s or damage t o property by reason o f the ownership.
maintenance or use o f any motor v e h i c l e or v e h i c l e combination owned or
operated by the person.
B. G~ 1- ad- 1; 1, 194%% The motor v e h i c l e d i v i s i o n may r e q u i r e
every person who i s subject t o the f i n a n c i a l r e s p o n s i b i l i t y requirements o f
t h i s a r t i c l e t o c e r t i f y the existence of f i n a n c i a l r e s p o n s i b i l i t y i n the form
and a t the times as the motor v e h i c l e d i v i s i o n deems necessary. The motor
v e h i c l e d i v i s i o n may forward the c e r t i f i c a t i o n t o the named i n s u r e r t o
determine i f the c e r t i f i c a t i o n i s c o r r e c t . No c i v i l l i a b i l i t y may accrue t o
the i n s u r e r or any o f i t s employees f o r r e p o r t s made t o the motor v e h i c l e
d i v i s i o n i f the r e p o r t s are made i n good f a i t h based on the most recent
i n f o r m a t i o n a v a i l able t o t h e i n s u r e r .
Sec. 3. Section 28- 1238. Arizona Revised Statutes. i s amended t o read:
28- 1238. Insurance reauirement f o r f o r e i s n vehicles: e x c e ~ t i o n s
A. 0Befo re operating i n t h i s s t a t e an
owner or lessor o f a v e h i c l e which i s subject t o section 28- 501 and which has
primary r e g i s t r a t i o n and number p l a t e s issued by a f o r e i g n country or
j u r i s d i c t i o n of a f o r e i g n country w i t h which t h i s s t a t e does not have motor
vehicle r e g i s t r a t i o n r e c i p r o c i t y or an agreement f o r p r o p o r t i o n a l
r e g i s t r a t i o n s h a l l submit t o the department proof o f f i n a n c i a l r e s p o n s i b i l i t y
for the future pursuant t o 1231, r.. C.--- C;-" THIS ARTICLE
THAT PROVIDES VALID INSURANCE COVERAGE I N THIS STATE AND THAT i s issued by
an i n s u r e r w# tw= kd tc ti,:; ztz* THAT HAS BEEN ISSUED A
CERTIFICATE OF AUTHORITY OR THAT HAS BEEN PERMITTED TO TRANSACT SURPLUS LINES
INSURANCE BY THE PUBLIC OFFICIAL THAT SUPERVISES INSURANCE I N A STATE OF THE
UNITED STATES OR THE DISTRICT OF COLUMBIA.
H. B. 2003
B. UNTIL DECEMBER 18, 1995, t h i s s e c t i o n does not apply t o a v e h i c l e
c a r r y i n g a g r i c u l t u r a l products w i t h i n t w e n t y - f i v e miles o f the border o f t h i s
s t a t e and a f o r e i g n country. FROM AND AFTER DECEMBER 17, 1995, THIS SECTION
DOES NOT APPLY TO A VEHICLE REGISTERED PURSUANT TO SECTION 28- 501.01.
C. The motor v e h i c l e d i v i s i o n may refuse t o issue the r e g i s t r a t i o n f o r
a v e h i c l e o r may cancel the r e g i s t r a t i o n o f a v e h i c l e owned o r operated by
a person who does not comply w i t h the requirements o f t h i s s e c t i o n .
Sec. 4. Emergency
This a c t i s an emergency measure t h a t i s necessary t o preserve the
p u b l i c peace, h e a l t h o r s a f e t y and i s operative immediately as provided by
1 aw.
X For Committee on For Caucus & COW
- For Committee on Rankhg h Insurance As Passed by the
House
A R I Z O N A H O U S E O F R E P R E S E N T A T I V E - - 8
4
FOURTH SPECIAL SESSION
BILL SUMMARY FOR HB 2003
( single- trip permits; financial responsibility)
HB 2003 requires nonresident commercial carriers to provide
evidence of each of the following to the Arizona Motor Vehicle
Divisions ( MVD) when applying for a single- trip permit:
b compliance with Arizona's motor carrier financial
responsibility requirements;
a commercial driver's license of a class and type that is
recognized by the MVD as valid in the United States;
compliance with federal motor carrier safety inspection
requirements.
