2011 annual ifta business meeting virginia beach, virginia

Annual IFTA Business Meeting August 2011 of 11

2011 Annual IFTA Business Meeting

Virginia Beach, Virginia August 16 – 17, 2011

Call to Order Mr. Scott Greenawalt (OK), IFTA, Inc. Board of Trustees (Board) President, called the meeting to order and welcomed everyone to the business meeting. The Virginia Beach Police Department Honor Guard presented the colors of the United States and Canada as well as those of Virginia. Following the singing of the National Anthems by Ms. MaryAnn Rayment (VA), Mr. Greenawalt introduced the Honorable Sean T. Connaughton, Virginia Secretary of Transportation. Welcome The Honorable Sean Connaughton welcomed the delegates of the 18th Annual IFTA Business Meeting on behalf of Virginia Governor Bob McDonnell. As Secretary, Mr. Connaughton oversees seven state agencies with more than 9,700 employees and combined annual budgets of $5 billion. Prior to joining the McDonnell administration, he served as Corporate Vice President, Government Affairs for the American Bureau of Shipping, one of the world's leading ship and marine classification societies. Secretary Connaughton explained the large military and naval presence in the area and reminded everyone of why flags were flying at half-mast. He asked for a moment of silence for those who died in a recent helicopter crash. Many were members of a Navy SEAL team based in the area. Secretary Connaughton thanked the membership for coming to Virginia. Roll Call Mrs. Tammy Trinker (IFTA, Inc.), Events Coordinator, called the roll of the membership. Following the roll call, Mrs. Trinker announced a quorum of the membership was present to conduct the business of the association. Fifty-three (53) jurisdictions were present either in person or by proxy. President’s Report Mr. Greenawalt gave the President’s report. The focus of his report was the importance of jurisdiction participation in the activities of the membership through participation on the Standing and Special Committees. He recognized eight (8) jurisdictions that participate on four (4) or more committees: Indiana, Nevada, Kansas, Kentucky, Missouri, North Carolina, Saskatchewan, and Virginia. He thanked each of these jurisdictions for their commitment to the membership and the association. He stated that sixteen (16) jurisdictions do not participate on any committees or on the Board. He stated that IFTA, Inc. is a living and breathing association and stressed the importance of getting involved to show and share ideas. IFTA, Inc. Strategic Plan Mr. Hester presented an update on the IFTA, Inc. strategic plan. He reviewed several projects that were underway or had been completed to meet the goals of the association. Some of these projects are webinars for the clearinghouse and audit, developing a complete history of IFTA,


combined training opportunities with IRP, developing a commissioner training, quality control reviews of the clearinghouse data, the development of electronic reviews and the establishment of the Re-Audit and Re-Examination Working Group. Approval of the 2010 Minutes Mr. Greenawalt asked for changes or corrections to the minutes of the 2010 Annual IFTA Business Meeting. Hearing none, Mr. Greenawalt asked for a motion to approve. Motion: Mr. James Poe (IN) moved to accept the minutes as written. Mr. Roland Marr (IL) seconded. The motion passed with no opposition. Election Committee Report and Board Election Chair of the Election Committee, Mrs. Platt presented this report. Each year, the Board president selects an Election Committee to seek nominations for election to the Board. Mrs. Platt reported that four (4) current Board members were seeking re-election: Mr. Greenawalt, Mr. Hester, Ms. Sheila Rowen (TN), and Mr. Stuart Zion (CO). Due to term limitations, Ms. Rena Hussey (VA) could not seek re-election. In order to meet the Bylaws requirement of a single board member region, the Election Committee sought a nominee from the Northeast Region. Mrs. Platt announced that Mr. Chuck Ulm (MD) was included in the slate of nominees with the four current Board members. Mrs. Platt then asked for nominations from the floor. Motion: Mr. Julian Fitzgerald (NC) moved to close the nominations. Mr. Bill Kron (MS) seconded. The motion passed without objection. Motion: Mr. Garry Hinkley (ME) moved to approve the nominations of Mr. Greenawalt, Mr. Hester, Ms. Rowen, Mr. Zion, and Mr. Ulm by acclamation. Mr. Gary Frohlick (SK) seconded. The motion passed without objection. Proposed Bylaws Changes Ms. Lonette Turner (IFTA, Inc.), Executive Director, presented a proposed amendment to the IFTA, Inc. Bylaws. The purpose of the proposed amendment was to change the provision that requires the Election Committee to follow a particular regional rotation for the single board member region. The problem arises when there are mid-term resignations. The proposed amendment would also require the Election Committee to determine the single board member region in a fair and equitable manner. Motion: Mr. Scott Bryer (NH) moved to accept the amendment to the IFTA, Inc. Bylaws. Ms. Hussey seconded the motion. The motion passed 51:7. Jurisdictions not voting were counted as dissenting votes. Clearinghouse Update Ms. Turner reported that there are fifty (50) full participating members and three (3) jurisdictions that have signed the non-participating member agreement to view transmittals and demographic data. For the 2010 funds netting year, IFTA, Inc. collected and distributed over $325,600,000 USD and nearly $2,600,000 CAD. Through the first six (6) clearinghouse transmittal periods of 2011, IFTA, Inc. had collected and distributed almost $180,000,000 USD and over $1,200,000 CAD.


Ms. Turner showed a comparison of the first six (6) clearinghouse transmittal periods in 2010 to 2011. For those periods in 2010, IFTA, Inc. transmitted $159,971,156 USD. In 2011, the amount for the same time period was $179,927,949 USD. For those same periods, IFTA, Inc. transmitted $1,385,837 CAD in 2010 and $1,225,470 CAD in 2011. Ms. Turner stated that issues were faced during the implementation year. These issues included checks being inadvertently sent by the jurisdictions; payments not received timely resulting in two prorate periods; payments not received timely resulting in checks being required from a jurisdiction; other types of payments being sent to the funds netting accounts; and data not being uploaded timely. In 2011, the number of issues has reduced and it appears the funds netting process is working. Ms. Turner also reported that the AICPA had changed its requirements regarding SAS 70 audits. No longer are these types of audits being conducted for services such as those provided by the IFTA, Inc. Clearinghouse and funds netting processes. IFTA, Inc. will have an audit completed in which its auditors will utilize Statement of Standards for Attestation Engagements or SSAE 16. In an attestation report, a CPA attests to subject matter or an assertion about something other than the fairness of the presentation of financial statements. The SSAE 16 is applicable when an entity (like the member jurisdictions) outsources a business task or function to another entity (IFTA, Inc.) and the data resulting from that task or function is incorporated into financial statements. So, IFTA, Inc. is the service organization and the jurisdictions are known as user entities. Based on the review of these documents with IFTA, Inc. auditors, these requirements for IFTA, Inc. were identified. Establishing a Funds Netting System Timeliness of the Funds Netting Process Confidentiality Requirements Assignment of Clearinghouse Users Reporting to Jurisdictions Monitoring the Funds Netting Account and Tracking Funds Distribution of Funds Controls (security of data, backups, etc.)

The required description of the IFTA, Inc. funds netting system has been written and includes examples of each type of record kept. Ms. Turner also presented the new screens designed by Jason DeGraf (IFTA, Inc.), Information Systems Administrator. Program Compliance Review Update Mrs. Debora Meise (IFTA, Inc.), Program Director gave an update regarding program compliance reviews. No reviews are being conducted in 2011 due to the five-year review cycle. During 2011, the on-site review procedures were revised and the e-review procedures were written, the volunteer database was updated, preparations are underway for the 2012 reviews, assistance has been given to the Program Compliance Review Committee (PCRC) with revisions to the Review Guide, and training is being developed for e-review volunteers. In 2012, eleven (11) jurisdictions have elected to undergo e-reviews and 4 will be reviewed on-site.


