Citation Audits – Nevada’s Answer to Non-compliant Carriers

Citation Audits – Nevada’s Answer to Non-compliant Carriers

Nevada Department of Motor Vehicles

Dawn Lietz

Supervising Auditor II

Breakout Teaser

Does your jurisdiction cite carriers for violations of IRP/IFTA, Dyed Fuel, or Overweight combinations?

Do you know what your jurisdiction does with the information?

Is your jurisdiction doing everything it can to create an atmosphere of compliance for its carriers?

Breakout Teaser

See how Nevada is earning an average rate of return equal to $492.00 per hour without creating an additional burden on staff or law enforcement personnel.

Hear the lessons learned to avoid some of the pitfalls we faced during early implementation.

Citation Audits – Nevada’s Answer to Non-compliant Carriers

Nevada Department of Motor Vehicles

Dawn Lietz

Supervising Auditor II

Goals

Share how Nevada has increased revenue through administrative fine procedures.

Share statistical information Define who, what, when, & why an audit is

conducted. Lessons learned.

How Nevada has Increased Revenue thru Enforcement

Since FY 04 (July 2003 – June 2007) Nevada has collected an additional $298,026 for the Highway Fund. Dyed Fuel = $103,753 IFTA = $77,379 IRP = $76,251 Overweight = $40,643

Statistics – Assessments

Citation Assessments

Type of Citation FY04 FY05 FY06 FY07 Total by Type

Dyed Fuel $34,555 $21,739 $63,109 $42,713 $162,116

IFTA Citations $2,843 $4,810 $42,628 $94,893 $145,174

IRP Citations $4,385 $6,629 $48,238 $81,369 $140,620

OW Citations $6,060 $3,182 $35,230 $29,630 $74,102

Total by FY $47,843 $36,359 $189,204 $248,605 $522,012

Statistics - Collections

Citations Paid


Dyed Fuel $23,216 $12,262 $40,643 $27,631 $103,752

IFTA Citations $1,719 $3,202 $25,195 $47,263 $77,379

IRP Citations $2,767 $4,564 $30,035 $38,885 $76,251

OW Citations $4,581 $2,568 $15,308 $18,187 $40,643

Total by FY $32,283 $22,596 $111,181 $131,966 $298,026

Statistics - % Assessed versus Collected

% of Citations Assessed and Collected


Dyed Fuel 67.2% 56.4% 64.4% 64.7% 63.2%

IFTA Citations 60.5% 66.6% 59.1% 49.8% 59.0%

IRP Citations 63.1% 68.9% 62.3% 47.8% 60.5%

OW Citations 75.6% 80.7% 43.5% 61.4% 65.3%

Average by FY 66.6% 68.1% 57.3% 55.9% 62.0%

Statistics – Staff Time

Staff Time


Dyed Fuel 113 45 71 17 246

IFTA Citations 144 77 153 136 511

IRP Citations 116 12 150 167 445

OW Citations 49 6 26 78 159

Total Hours 422 140 400 399 1,360

Statistics – Return per Hour

Staff Time vs. Amount Collected = Return per hour

Type of Citation FY04 FY05 FY06 FY07 Average by Type

Dyed Fuel $206 $275 $570 $1,602 $663

IFTA Citations $12 $41 $164 $347 $141

IRP Citations $24 $367 $201 $233 $206

OW Citations $93 $467 $589 $232 $345

Average per hour $84 $287 $381 $603 $339

Analysis of Program Effectiveness

In the Spring of 2005, an analysis of the citation audits was conducted to evaluate the effectiveness of the program. IRP/IFTA citation audits were costing us money to

process. Staff time to process was too high and not cost beneficial.

Created merge templates to simplify staff time and create consistency in audit format.

Added Administrative Fines to IRP and IFTA citations, in addition to any other permit fees due.

Administrative Changes

Nevada Revised Statutes (NRS) provide authority to assess an Administrative Fine for any violation of the chapter(s). Therefore, the decision was made to assess a progressive administrative fine for non-compliance in addition to the permit fees and fuel taxes due.

Changes made to Citation Audit Program in July 2005

A law change (AB255) effective July 1, 2005 increased the total dyed fuel violation from $10 per gallon or $1,000 whichever was greater to: $2,500 for a first offense $5,000 for a second offense $10,000 for a third or subsequent offense

Law Change - Continued

Additionally, AB255 provided for a $10,000 fine for anyone guilty of failing to control access to dyed fuel. Statement of Acknowledgment and Intended

Use.SuppliersCardlocksBulk Tank Operators

Program Effectiveness

In the Spring of 2007, another analysis was conducted. This analysis revealed that the cost benefit has greatly increased over the benefit two years ago. Weaknesses were still identified in the amount

collected and new procedures have been established to strengthen this process.

