Trucking Rules and Regulations with your ICC Authority
The following information will help someone starting a trucking business.
MC Number: Motor Carrier Number, you need this if you want to haul interstate across state lines. It costs $300 if you file it yourself with the Federal Highway Administration (FHWA), previously called Interstate Commerce Commission (ICC).
Contract or Common Authority: If transportation services are provided to general public then you need to file this form. Common carriers no longer have to file tariffs, they must have Cargo insurance on file in addition to Liability insurance. If HAZMAT is hauled then there are different requirements.
Common authority: There is no difference between common or contract carriers. Carriers still must register as either Common or Contract carriers. If you are not sure of which authority to secure then check with potential shippers to see if they have a preference.
Broker authority: Need to file this before you can broker loads to others. You need to have either a $10,000 bond or $10,000 cash in a trust account.
IFTA - International Fuel Tax Agreement: You can get IFTA sticker in your home state, which costs $5 and needs to purchased every year (valid from Jan 1 - Dec 31). File quarterly reports to your home based state and they will pay to other states. All US States are IFTA members.
IRP - International Registration Plan: You can get your base plate in your home state and apportion it to other states. All US states are members, so your base state pays the other states. The percentage of miles driven in other states determines what you pay to apportion. You have to use other states list of estimated miles until you actually drive in those states. There are various renewal periods depending on when you first start your account. You keep the same plate and get a new sticker every year.
SSRS - Single State Registration System (Used to be called bingo stamps): You register with and pay your home state the fee for all the different states you want to register in, and they pay the other states. The fee ranges from $1 to $10 each for different states. You will get a list from your home state that you carry in your cab that shows all the different states you are registered in.
Process Agent: All states requires you to have on file, the name, address and phone number of a process agent. This agent is responsible to serve your papers, if they can't find you. It usually cost about $50 for a list of process agents (all US states).
HVUT - Heavy Vehicle Use TAx: File this using IRS form 2290, valid from August 1, till July 31 every year. It costs $550 for a full year and there are no refunds. You need to show proof of your HVUT being paid before they'll issue your IRP aplication. It is issued by the VIN # on the truck and can't be transfered. If you buy a used (licensed) truck, the HVUT should have been paid. You will need to get a copy of 2290 form stamped paid by the IRS before you can get your IRP license, otherwise you will have to pay the HVUT.
Visit Internal Revenue Service website or call (800) 829-3976 to order form 2290.
Fuel bonds: Some states require you to post a bond. You can buy a bond through an insurance company. It costs about $125 for 3 years.
Random Drug and Alcohol Testing: The easy way is to belong to a consortium locally. Usually they charge $50 per year plus the cost of actual testing. Random testings are done quarterly.
US DOT Annual Vehicle Inspection: You have to get Vehicle inspection for all your equipment once a year and carry the papers with you in the vehicle.
Medical Card: You have to get a DOT medical exam every 2 years and carry the medical card always.
Property Tax: Some states such as Kansas, Arkansas and Kentucky require you to pay property tax on your equipment based on the miles you drive in their state. These states will send you the required forms, if you had registered these states in your single state.
The following insurance is required for Contract authority.
Liability Insurance: A minimum of $750,000 limit is required, but it's a better to purchase $1,000,000. Although it doesn't cost significantly more, but some shippers
and brokers require that you carry it. They consider you to be a better carrier if you have more than the minimum required.
Cargo Insurance: A minimum of $50,000 limit is required for Cargo Insurance, but it's good to have $100,000 for the same reason mentioned above. However, if you haul computer equipment you will need more.
Physical damage Insurance: You will need physical damage insurance for your newer equipment. The most common is $1000 deductible for the tractor, $1000 deductible for trailer, and $1000 deductible for the cargo. You can also choose 300 miles, 500 miles or unlimited radius miles, usually measured from your home (parking).
General Liability Insurance: Covers if something falls off your trailer or a wheel comes off. For $1,000,000 limit cost is about $300 a year. You can also get a Commercial Umbrella Liability policy to cover anything else, which should cost around $800 a year.