Membership was reminded of the requirement to participate in reviews. A list of all volunteer jurisdictions is maintained at IFTA, Inc. If jurisdictions do not participate on a review they could be found out of compliance when their jurisdiction is reviewed. Committee Reports Agreement Procedures Committee Mrs. Cindy Arnold (NV), Chair of the Agreement Procedures Committee (APC) presented a list of the APC members and reported on the activities of the committee since the 2010 ABM: the committee hosted the 2010 IFTA Managers’ and Law Enforcement Workshop, has held monthly teleconferences, has reviewed the 2011 ballots, and the committee ballot sponsored in 2010 passed and was effective July 1, 2011. On the APC’s action item list are reviewing the Best Practices Guide, its charter, the committee member terms and a new APC Member Guide. Mrs. Arnold then reviewed the agenda for this year’s workshop. Clearinghouse Advisory Committee Mr. Kron, Chair of the Clearinghouse Advisory Committee (CAC) reported on the committee’s activities and announced the committee members. The CAC holds monthly teleconferences which include an update from the Information Technology Advisory Committee (ITAC) and review of enhancement requests. Two subcommittees were created this year; one for quality control review of the clearinghouse data and the other to establish the 2013 funds netting calendar for the Board’s approval. Richard L. Reeves IFTA Leadership Award The presentation of the 2011 Richard L. Reeves IFTA Leadership Award was made. Ms. Turner, Ms. Donna Burch (Ryder, Inc.), Mr. Dan Eisinger (Supervalu, Inc.), Chair of the Industry Advisory Committee (IAC), and Mr. Robert Pitcher (ATA), presented this unique award. This year’s recipient was Mr. Gary Frohlick (SK) who accepted the award graciously. Attorneys’ Section Steering Committee Ms. Carolee Johnstone (CA), Chair, gave the report of the Attorneys’ Section Steering Committee (ASSC). Ms. Johnstone reported that the ASSC members had contacted the member jurisdictions requesting they update their Jurisdiction Communication List to include a current legal contact. Several jurisdictions have done so. The committee is planning to create a newsletter for distribution to these contacts. The ASSC also plans to conduct two webinars in the near future. Additionally the committee hopes to hold another face-to-face meeting as it has been a few years since the last one. Audit Committee Mrs. Meise gave a report on behalf of the Audit Committee (AC) Chair, Ms. Dawn Lietz (NV). The AC is working with the IRP Audit Committee to organize the agenda for the 2012 IFTA / IRP Audit Workshop. The focus of the workshop will be “Auditing in the 21st Century”. The committee has created a subcommittee to review the Audit Manual; has conducted webinars with IRP; and has representatives serving on the ITAC and the Re-Audit and Re-Examination Working Group (RRWG). Mrs. Meise also reported that the Audit Committee has sponsored Full Track Preliminary Ballot Proposal (FTPBP) #2-2011 which is a proposed amendment to A310 and changes the term


“registration” year to “license” year. During discussion a suggestion was made that a definition of license year be added to the Articles of Agreement to coincide with this proposed change. Motor Carrier Technology Demonstration Mrs. Hussey then announced the Motor Carrier Technology Demonstration. The Virginia Department of Motor Vehicles presented six (6) different stations. They provided “MO”, a mobile DMV office that provides driver and vehicle services. This gives the DMV the ability to journey out to remote locations and customers. There was also a vehicle weighing station. The DMV was also showing IRIS. This is an infrared inspection technology which identifies vehicles running with bad brakes and other problems such as under-inflated tires. A station was also set up so the attendees could look at the ARS – Automated Routing Service. This is a tool for oversize and overweight permits. Carriers can get these permits instantaneously on line. A review station was provided for the traffic crash database, an evaluation of road service. Registrants were also given the opportunity to review Virginia’s IFTA and IRP on-line services which includes tax reporting. CBI 62-11 Mr. Zion then presented CBI #62-11. The issues for interpretation were received by the Board from the jurisdiction of Connecticut. Connecticut was seeking clarification of language that was approved in Full Track Final Ballot Proposal (FTFBP) #2-2010. This language is effective July 1, 2013:

For a fleet based in a U.S. jurisdiction, interest shall be set at an annual rate of two (2) percentage points above the underpayment rate established under Section 6621(a)(2) of the Internal Revenue Code, adjusted on an annual basis on January 1 of each year. Interest shall accrue monthly at 1/12 this annual rate. The Repository shall notify Jurisdictions of the new rate by December 1.

Connecticut’s questions were:

1. Is it the Board’s interpretation that it (the Board) has the discretionary authority to assign the duty of calculating the interest rate?

Connecticut pointed out that Ballot #2-2010 does not establish who is responsible for determining the effective interest rate. Therefore, it would seem that the responsibility rests with each member jurisdiction. They also stated that the Bylaws of the International Fuel Tax Association, Inc. do not appear to provide for such authority to be exercised by the Board of Trustees. Article Four, Section One (1) of the Bylaws defines the General Powers of the Board of Trustees. The language is very general (“The affairs of IFTA, Inc. shall be managed by the Board”) and does not seem to include the calculation of an interest rate to be implemented by the member jurisdictions.

2. What consequences exist if the member jurisdictions are not notified on or before December 1? If the member jurisdictions are not notified timely, what is their obligation to impose the correct rate (there are provisions in Section P1120.300 which relieve jurisdictions from taking extraordinary measures to implement a change of tax rate when the rate is not reported timely)?


3. How will interest be imposed, for example, in the following situation? The taxpayer is audited for the periods of October 1, 2010 through September 30, 2013. The audit is completed in late December 2013. Interest is being calculated through January 31, 2014.

Connecticut pointed out that under Article R1230 (effective 7/1/13), the effective rate for the year 2014 will be reported to the member jurisdictions on or before December 1, 2013. How will the member jurisdictions be able to program their systems properly to result in the correct calculation of the January 2014 interest? While the imposition of interest for a late filed first quarter 2014 return will likely have the correct interest application (the rate will have been known to the base jurisdiction on or before December 1 of the year preceding), the audit situation described above is entirely different. As to Question 1, the Board determined that its interpretation of the language from FTFBP #2-2010 would answer Connecticut’s first question. Based on that interpretation, the Board is making no assignment of duties. Therefore, this question is outside of the scope of this Proposed Consensus Board Interpretation. The proposed Consensus Board Interpretation stated:

The rate established by the language in FTFBP 2-2010, effective July 1, 2013, is clearly stated: “an annual rate of two (2) percentage points above the underpayment rate established under Section 6621(a)(2) of the Internal Revenue Code, adjusted on an annual basis on January 1 of each year. Per the current ballot language, IFTA, Inc. would notify the member jurisdictions, by December 1 of each year, of the calculated rate: the IRS underpayment rate + 2%. The ballot states: “Interest shall accrue monthly at 1/12 this annual rate.” The calculation for the monthly rate is the responsibility of each jurisdiction. The notification by IFTA, Inc. is provided as a convenience and does not relieve the jurisdictions from imposing the correct interest rate. The interest rate applies for the calendar year for all deficiencies. Several interest rates may be in effect successively during the period that an underpayment remains outstanding.

Following the presentation and discussion, Mr. Greenawalt asked for a motion to accept the Board’s interpretation of CBI 62-11. Motion: Mr. Hinkley moved to accept the proposed Consensus Board Interpretation. Mr. Julian Fitzgerald (NC) seconded the motion. A roll call vote was taken and the motion passed by a vote of 49 to 9. Jurisdictions not voting were counted as dissenting votes. Short Track Preliminary Ballot Proposal 4-2011 Mr. Zion presented Short Track Preliminary Ballot Proposal (STPBP) #4-2011. This ballot is sponsored by the Board and would remove the language approved in FTFBP #2-2011 which requires: “The Repository shall notify Jurisdictions of the new rate by December 1.”