New Processes

The audit report has been modified to include a notification that the Department intends to file a lien against any real and/or personal property if payment is not received within 30 days.

An auditor has been assigned the responsibility of forwarding the information to the base state of the violators. So far, base jurisdictions that have been contacted have

agreed to put holds on the violators accounts until fees have been paid.

Assessed Comparison

Assessed FY04 - 05 vs FY06 - 07

Type of Citation Total 04 - 05 Total 06 - 07 % Increase

Dyed Fuel $56,294 $105,822 187.98%

IFTA Citations $7,653 $137,521 1796.86%

IRP Citations $11,013 $129,606 1176.80%

OW Citations $9,242 $64,860 701.81%

Total by FY $84,203 $437,809 519.95%

Audits Paid Comparison

Audits Paid FY04 - 05 vs FY06 - 07


Dyed Fuel $35,478 $68,274 192.44%

IFTA Citations $4,921 $72,458 1472.31%

IRP Citations $7,331 $68,921 940.17%

OW Citations $7,149 $33,494 468.53%

Total by FY $54,879 $243,147 443.06%

Assessed vs Paid Comparison

% of Audits Assessed and Collected FY04 - 05 vs FY06 - 07


Dyed Fuel 123.6% 129.1% 104.45%

IFTA Citations 127.0% 108.9% 85.73%

IRP Citations 131.9% 110.1% 83.41%

OW Citations 156.3% 104.8% 67.07%

Total by FY 538.9% 452.9% 84.04%

Staff Time Comparison

Staff Time FY04 - 05 vs FY06 - 07


Dyed Fuel 157 89 56.24%

IFTA Citations 221 289 130.70%

IRP Citations 128 317 247.40%

OW Citations 55 104 191.71%

Total by FY 561 799 142.35%

Return per Hour - Comparison

Return per Hour FY04 - 05 vs FY06 - 07


Dyed Fuel $240 $1,086 451.76%

IFTA Citations $27 $256 958.24%

IRP Citations $195 $217 111.04%

OW Citations $280 $410 146.42%

Total by FY $186 $492 265.16%

Dyed Diesel Citation Audits

What generates a Dyed Diesel audit?Nevada Highway Patrol (NHP)

Commercial/Passenger Vehicle StopsRegular traffic citations

Compliance Enforcement Division (CED)Vehicle Inspections

What is a Dyed Diesel Citation?

This type of citation is generated when a motor carrier is caught operating a vehicle on the public highway with untaxed Dyed Diesel Fuel.

NHP during the traffic stop randomly checks for dyed fuel in the tank of the vehicle.

DMV’s CED during a routine vehicle inspection. If it is determined the fuel in the tank is dyed, a citation is issued.

A positive reading is anything over 1 part per million. (Fuel is dyed at a minimum of 12 parts per million at the terminal.)

The citation or notice is then forwarded to our office where an audit is generated.

Statutory Authority

NRS 366.735 - Misuse or alteration of dyed special fuel: Administrative fine; suspension or revocation of license.

NRS 366.203 - Addition of dye to certain exempt special fuel; operation or maintenance on highway of vehicle containing dyed special fuel.

How is the audit conducted?

Confirm the vehicle’s registered weight. (Under/over 26K lbs.) Review the citation to determine the PPM reading. Confirm whether a prior violation has occurred within 3 years.

NOTE: A field audit may also be conducted, applying fuel tax, penalty and interest on all dyed fuel without substantial documentation proving qualified use of dyed.

Registrant’s base state is advised of the violation. In addition to any fuel tax due, assessments are made as follows:

$2,500 for the first instance. $5,000 for a second instance. $10,000 for a third or subsequent instance.

Applicable Statutes

NRS 366.735 Misuse or alteration of dyed special fuel: Administrative fine; suspension or revocation of license.

1. The Department may take disciplinary action in accordance with subsection 2 against any person who: (a) Sells or stores any dyed special fuel for a use which the person selling or storing such fuel knows, or has reason to know, is a taxable use of the fuel; (b) Willfully alters or attempts to alter the strength of composition of any dye in any special fuel intended to be used for a taxable purpose; or (c) Uses dyed special fuel for a taxable purpose.