A single- trip permit application will be denied for failure to
present evidence of any of the above provisions.
Compliance with financial responsibility requirements is satisfied
by an insurance policy that provides valid coverage, in required
amounts, in Arizona, offered by an insurer authorized to transact
insurance in a state of the United States or the District of
Columbia.
The bill eliminates the ability of nonresident commercial carriers
to self- certify their compliance with Arizona's financial
responsibility laws.
Additionally, the bill requires that the issuance of a single- trip
permit does not qualify the permit holder to be eligible to the
state's assigned risk plan.
HB 2003 contains a delayed enactment date of December 17, 1995.
The bill contains an emergency clause.
Prepared by: Brad Lundahl
APPENDIX # 4
For Caucus and kloor Action L
As Passed by the Senate C
AlUZONA STATE SENATE
Phoeniu, Arizona
FOURTH SPECIAL SESSION
FACT SHEET FOR S. B. 1003
nonresident responsibilitv: sinyle trip permits
* Purpose:
Establishes evidence of compliance with state and federal motor carrier safety, insurance and
driver license requirements for nonresident, commercial motor carriers entering Arizona.
Background;
As of December 17, 1995, provisions of the North American Free Trade Agreement
( NAFTA) will remove current border zone restrictions to enable Mexican motor carriers to travel
throughout the four border states of Arizona, California, New Mexico and Texas. Similarly, U. S.
motor carriers will be able to travel throughout the six border states of Mexico ( Baja, Norte Sonora,
Chihuahua, Coahuila, Nuevo Leon and Tamaulipas). Under the provisions of NAFTA, all foreign
or domestic motor carriers must comply with the Federal Motor Carrier Safety Regulations as well
as the motor carrier laws of the individual states.
Currently, out- of- state motor carrier owners or operators can register their vehicles by: a)
- using Arizona as a base state jurisdiction for purposes of the International Registration Plan ( IRP)
and the International Fuel Tax Agreement ( ETA); b) obtaining an interstate plate; or c) obtaining
a single- trip permit ( valid for 96 or fewer hours). Under the first two methods of registration,
applicants are required to provide proof of compliance with state financial responsibility ( insurance)
laws. However, under the single- trip permit option, applicants are only required to report their
compliance with these state laws. In calendar year 1994, the MVD issued approximately 237,500
single- trip permits to nonresident, commercial motor carriers. Approximately 86,500 of these permits
were issued to Mexican motor carriers.
While out- of- state motor carriers must comply with Arizona's laws regarding financial
responsibility, driver license and safety regulations, enforcement of these statutes is borne by law
enforcement officers after these vehicles have crossed the border into Arizona. Under the proposed
b i enforcement of these requirements would also take place when a motor camer owner or operator
applies for a single- trip permit at an MVD port- of- entry station. Under the proposed legislation an
h applicant for a single- trip permit would be required to to provide evidence of financial responsibility,
a valid driver license and current compliance with federal vehicle safety inspection requirements
( annual safety sticker). A nonresident, commercial motor carrier not complying with any of these
requirements would be denied access to Arizona's roadways.
APPENDIX # 5
FACT SHEET
S. B. 1003 - Fourth Special Session
Page 2
Provisions
1. Requires nonresident, commercial caniers t'o provide evidence of the followi? g when applying
for a single- trip registration permit:
a) An insurance policy that: meets the state's motor carrier financial responsibility
requirements; provides valid coverage in this state; and is issued by a state- certified
insurer or an insurer that is legally permitted by another state or the District of
Columbia to transact surplus lines insurance.
b) A driver license that is recognized by the MVD as a valid license in the United States.
c) A safety sticker or other document indicating compliance with federal motor
carrier safety inspection requirements.
2. Specifies that the issuance of a single- trip permit by ADOT does not qualifj the permittee for
eligibility in the " assigned risk plan" provided for by section 28- 1223.
3. Eliminates the requirement for nonresident, commercial carriers to self- certifj their
compliance with this state's financial responsibility laws.
4. Makes technical and conforming changes.
5. Contains an emergency clause.
Prepared by Senate Staff
December 7, 1995