Motion: Ms. Hussey moved to accept STPBP 4-2011. Mr. Hinkley seconded the motion. Following a roll call vote the motion failed 27 to 31. Jurisdictions not voting were counted as dissenting votes. STPBP 4-2011 will not continue. Closed Session The second day of the business meeting started with a closed session for jurisdiction representatives only. The purpose of the closed session was for the presentation of the financial report and the discussion of a dues increase. Before the session was closed, a roll call was taken to ensure that a quorum was present to conduct the business of the association. Fifty-three (53) jurisdictions were present in person or by proxy. The session was then closed. During the closed session the following motions were made. Motion: Mr. Kron moved to accept the proposed dues increase as presented. Mrs. Hussey moved to second. A roll call vote was taken and the motion was defeated by a vote of 32 to 22. Jurisdictions not voting were counted as dissenting votes. Motion: Mr. Bryer moved to raise the dues to $18,000 per year beginning in fiscal year ending June 30, 2014. Mrs. Arnold seconded the motion. Following discussions, Mr. Bryer rescinded his motion and Mrs. Arnold withdrew her second. Motion: Ms. Kitty Decker (AZ) moved to increase the dues to $18,000 per year beginning in fiscal year ending June 30, 2014. Mr. Kron seconded the motion. Discussion followed this motion. Motion: Mr. Kron moved to table the motion by Ms. Decker. Mrs. Arnold seconded the motion. This motion passed with no opposition. Committee Reports Re-Audit and Re-Examination Working Group The open session resumed with Mr. Frohlick presenting reports on behalf of the RRWG and the Dispute Resolution Committee (DRC). Mr. Frohlick is the Chair of the RRWG and Vice Chair of the DRC. For the RRWG, Mr. Frohlick listed the committee members and reviewed the working group objectives. He stated that the committee has moved toward recommending that the “re-audit” and “re-examination” become part of a single audit process. The group will be drafting a ballot for next year and is currently reviewing the Board’s latest comments to the working group’s response to its charge. Dispute Resolution Committee For the Dispute Resolution Committee (DRC), Mr. Frohlick stated that there had been no disputes since the 2010 ABM. The committee is currently working on a charge from the Board. The Board gave the DRC six (6) action items to review. Three (3) have been completed and the committee continues to work on the other three (3). The remaining action items include the authority of the DRC and the Board and whether there should be an intermediate step by a third party. The committee continues to discuss whether that step is warranted.


Industry Advisory Committee Mr. Eisinger presented the IAC report. He reported that the committee has had extensive discussions regarding the IFTA decals and would like to see them eliminated. He also reported that the IAC has an active role in the planning of the 2012 Audit Workshop. A representative of the committee will also attend the IFTA Managers’ and Law Enforcement Workshop. Information Technology Advisory Committee Mr. John Poole (TX), ITAC member, gave the committee report and listed the members of the committee. Mr. Poole reported that the committee continues its monthly conference calls and has also extensively used the committee message board to exchange information. The ITAC has completed its charge from the Board regarding investigating, analyzing and reporting on the current capabilities of GPS and other vehicle tracking systems as they apply to commercial trucking operations. A second charge has been received from the Board that asks the ITAC to provide the Audit Committee with support as it completes its review of the ITAC’s work product regarding vehicle tracking systems and proposed revisions to P600. A third charge asks the ITAC to identify and analyze existing motor carrier data information systems to determine whether there is a viable method to provide roadside law enforcement a snapshot of all pertinent data. Law Enforcement Committee Lt. Jennifer Brown (AZ), Chair, gave the Law Enforcement Committee (LEC) report. Lt. Brown stated that the committee continues its monthly conference calls. Due to committee member retirements, vacancies from the Northeast, Southeast, and Western regions need to be filled. She reported that more jurisdictions participated in the March and May (M&M) enforcement activities and that a database was developed by IFTA, Inc. to allow the LEC to collect enforcement statistics from these activities. The LEC co-sponsored a ballot with the Jurisdiction of Illinois. Full Track Preliminary Ballot Proposal 1-2011 Mr. Trent Knoles (IL), and a member of the LEC, presented FTPBP #1-2011 for discussion. This ballot proposes the addition of the issue date to the IFTA license. Mr. Knoles stated that there is a distinction between the issue date of the license and the effective date of the license. The membership discussed whether the issue date should be defined. During discussions it was explained that the issue date is important for roadside enforcement that could lead to a possible audit. Furthermore the issue date could affect post-violation actions such as possible waiving of a penalty assessment. Program Compliance Review Committee Mr. Jay Starling (AL), Past-Chair of the Program Compliance Review Committee (PCRC), presented this report on behalf of the current Chair, Mr. John Szilagyi (CT). The PCRC is recruiting for administrative representatives from two regions; Northeast and Southeast. Projects of the committee include reviewing the program, conference calls, a subcommittee with the APC to address electronic filing and its impact on the Agreement, and a face-to-face meeting regarding the impact of FTFBP 1-2009 and E-reviews. The committee has also updated the Program Compliance Review Guide to include and accommodate both on-site and electronic reviews (E-reviews). It was explained that the review process itself is not affected by these changes except for the initial jurisdiction review which will be revised from 90 to 120 days prior to the actual review.


Mr. Greenawalt called for a vote to ratify the PCR Guide by a show of hands. With a vote of 49 in favor membership ratified the document. IFTA, Inc. Financial Report Following the committee reports, the discussions returned to the financial report. Discussions then returned to the membership dues increase. Motion: Ms. Platt moved to have the dues increase motion un-tabled. Mr. Doug Miller (MI) seconded the motion. The motion passed. Mr. Greenawalt asked for the motion to be restated. Motion: Ms. Kitty Decker (AZ) moved to increase the dues to $18,000 per year beginning in fiscal year ending June 30, 2014. Mr. Kron seconded the motion. Discussion followed this motion. Following a roll call vote the motion failed by a vote of 32 to 22. Jurisdictions not voting were counted as dissenting votes. Motion: Mr. Bryer moved to increase the membership dues to $17,000 beginning fiscal year ending June 30, 2014, including travel costs for the jurisdictions’ voting representative to attend the Annual IFTA Business Meeting. Mr. Bernie Meagher (NS) seconded this motion. Discussion was had regarding the trust of the Board in regards to inserting the travel expenses into the motion. It was explained that the additional wording would assist members in their travel requests. Following a roll call vote the motion passed by a vote of 40 to 16 with two jurisdictions abstaining. Jurisdictions not voting were counted as dissenting votes. 2012 Invitational Mr. Miller invited those in attendance to the 29th Annual IFTA Business Meeting in Grand Rapids, Michigan in 2012. The dates of this meeting have been set for July 18 – 19. THE IFTA NEWS will contain additional details about the business meeting throughout the coming year. Full Track Preliminary Ballot Proposal 3-2011 Mr. Meagher, Ms. Virginia Barnett (ON), and Ms. Angelina Leung (AB) presented FTPBP #3-2011 for discussion. This ballot proposes a pilot project for the sponsoring jurisdictions regarding number of audits completed. The number of audits completed would include, for the five-year pilot project period, compliance activities, roadside enforcement activities, and education and outreach activities. The purpose of the ballot is the recognition that enforcement, educational, and compliance efforts contribute toward audit coverage. During the pilot project, the jurisdictions would consult with the IAC and the LEC ensuring alternative measures are clearly defined, consistent and measurable. The pilot jurisdictions may apply alternative measures for up to 1% of audit coverage. The remaining 2% must be traditional audits. It was pointed out that in many jurisdictions, audit resources are allocated to higher risks, such as sales and use tax. It was also stated that audit alone is not the most efficient effort for compliance. In the pilot, the participants would calculate average hours per audit; specify alternative activities; and one hour of an alternative activity would equal one audit hour.