2. For any violation described in subsection 1, the Department may: (a) If the violation is a first offense, impose an administrative fine of not more than $2,500 and suspend any license issued to that person pursuant to this chapter for not more than 30 days; (b) If the violation is a second offense within a period of 4 years, impose an administrative fine of not more than $5,000 and suspend any license issued to that person pursuant to this chapter for not more than 60 days; and (c) If the violation is a third or subsequent offense within a period of 4 years, impose an administrative fine of not more than $10,000 and revoke any license issued to that person pursuant to this chapter.

Statement of Acknowledgement and Intended Use

Pursuant to new legislation in 2005, a “Statement of Acknowledgement and Intended Use” is required for all purchasers and distributors of dyed diesel fuel. (Including companies with bulk tanks or cardlocks.)

Purpose: To reduce the amount of untaxed dyed diesel fuel used on the highway in an illegal manner.

Increased Accountability: All distributors are responsible for ensuring anyone with access to dyed diesel fuel are aware of the fines and penalties associated with illegal highway use.

Controlled Access: Distributors are required to control the access to the dyed diesel fuel to only those persons who have signed the statement.

Penalties: Pursuant to NRS 366.733, anyone who fails to control the access to the dyed diesel fuel is subject to a $10,000.00 fine, per occurrence.

IFTA Citation Audits

What generates an IFTA audit?NHP

Commercial Vehicle StopsRegular traffic citations

What is an IFTA Citation?

This type of citation is generated when a commercial motor carrier is caught without a fuel permit or valid IFTA credentials.

NHP during the traffic stop checks for valid IFTA stickers displayed on both sides of the vehicle or a valid fuel permit.

If the Trooper is unable to confirm valid fuel credentials a citation is issued.


Statutory Authority

NRS 366.220 – Mandatory licensing requirements; restriction on authority to sell or distribute dyed special fuel; regulations of Department.

NRS 366.223 - Temporary permit for special fuel; regulations of Department.

NRS 366.720 - Unlawful acts; criminal penalties.


Review the NHP citation to determine the vehicle’s registered owner at the time of the citation.

Check to see if prior offenses have occurred. A vehicle operating without a valid fuel permit or IFTA

credentials is considered unlicensed. Permit fees are $30.00 for 24 hours. (No in-out privileges) Administrative Fine is $500 for the 1st instance.

$1,500 for 2nd instance. $2,000 for 3rd instance $2,500 for 4th and subsequent instances. Registrant’s base state is advised of each offense.

Applicable Statutes

NRS 366.740 Imposition and deposit of administrative fines; opportunity for hearing; injunctions and other remedies.

1. Except as otherwise provided in NRS 366.733 and 366.735, the Department may impose an administrative fine, not to exceed $2,500, for a violation of any provision of this chapter, or any regulation or order adopted or issued pursuant thereto.

2. The Department shall afford to any person fined pursuant to this section or NRS 366.733 or 366.735 an opportunity for a hearing pursuant to the provisions of NRS 233B.121.

3. All administrative fines collected by the Department pursuant to subsection 1 or NRS 366.733 or 366.735 must be deposited with the State Treasurer to the credit of the State Highway Fund.

4. In addition to any other remedy provided by this chapter, the Department may compel compliance with any provision of this chapter and any regulation or order adopted or issued pursuant thereto by injunction or other appropriate remedy. The Department may institute and maintain in the name of the State of Nevada any such enforcement proceedings.

IRP Citation Audits

What generates an IRP audit?NHP

Commercial Vehicle StopsRegular traffic citationsExpired registration tags100% Base state plates (non-apportioned)

What is an IRP Citation?

This type of citation is generated when a commercial motor carrier is caught without a trip permit or IRP cab card with authorized Nevada travel.

NHP during the traffic stop checks for a valid cab card or trip permit.

If the Trooper is unable to confirm valid registration, or the carrier did not purchase enough miles, a citation is issued.


Statutory Authority

NRS 706.491 – Motor Carriers must be licensed.

NRS 706.521 – Temporary Permit for certain motor vehicles; fees.

NRS 706.756 - Unlawful acts; criminal penalties.


Review the NHP citation to determine the vehicle’s registered owner at the time of the citation.

Check to see if prior offenses have occurred. A vehicle operating without a valid permit or cab card

authorizing Nevada travel is considered unregistered. Permit fees are $5.00, plus $0.15 per mile. Administrative Fine is $500 for the 1st instance.