Those in attendance offered feedback on the ballot. It was suggested that the sponsors should consider conducting a pilot project without including it in the governing documents. It was also suggested that such a pilot need not be limited to only the sponsors of this ballot proposal. It was further suggested that only those jurisdictions currently meeting the number of audits requirement should participate. IRP and IRP, Inc. Update Ms. Mary Pat Paris (IRP, Inc.), CEO, presented a report concerning the activities of IRP and IRP, Inc. There were 158 in attendance at the IRP Annual Meeting in May. The IRP, Inc. Board funded one person from each jurisdiction to attend. IRP is working with IFTA for the planning of the Managers’ and Law Enforcement Workshop. IRP conducted 20 webinars which included 1,500 participants. There were three (3) ballot proposals: full reciprocity, charter buses, and the audit manual rewrite. The charter bus ballot failed. IRP has many other activities and projects underway. FHwA Mr. Michael Dougherty, Program Analyst with the Federal Highway Administration (FHwA) gave a presentation that covered the Surface Transportation Program at the Federal level and the way that IFTA data factors into the apportionment of funds to the States. The presentation began with an overview of the current authorization (which is currently operating under an extension) and what is being proposed for the next program which would probably last about 5 years or so. The various taxes and fees that went into the Federal Highway Trust Fund (HTF) were explained and issues that are causing a reduction not only in the balance, but also future revenue were discussed. Included in the presentation was a description of what data is collected by FHwA, including IFTA gallons, and how it is used to compute the amount of fuel used on the highways in each state, so that there was a common basis for distributing funds from the HTF into several Federal programs. The presentation concluded with a review of the Congressional proposals to date for a new authorization, with some discussion as to how it may affect the reporting of IFTA data to the FHwA. Alternative to Decals Survey Mr. Hinkley presented the results of a survey taken of the membership regarding alternatives to decals. Forty-two jurisdictions responded, representing 170,000 accounts and 1.8 million decals. Twenty-eight jurisdictions suspend other credentials when IFTA decals are not displayed. If there was a reliable system available, twenty-three jurisdictions would give up decals. Only sixteen jurisdictions would be in favor of no decals for larger carriers only. United States / Mexican Motor Carrier Long-Haul Pilot Project Mr. Poole presented a report regarding the US/Mexico Cross-Border Long-Haul Pilot Program. Negotiations for this project began in March 2011. Applications are being accepted by FMCSA now from Mexican carriers. The pilot will last up to three (3) years. The IRP International Committee has established a subcommittee for this project. IFTA is participating. Two conference calls have been held and action items were established. New Business Items Mr. Marr announced that over the course of the following year Illinois would be contacting membership to address Agreement issues that have impacted the decisions made this year,


specifically the issue of voting and jurisdictions not in attendance at the business meeting. It is the view of Illinois that those who opt not to attend the business meeting, or not provide a voting proxy, should not have an impact on the outcome of a vote. Adjournment Mr. Greenawalt thanked the staff of the Virginia Department of Motor Vehicles for all of their work toward making the meeting so successful. Concluding the business discussions of the organization Mr. Greenawalt asked for a motion to adjourn. Motion: Mr. Kron moved to adjourn the 28th Annual IFTA Business Meeting. Ms. Platt seconded the motion. The motion passed with no objections.

IFTA, Inc. Bylaws Proposed Amendment for 2012 Annual Business Meeting

July 2012 Page 1 of 10

BYLAWS OF THE INTERNATIONAL FUEL TAX ASSOCIATION, INC.

An Arizona Nonprofit Corporation

Article One - Offices

The principal office of the International Fuel Tax Association, Inc. (hereinafter referred to

as “IFTA, Inc.”) in the State of Arizona is located in the City of Chandler, County of Maricopa.

IFTA, Inc. may have such other offices, either within or out of the State of Arizona as may be

necessary to conduct the business of the corporation. The principal office of IFTA, Inc. may be

changed from time to time in the manner provided in the Arizona Revised Statutes and without

amending the Articles of Incorporation.

Article Two - Membership

Section 1. Eligibility and Requirements. Membership in IFTA, Inc. shall be open to any

state of the United States of America, the District of Columbia, any province or territory of Canada

or a state of the United Mexican States. Any such entity desiring membership must submit an

application to IFTA, Inc. The application must be in accordance with Article XIV of the

International Fuel Tax Agreement (hereinafter referred to as the “Agreement”). All members must

pay the annual membership fee adopted at an annual meeting of IFTA, Inc. and required by the

Agreement. Continued membership in IFTA, Inc. is contingent upon compliance with all terms of

the Agreement.

Section 2. Expulsion. Any member failing to properly comply with the terms of the

Agreement may be expelled as provided in Article XV of the Agreement.

Section 3. Withdrawal. Any member may withdraw from IFTA, Inc. upon compliance

with Article XIV of the Agreement.



Article Three - General Membership Meetings

Section 1. Quorum. A two-thirds majority of the active member jurisdictions of IFTA, Inc.

shall constitute a quorum. A quorum is required to conduct the business of IFTA, Inc. at a

meeting of the members of the corporation. For the purposes of determining whether a quorum is

established, active member jurisdictions present and/or represented by proxy shall be considered

present at the meeting.

Section 2. Annual Meeting. An annual meeting of the members of IFTA, Inc. shall be

held once each year for the purpose of electing Trustees to the Board of Trustees (hereinafter

referred to as the “Board”) and for the transaction of such other business as may come before the

meeting. The annual meeting shall be held at such time and place as determined by the Board.

Section 3. Special Meetings. Special meetings of the members of IFTA, Inc. may be

called by the Board. Such meetings shall be held at such time and place as determined by the

Board.

Section 4. Notice of Meetings. Written notice stating the place, day, and hour of any

meeting of the members of IFTA, Inc. shall be delivered by mail to each member entitled to vote

at such meeting, not less than ten days before the date of such meeting. In the case of a special

meeting, the notice shall contain a statement of the purpose of the meeting. Notice shall be

deemed delivered on the date that same is deposited in the national post office of the country of

origin of the notice addressed to the members at the address last appearing in the records of

IFTA, Inc., with postage thereon prepaid.

Section 5. Voting Rights. Each active member jurisdiction of IFTA, Inc. shall be entitled

to one vote on each matter submitted to a vote of the members at a meeting, except for a vote to

elect Trustees to the Board, and on such votes each active member jurisdiction shall have one

vote for each Trustee to be elected. Each active member jurisdiction shall use all votes available

to it when electing Trustees, but may not use more than one vote for a single candidate. A simple

majority of active member jurisdictions is required to elect a trustee to the board. Each active

member jurisdiction may cast their vote by an authorized representative in person, or by proxy.



Article Four - Board of Trustees

Section 1. General Powers. The affairs of IFTA, Inc. shall be managed by the Board.

Section 2. Number and Tenure. There shall be nine Trustees on the Board. The term

of office for a Trustee shall be two years, with five Trustees elected in years ending in an odd

number and the other four Trustees elected in years ending in an even number, so as to provide

for staggered terms of the Trustees. No Trustee may serve more than three complete two-year

consecutive terms.

Section 3. Qualifications and Requirements. Any commissioner of a member

jurisdiction, or their designee, is eligible to serve as a Trustee. However, at least one Trustee

shall be from each of the five geographic regions outlined in these bylaws (see Appendix A). No

more than two trustees shall be from a single geographic region with the region represented by

one trustee rotating among the geographical regions in a fair and equitable manner. At least one

Trustee shall be a member where fuel taxes are administered by a tax or revenue department,

and at least one Trustee shall be a member where fuel taxes are administered by a department of

transportation or department of motor vehicles. At least one Trustee shall be a woman or

minority. A single Trustee on the Board may satisfy more than one criterion.

Section 4. Regular Meetings. The Board shall meet each calendar quarter unless the

President of IFTA, Inc. determines otherwise. These meetings shall be at such times and at such

places as designated by the President of IFTA, Inc.

The first regular annual meeting of the Board shall be the second meeting of the Board

held after the annual meeting of IFTA, Inc. The purpose of this meeting will be to elect officers of

IFTA, Inc., in addition to such other business as may come before the Board at said meeting.

The Board may provide by resolution for the time and place of the regular annual meeting and

such additional regular meetings of the Board necessary to manage the business of IFTA, Inc.

without any notice other than such resolution.

Section 5. Special Meetings. Special meetings of the Board may be called by the

President of IFTA, Inc. The time and place of special meetings shall be fixed by the President,

and if desirable, may be held via teleconference and/or e-mail.



Section 6. Notice. Notice of any special meeting of the Board shall be given at least two

days prior to the meeting if sent via facsimile or e-mail, or seven days prior if sent via the national

post office of the country of origin of the notice. Notice shall be deemed delivered on the day of

the facsimile or e-mail transmission or the day same is deposited in the mail with prepaid

postage. Any Trustee may waive notice of a meeting. The attendance of a Trustee at a meeting

shall constitute a waiver of notice of such meeting, unless said Trustee appears solely to object to

the transaction of business at the meeting due to improper notice and also refuses to take part in

any of the business transacted at such meeting because of the improper notice.

Section 7. Quorum. A two-thirds majority of the Trustees shall constitute a quorum for

the transaction of business at any meeting of the Board; but, if less than a two-thirds majority of

the Trustees are present at a meeting, a majority of the Trustees present may adjourn the

meeting from time to time without providing any further notice of said meeting.

Any one or more members of the Board may participate in a meeting of the Board by

means of conference telephone or similar communications equipment by means of which all

persons participating in the meeting can communicate with each other, and participation in a

meeting by such means shall constitute presence in person at such meeting.

Section 8. Voting Rights. Each Trustee shall have one vote.

Section 9. Manner of Acting. Except as otherwise provided in these bylaws, the act of a

two-thirds majority of the Trustees shall be the act of the Board. A Trustee present at a meeting

of the Board at which action on any matter of IFTA, Inc. is taken shall be presumed to have

assented to the action unless a dissent is entered in the minutes of the meeting, or unless a

dissent has been filed with the Executive Director of IFTA, Inc. No Trustee who votes in favor of

any action may file a dissent or have same entered in the minutes of the meeting.

Section 10. Vacancies

Full Term Vacancies - The President of IFTA, Inc. shall direct that nominations be sought

from member jurisdictions for election to the Board. Nominations including those of trustees

wishing re-election may be made prior to the annual meeting or from the floor at the Annual

Business Meeting.

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The President of IFTA Inc. shall each year establish an Election Committee consisting of

the Trustees whose terms are not expiring. The Election Committee shall select a Chair. The

duties of this committee are to ensure the Qualifications and Requirements set forth in Article

Four, Section 3 herein are met, to ensure equitable geographic representation is maintained and

to conduct the election at the Annual Business Meeting.

All nominees for the Board of Trustees will be voted upon by the member jurisdictions at

the Annual Business meeting.

Mid-term Vacancies - Any mid-term vacancy occurring on the Board shall be filled by

nominations from jurisdictions in the regions in which the vacancy occurred. Nominations shall

be received within 20 days of being solicited and commissioners from all member jurisdictions will

have a further 20 days to vote. If only one nominee is received by the nomination deadline, the

Board of Trustees may accept the nominee by acclamation. The nominees receiving the most

votes or being named by acclamation will take a seat on the Board of Trustees effective with the

next scheduled Board of Trustees meeting. A Trustee elected to fill a vacancy shall serve the

unexpired term of his or her predecessor Trustee provided the vacancy occurred in the last 18

months of the term being vacated. A Trustee elected to fill a vacancy which occurred in the first

six months of the vacated term will be considered to be serving her/his first two year term.

To expedite the replacement of mid-term vacancies, nominations and elections will be

conducted using electronic means.

Section 11 Standing Committees. No member of the Board shall serve as the chair,

vice-chair, or as a member of a Standing Committee established by the International Fuel Tax

Agreement.

Section 12. Resignation. A Trustee who misses is absent from two consecutive board

meetings shall have deemed to have resigned from the Board unless an absence is excused by a

majority of the Board. A Trustee who has so resigned may be reappointed in accordance with

Section 10 of this Article.

Article Five - Officers

Section 1. Titles and Duties. The officers of IFTA, Inc. shall be the President, the First

Vice-President, the Second Vice-President, and the Secretary/Treasurer. The President shall be

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the principal executive officer of IFTA, Inc. The President shall preside at all meetings. The

President shall prepare and present an annual report of the work of IFTA, Inc. to the members at

the annual meeting. The President shall see that all books, reports, and certificates required by

law are properly kept or filed. The President shall have such other powers that may be

reasonably necessary to the performance of the office. The First Vice-President, the Second

Vice-President, and the Secretary/Treasurer shall perform such duties as the President may from

time to time assign or delegate to them.

Section 2. Election and Term of Office. The President, First Vice-President, and the

Second Vice-President shall be elected by majority vote of the Trustees. Only Trustees shall be

eligible to be President, First Vice-President, and the Second Vice-President. The Executive

Director of IFTA, Inc. shall be appointed by the Board to serve as Secretary/Treasurer. The

Executive Director of IFTA, Inc. shall be an ex officio member of the Board with no voting rights.

The President, First Vice-President, and the Second Vice-President shall serve a one year term,

but may serve more than one term. The Secretary/Treasurer shall serve as long as that person

remains Executive Director of IFTA, Inc.

Section 3. Vacancies. Should the office of President become vacant, the First Vice-

President shall fill the vacancy. Should the office of First Vice-President become vacant, the

Second Vice-President shall fill the vacancy. A vacancy in the office of Second Vice-President

shall be filled by a two-thirds majority vote of the remaining Trustees. Should the office of

Secretary/Treasurer become vacant, the Board shall appoint the incoming Executive Director of

IFTA, Inc. to fill the vacancy. Officers who fill vacancies shall serve the unexpired portion of the

term of the predecessor in that office.

Section 4. Resignation. The President, First Vice-President, and Second Vice-President

may resign from the office without having to resign from the Board.

Section 5. Compensation. The President, First Vice-President, and Second Vice-

President shall not, by virtue of the office, be entitled to receive any salary or compensation from

IFTA, Inc., but nothing shall be construed to prevent any officer from receiving reimbursement for

any expenses incurred on behalf of IFTA, Inc. The Secretary/Treasurer shall not be entitled to

any compensation from IFTA, Inc. by virtue of the office, other than that paid as salary and



benefits to the Executive Director of IFTA, Inc. No reimbursement for expenses shall be paid to

the President, First Vice-President, and the Second Vice-President unless approved by the Board

by a two-thirds majority vote. No reimbursement for expenses shall be paid to the

Secretary/Treasurer unless approved by a majority of the Executive Committee.

Article Six – Committees Section 1. Executive Committee. The President, First Vice-President, and Second Vice-

President shall constitute the Executive Committee. The Executive Committee shall have such

powers and duties as assigned to it by a two-thirds majority vote of the Trustees.

Section 2. Agreement Procedures Committee. The Agreement Procedures Committee

shall have the responsibility of maintaining the Articles of Agreement and the Procedures Manual,

and such other responsibilities assigned to it by the Board. In discharging these responsibilities,

the Agreement Procedures Committee shall seek input from the Audit Committee, Law

Enforcement Committee, Program Compliance Review Committee, and the Industry Advisory

Committee. The President, with the approval of the Board, shall appoint an Agreement

Procedures Committee Chair. The chair shall select the committee members to serve on the

Agreement Procedures Committee, subject to approval by the Board. The committee members

shall be selected from the membership of IFTA, Inc.