$1,000 for 2nd instance. $1,500 for 3rd instance. $2,500 for 4th and subsequent instances. Registrant’s base state is advised of the offense.

Applicable Statutes

NRS 482.565 Administrative fines for violations other than deceptive trade practices; injunction or other appropriate remedy; enforcement proceedings.

1. Except as otherwise provided in NRS 482.554, the Department may impose an administrative fine, not to exceed $2,500, for a violation of any provision of this chapter, or any rule, regulation or order adopted or issued pursuant thereto. The Department shall afford to any person so fined an opportunity for a hearing pursuant to the provisions of NRS 233B.121.

2. All administrative fines collected by the Department pursuant to subsection 1 must be deposited with the State Treasurer to the credit of the State Highway Fund.

3. In addition to any other remedy provided by this chapter, the Department may compel compliance with any provision of this chapter and any rule, regulation or order adopted or issued pursuant thereto, by injunction or other appropriate remedy and the Department may institute and maintain in the name of the State of Nevada any such enforcement proceedings.

Regulatory Authority

NAC 482.930 Administrative fine: Imposition and payment; failure to pay. (NRS 482.160, 482.565)

1. Except as otherwise provided in subsection 2 and NAC 482.042, if the Department imposes administrative fines pursuant to the provisions of NRS 482.565, it will impose such fines for violations occurring within the 3-year period immediately preceding the most recent offense according to the following schedule:

(a) For a first offense, a fine of not less than $100 nor more than $500. (b) For a second offense, a fine of not less than $500 nor more than $1,000. (c) For a third offense, a fine of not less than $1,000 nor more than $1,500. (d) For a fourth or subsequent offense, a fine of not less than $1,500 nor more

than $2,500. For the purposes of paragraphs (b), (c) and (d) of this subsection, a cease and

desist order issued by the Department shall be deemed to be a first offense.

Overweight Citations

What generates an Overweight audit?NHP

Commercial Vehicle StopsRegular traffic citations

What is an Overweight Citation?

This type of citation is generated when a motor carrier is caught carrying excessive weight on the public highway.

NHP during the traffic stop checks for an overweight permit and what axle combinations are authorized by the permit.

If the Trooper suspects the vehicle is in violation of the permit, the vehicle and associated trailers are weighed. A citation is issued if the suspect vehicle is found to be overweight.

The citation or notice is then forwarded to our office where an audit is generated. (NOTE: Exceeding tandem axle or bridge weight is not covered through DMV audit.)

Statutory Authority

NRS 484.745 Maximum weight on axles.

NRS 706.531 Combinations of vehicles: Special identifying devices; display; transfer; fee; penalties.

NRS 482.482 Additional fees for registration of motor truck, truck-tractor or bus; penalty.


Confirm the vehicle’s registered weight. Review the Overweight Permit to determine the allowable

weight and axle combination. Review the NHP citation to determine the vehicle’s total

weight at the time of the citation. A vehicle operating in excess of the permit, or without a valid

permit in the vehicle, is considered to have no permit at all. (NRS 484.767)

Assessment is $60 per 1,000 lbs. of excess weight. Amount is divided by 12 and multiplied by the number of months

remaining from the date of the citation to December 31st.

Applicable Statutes

NRS 484.769 Penalties for operation of oversized or overweight vehicle without permit or in violation of permit.

1. It is unlawful for any person to operate or move any vehicle or equipment described in NRS 484.739 or 484.759 to 484.7631, inclusive, over any highway without first obtaining a permit, or to violate or evade any of the terms or conditions of the permit when issued. A person violating any of the provisions of NRS 484.759 to 484.767, inclusive, is guilty of a misdemeanor.

2. Any person operating or moving any vehicle or equipment described in NRS 484.739 or 484.759 to 484.7631, inclusive, over any highway under the authorization of a permit for continuous use or multiple trips over a limited time and who violates any weight limitation in excess of the weight authorized by the permit must be punished, upon conviction, as provided in NRS 484.757.

Lessons Learned

Know the laws in your jurisdiction before you set up the audit program.

We had the authority to assess the additional administrative fines, but did not recognize it until two years later.

As long as you have the legal authority to assess fines, it is very easy to set up a progressive sanctioning process through regulations.

Make sure you have the collection process in place to avoid a backlog of uncollected audits.

Work with neighboring jurisdictions to assist you in the collection process. Often times they appreciate the audit leads that result from the citations.

Documents

Citation Audits – Nevada’s Answer to Non-compliant Carriers