Section 3. Audit Committee. The Audit Committee has the responsibility for the Audit

Manual, and such other responsibilities assigned to it by the Board. In discharging these

responsibilities, the Audit Committee shall seek input from the Agreement Procedures

Committee, Law Enforcement Committee, Program Compliance Review Committee, and the

Industry Advisory Committee. The President, with the approval of the Board, shall appoint an

Audit Committee Chair. The Chair shall select the committee members to serve on the Audit

Committee, subject to approval by the Board. The committee members shall be selected from

the membership of IFTA, Inc.

Section 4. Industry Advisory Committee. The Industry Advisory Committee has the

responsibility of advising the Agreement Procedures Committee, Audit Committee, Law

Enforcement Committee, and Program Compliance Review Committee, as well as such other

responsibilities assigned to it by the Board. The President, with the approval of the Board, shall



appoint an Industry Advisory Committee Chair. The Chair shall select the committee members to

serve on the Industry Advisory Committee, subject to approval by the Board. The committee

members shall be selected from the Industry representatives who have expressed an interest in

working with the Board.

Section 5. Law Enforcement Committee. The Law Enforcement Committee has the

responsibility of advising the IFTA membership regarding law enforcement matters, and such

other responsibilities as specified in the International Fuel Tax Agreement or assigned to it by the

Board. In discharging these responsibilities, the Law Enforcement Committee shall seek input

from the Agreement Procedures Committee, the Audit Committee, the Program Compliance

Review Committee, and the Industry Advisory Committee. The President, with the approval of

the Board shall appoint a Law Enforcement Committee Chair. The Chair shall select the

committee members to serve on the Law Enforcement Committee, subject to approval by the

Board. The committee members shall be selected from the membership of IFTA, Inc.

Section 6. Program Compliance Review Committee. The Program Compliance

Committee has the responsibility of maintaining the IFTA Program Compliance Review Guide,

establishing and maintaining a pool of qualified individuals to conduct compliance reviews,

reviewing all program compliance review reports to determine any needs for reassessment, to

make findings of compliance or non-compliance, and such other responsibilities as specified in

the International Fuel Tax Agreement or assigned to them by the Board. In discharging these

responsibilities, the Program Compliance Review Committee shall seek input from the Agreement

Procedures Committee, the Audit Committee, the Law Enforcement Committee, and the Industry

Advisory Committee. The President, with the approval of the Board, shall appoint a Program

Compliance Review Committee Chair. The Chair shall select the committee members to serve

on the Program Compliance Review Committee, subject to approval by the Board. The

committee members shall be selected from the members of IFTA, Inc.

Section 7. Dispute Resolution Committee. The Dispute Resolution Committee has the

responsibility for hearing disputes pursuant to the IFTA Dispute Resolution Process. The Dispute

Resolution Committee facilitates dispute resolution in a fair, impartial, effective, and expeditious

manner. The President, with the approval of the Board shall appoint a Dispute Resolution



Committee Chair. The Chair shall select the committee members to serve on the Dispute

Resolution Committee, subject to approval by the Board. The committee members shall be

selected from the members of IFTA, Inc. and the Industry Advisory Committee as set forth in the

Dispute Resolution Committee Charter approved by the Board.

Section 8. Other Committees. The President, with the approval of the Board, may

establish such other committees as from time to time are deemed necessary or desirable, and

may, with the approval of the Board, appoint Chairs to such Committees.

Article Seven - Employees

The Board may hire and fix the compensation and fringe benefits of any and all

employees which they may, in their discretion, determine to be necessary to conduct the

business of IFTA, Inc.

Article Eight - Contracts, Loans, Checks, and Deposits

Section 1. Contracts. The Board may authorize any officer to enter into any contract or

execute and deliver any instrument in the name of and on behalf of IFTA, Inc. and such authority

may be general or confined to specific instances.

Section 2. Loans. No loans shall be contracted on behalf of IFTA, Inc. and no evidence

of indebtedness shall be issued in its name unless authorized by the Board. Such authority may

be general or confined to specific instances.

Section 3. Checks, Drafts, etc. All checks, drafts or other orders for the payment of

money, notes, or other evidences of indebtedness issued in the name of IFTA, Inc. shall be

signed by such officers or agents of the corporation and in such manner as shall from time to time

be determined by the Board.

Section 4. Deposits. All funds of IFTA, Inc. not otherwise employed shall be deposited

from time to time to the credit of the corporation in such banks, trust companies, or other

depositories as the Board may select.

Article Nine - Definitions and Waiver of Notice

Section 1. Definitions. Except as provided by Article Three – Section 5, when the term

majority is used in these bylaws it shall mean a two-thirds majority of the active member

jurisdictions when referring to votes of members or a two-thirds majority of the Trustees, unless



otherwise specified, when referring to votes on the Board. Any other terms used in these bylaws,

not defined herein, shall have the same meaning as provided in the Agreement if the terms are

defined therein.

Section 2. Waiver of Notice. When any notice is required to be given under these

bylaws, a waiver thereof, in writing, signed by the member or Trustee entitled to such notice,

whether before or after the time stated therein, shall be deemed equivalent to the giving of proper

notice.

FOR DISCUSSION AT THE ANNUAL IFTA BUSINESS MEETING

IFTA Full Track Preliminary Ballot Proposal #01-2012

February 1, 2012 Page 1 of 3

IFTA FULL TRACK PRELIMINARY BALLOT PROPOSAL

#01-2012 Sponsor IFTA Agreement Procedures Committee IFTA Program Compliance Review Committee Date Submitted January 17, 2012 Proposed Effective Date January 1, 2014 Manual Sections to be Amended (January 1996 Version, Effective July 1, 1998, as revised) IFTA Procedures Manual P700 Standard Tax Returns Subject To clarify the requirements for filing an IFTA Tax Return. History/Digest As technology advances, requests from licensees to file their quarterly IFTA tax returns online have increased. Jurisdictions have increasingly accommodated licensees in this regard; some even requiring what licensees file online. It was determined that P700 does not adequately address what is required to be included or captured. Therefore, the IFTA Agreement Procedures Committee and the IFTA Program Compliance Review Committee formed a subcommittee, the Electronic Filing Subcommittee to ballot language that would provide guidance and consistency among the jurisdictions, regarding data elements that shall be captured on IFTA tax returns. Intent The intent of this ballot is to provide an update to the IFTA Procedures Manual to include the necessary requirements for filing an IFTA tax return, regardless of the manner filed.



Interlining Indicates Deletion; Underlining Indicates Addition P700 STANDARD TAX RETURNS 1 2 The data elements listed in P720 are to be data captured regardless of the method of completion of the 3 tax return (manually, electronically prepared or electronically prepared and filed) and must be provided on 4 the appropriate transmittal. 5 6 {SECTIONS P710 AND P730 REMAIN UNCHANGED} 7 8 *P720 REQUIRED INFORMATION 9 10 Each jurisdiction shall use a standard tax return that shall contain, but not be limited to, the elements 11

listed below: 12 13 .050 Name and mailing address of the jurisdiction issuing the tax return; 14 15 .100 A space for the IFTA license number of the licensee; 16 17 .150 A space for the Name and address of the licensee; 18 19 .200 A space for the Tax reporting period of the tax return; 20 21 .250 A space for the Total distance traveled in all jurisdictions during the tax reporting period, 22

including operations with trip permit; 23 24 .300 A space for Total fuel consumed in all jurisdictions during the tax reporting period; 25 26 .350 A space for the Average fuel consumption factor (to two decimal places) for the tax reporting 27

period; 28 29 .400 A space for the Fuel type(s) consumed during the tax reporting period; 30 31 .450 Columns for the jurisdictions in the Agreement; 32 33 .500 Columns for reporting for each jurisdiction in order (with rounding provided to the nearest 34

whole unit); 35 36 .010 Tax rate; 37 38 .015 Total miles or kilometers; 39 40 .020 Total taxable miles or kilometers; 41 42 .025 Taxable gallons or liters; 43 44 .030 Tax paid gallons or liters; 45 46 .035 Net taxable gallons or liters; 47 48 .040 Tax due; 49 50



.045 Interest due; and 51 52 .050 Total due; 53 54 .550 Totals for the columns that are listed under P720.500 with the exception of 55

P720.500.010 and P720.500.045; 56 57 .600 A space for Penalty or late filings fees ($50.00 or 10 percent of the tax, whichever is greater); 58 59 .650 A space for the Total remittance of the tax return; 60 61 .700 A space for the Date of the submitted tax return; 62 63 .750 A space for the Signature of the person filing the licensee’s tax return, unless the licensee 64

is filing electronically in accordance with R940.300 and P160. 65 66 .800 A space for the Title of the person filing the licensee's tax return; and 67 68 .850 A space for the Telephone number of the person filing the licensee's tax return. 69 70 A space for previous balances may be included. 71 72 73

NO REVISIONS FOLLOWING THE FIRST COMMENT PERIOD

FTPBP #1-2012 First Comment Period Ending May 16, 2012

FTPBP #1-2012 First Comment Period Ending May 16, 2012 Page 1 of 5

SUMMARY

42 Comments

Support: 34 Oppose: 3 Undecided: 5

ALABAMA

Support

ALBERTA

Undecided

Alberta has some concerns. Our online system currently captures the demographic information at the registration stage, eg, who can file the return, their name, phone number and email address, etc. Each filer is assigned an ID so that we will know who actually files the return. Redesigning a return for electronic filing that contains information we already obtain at our registration stage may cause us problems.

ARIZONA

Support

Audit Committee

Undecided

The AC Supports the intent of this ballot but is concerned that the removal of providing “A space for the….” will change the meaning of P720 and will require each jurisdiction to “pre-populate” all of the data fields. This is not possible as it would require the jurisdiction to fill in information that it does not have like “total distance traveled” etc. Recommend revising the language to remove “Each jurisdiction shall use” from the Required Information in P720 to read, “A standard tax return shall contain, but not be limited to, the elements listed below.”

BRITISH COLUMBIA

Support

BC Supports the ballot but finds the wording confusing/problematic and would suggest the following.

P700 – A standard tax return shall contain the elements listed in P720 regardless of how the tax return (e.g., manually or electronically) is prepared and filed. These elements must also be provided on the appropriate transmittal.

Unrelated but another suggestion within P720:

“P720.550 – Totals for the columns that are listed under P720.500 with the exception of P720.500.010, P720.500.035; and P720.500.045.”

There appears to be no value in carriers calculating the total “net taxable gallons or liters” for all jurisdictions.



CALIFORNIA

Support

COLORADO

Support

CONNECTICUT

Support

IDAHO

Support

ILLINOIS

Undecided

IOWA

Support

KANSAS

Support

Kansas Supports this ballot our paper and electronic filed returns already capture all the needed data. We would also like to suggest that e-mail addresses and total interest column may be included as an optional field.

MAINE

Support

MANITOBA

Support

MARYLAND

Support

MASSACHUSETTS

Support

MICHIGAN

Support

Language subject to changes

MINNESOTA

Undecided

Minnesota is unsure of the unintended consequences of the proposal. The concern is “data captured” . The paper tax return contains the base jurisdiction name and address, an



electronically filed tax return does not capture the base jurisdiction name and address. The P700 Proposal states the data “must be provided on the appropriate transmittal.” This appears to be a change to the transmittal data as currently the transmittal data does not capture the items in P700.750,P720.800, and P700.850.

MISSOURI

Support

Missouri's MCE system captures the required information at our common customer and IFTA fleet levels, however, it does not capture the information on the tax return if it is filed online. Missouri has approximately 1600 customers, per quarter, that file via paper.

MONTANA3

Support

NEBRASKA

Oppose

Nebraska has some concerns regarding the language used in this ballot. To state that the "data elements listed in P720 are to be data captured....." poses a problem in our view. IF the term 'data captured' implies that the carrier is keying in this data or that the on-line process somehow stores this data per tax return - we would have problems with that. For example, while we do have our jurisdicton name and address printed on the paper tax return - we do not store nor do we capture that information on an electronically filed tax return.

NEVADA

Oppose

Nevada would like the language changed in P720 to state "A standard tax return that shall capture, but not be limited to, the elements listed below" to remove the responsibility of the jurisdiction from providing the elements on the tax return. The former language simply required 'a space' for each element. Additionally, R950 should be changed from 'a standard tax return form that contains...' to 'a standard tax return that captures...' since the intent of the ballot was to move to the electronic world. Nevada does not want the tax returns to be required to be pre-printed.

NEW BRUNSWICK

Support

NEW HAMPSHIRE

Support

NEW JERSEY

Support

NEW MEXICO

Support



NEW YORK

Oppose

New York feels that the language does not reflect what the intent of this ballot.

NORTH CAROLINA

Support

NORTH DAKOTA

Undecided

NOVA SCOTIA

Support

OHIO

Support

ONTARIO

Support

Ontario Supports the proposed language as it provides guidance and consistency among the jurisdictions regarding data elements to be captured on IFTA tax returns.

PENNSYLVANIA

Support

PRINCE EDWARD ISLAND

Support

QUEBEC

Support

SASKATCHEWAN

Support

TEXAS

Support

Suggest this ballot also delete P720.550 requiring totals for each column on the return. Having a total for each column should be optional.

UTAH

Support

VERMONT

Support

VIRGINIA

Support



WEST VIRGINIA

Support

WYOMING

Support





#02-2012 Sponsor Jurisdiction of Colorado Date Submitted January 31, 2012 Proposed Effective Date July 1, 2013 Manual Sections to be Amended (January 1996 Version, Effective July 1, 1998, as revised) IFTA Articles of Agreement R1200 ASSESSMENT AND COLLECTION R1230.100 US Jurisdiction Interest Rate Subject An amendment to the US jurisdiction interest rate. History/Digest IFTA Full Track Ballot #02-2010 established an interest rate of 2% above the IRS rate. Intent The intent of this ballot is to amend the IFTA Articles of Agreement to minimize the number of interest rate changes from year to year for minor fluctuations in the IRS rate and to make it easier for the carrier to calculate interest on a monthly basis. The ballot would establish a monthly interest rate for the year based on the IRS interest rate from the prior year. Example:

IRS rate IFTA monthly rate 0% - 3% 0.25% or 0.0025 3.1% - 6% 0.5% or 0.005 6.1% - 9% 0.75% or 0.0075 9.1% - 12% 1.0% or 0.01 12.1% - 15% 1.25% or 0.0125 15.1% - 18% 1.5% or 0.015 18.1% - 21% 1.75% or 0.0175 21.1% - 24% 2% or 0.02



Interlining Indicates Deletion; Underlining Indicates Addition ARTICLES OF AGREEMENT 1 R1200 ASSESSMENT AND COLLECTION 2 3 [SECTIONS R1210 AND R1220 REMAIN UNCHANGED] 4 5 *R1230 INTEREST 6 7

The base jurisdiction, for itself and on behalf of the other jurisdictions, shall assess interest on all 8 delinquent taxes due each jurisdiction except taxes collected directly by other jurisdictions in 9 accordance with IFTA Procedures Manual Sections P1000 and P1120.300. 10

11 .100 U.S. Jurisdiction Interest Rate 12

13 For a fleet based in a U.S. jurisdiction, interest shall be set at an annual monthly rate of 14 two (2) percentage points above as specified below, based on the underpayment rate 15 established under Section 6621(a)(2) of the Internal Revenue Code, adjusted on an 16 annual basis on January 1 of each year. Interest shall accrue monthly at 1/12 this annual 17 rate. The Repository shall notify Jurisdictions of the new rate by December 1. 18 (Emphasis added.) 19 20 Interest shall accrue at a rate of one forth of a percent per month if the underpayment rate 21 established under Section 6621(a)(2) of the Internal Revenue Code is equal to or greater 22 than zero percent and equal to or less than three percent. 23 24 Interest shall accrue at a rate of one half of a percent per month if the underpayment rate 25 established under Section 6621(a)(2) of the Internal Revenue Code is greater than three 26 percent and equal to or less than six percent. 27 28 Interest shall accrue at a rate of three forth of a percent per month if the underpayment 29 rate established under Section 6621(a)(2) of the Internal Revenue Code is greater than 30 six percent and equal to or less than nine percent. 31 32 Interest shall accrue at a rate of one percent per month if the underpayment rate 33 established under Section 6621(a)(2) of the Internal Revenue Code is greater than nine 34 percent and equal to or less than twelve percent. 35 36 Interest shall accrue at a rate of one and one forth of a percent per month if the 37 underpayment rate established under Section 6621(a)(2) of the Internal Revenue Code is 38 greater than twelve percent and equal to or less than fifteen percent 39 40 Interest shall accrue at a rate of one and one half of a percent per month if the 41 underpayment rate established under Section 6621(a)(2) of the Internal Revenue Code is 42 greater than fifteen percent and equal to or less than eighteen percent 43 44 Interest shall accrue at a rate of one and three forth of a percent per month if the 45 underpayment rate established under Section 6621(a)(2) of the Internal Revenue Code is 46 greater than eighteen percent and equal to or less than twenty one percent 47 48 Interest shall accrue at a rate of two percent per month if the underpayment rate 49 established under Section 6621(a)(2) of the Internal Revenue Code is greater than twenty 50 one percent and equal to or less than twenty four percent 51

52 [SECTIONS R1230.200 THROUGH R1230.400 REMAIN UNCHANGED53



SUMMARY

41 Comments Support: 4 Oppose: 17 Undecided: 20

ALABAMA

Oppose

ALBERTA

Undecided

The ballot does not affect a Canadian jurisdiction.

ARIZONA

Oppose

Audit Committee

Undecided

The AC has no comment on this ballot.

BRITISH COLUMBIA

Undecided

CALIFORNIA

Oppose

CONNECTICUT

Oppose

We Oppose this ballot. This is consistent with our belief that there are still unanswered constitutional questions associated with IFTA imposing an interest rate.

IDAHO

Support

ILLINOIS

Undecided

IOWA

Oppose



KANSAS

Undecided

Kansas is Undecided; We agree these formulas would make it easier on most carriers to calculate the interest.

MAINE

Oppose

MANITOBA

Undecided

Same comment as Nova Scotia.

MARYLAND

Undecided

MASSACHUSETTS

Oppose

MICHIGAN

Undecided

Still evaluating proposal

MINNESOTA

Oppose

Minnesota stand remains as with the prior interest ballot proposal. We question the legal authority of IFTA imposing an interest rate, interest rates are set by the governing body not the administrative body. In addition the new language is complex and confusing.

MISSOURI

Undecided

Missouri is interested in ABM discussions.

MONTANA

Undecided

Uncertain what variations of the IRS rates will do when assessing audits.

NEBRASKA

Support

If there were a "neutral" category when commenting on ballots - Nebraska's position would be neutral. Although we agree there may be some minor changes in the interest rate from year to year - who cares. Jurisdicictions will have to be able to handle interest rate changes in their IFTA systems whether that rate changes annually or every few years. It is true that this ballot would likely result in less changes -



NEVADA

Support

NEW BRUNSWICK

Undecided

NEW HAMPSHIRE

Oppose

NEW JERSEY

Support

NEW MEXICO

Oppose

NEW YORK

Oppose

New York feels this ballot needs to be amended for clarification and simplification.

NORTH CAROLINA

Oppose

NORTH DAKOTA

Undecided

NOVA SCOTIA

Undecided

This ballot does not apply to Canadian jurisdictions as we are covered under R1230.200.

OHIO

Oppose

ONTARIO

Undecided

As a Canadian jurisdiction, Ontario is not subject to the same interest provisions. However, we have concerns whether the complexity of the language helps to simplify the requirement. We are not quite sure how this will be of benefit to the U.S. jurisdictions.

PENNSYLVANIA

Undecided


Undecided

Agree with Nova Scotia's comment.



QUEBEC

Undecided

Same comment as Nova Scotia.

SASKATCHEWAN

Undecided

SK has no position on this issue

TEXAS

Oppose

UTAH

Oppose

VERMONT

Oppose

VIRGINIA

Undecided

WEST VIRGINIA

Oppose

WYOMING

Undecided





#03-2012 Sponsor IFTA, Inc. Board of Trustees Date Submitted February 1, 2012 Proposed Effective Date Upon Passage Manual Sections to be Amended (January 1996 Version, Eff. July 1, 1998, as revised) IFTA Articles of Agreement R1800 Administration R1810 International Fuel Tax Association, Inc. Subject Establishing the Information Technology Advisory Committee (ITAC) as a Standing Committee History/Digest The ITAC was established as a special committee in 2006 by the International Fuel Tax Association, Inc. (IFTA, Inc.) Board of Trustees (Board). The ITAC was to review information technology solutions proposed by IFTA, Inc. information technology (IT) staff to determine if they meet the needs of the IFTA user community. The purpose of the ITAC is to identify user needs and recommend IT proposals to the Board. The ITAC works to enhance information technology capabilities of the IFTA, Inc. and its stakeholders involved in the administration of the IFTA. Additionally, the ITAC is responsible for serving as a technical source for membership, maintaining a committee member rotation chart, recruiting members and maintaining a list of potential committee members, and making recommendations to the Board to fill committee vacancies. Intent The intent of this ballot is to create the Information Technology Advisory Committee as a standing committee of the International Fuel Tax Agreement.



Interlining Indicates Deletion; Underlining Indicates Addition 1 ARTICLES OF AGREEMENT 2 3 R1800 ADMINISTRATION 4 5 *R1810 INTERNATIONAL FUEL TAX ASSOCIATION, INC. 6 7 [SECTION .100 REMAINS UNCHANGED] 8 9 [SECTIONS .200.010 THROUGH .070 REMAIN UNCHANGED] 10 11

.080 Information Technology Advisory Committee 12 13

There is established an Information Technology Advisory Committee to provide technical 14 guidance as well as recommendations to identify user needs and IT proposals. 15 16 17

[SECTIONS .300, .400 AND .500 REMAIN UNCHANGED] 18 19 20




SUMMARY

42 Comments Support: 40 Oppose: 2 Undecided: 0

ALABAMA

Support

ALBERTA

Support

ARIZONA

Support

Audit Committee

Support

The AC is in Support of this ballot.

BRITISH COLUMBIA

Support

CALIFORNIA

Support

COLORADO

Support

CONNECTICUT

Oppose

We would prefer to see ITAC as a Special Committee with the Clearinghouse Advisory Committee becoming a subcommittee of ITAC.

IDAHO

Support

ILLINOIS

Oppose

IOWA

Support



KANSAS

Support

Kansas Supports this ballot; ITAC will continue to have projects etc. to do with the growing technology changes happening every day to help keep IFTA working toward the future and changes that will need to be made to the agreement etc.

MAINE

Support

The ITAC is a valuable resource. It is logical to make this committee a standing committee.

MANITOBA

Support

MARYLAND

Support

MASSACHUSETTS

Support

MICHIGAN

Support

MINNESOTA

Support

Establishing the Information Technology Advisory Committee as a standing committee makes sense and consistent with the other standing committees.

MISSOURI

Support

MONTANA

Support

NEBRASKA

Support

NEVADA

Support

NEW BRUNSWICK

Support

NEW HAMPSHIRE

Support



NEW JERSEY

Support

NEW MEXICO

Support

NEW YORK

Support

NORTH CAROLINA

Support

NORTH DAKOTA

Support

NOVA SCOTIA

Support

The ITAC is another resource area and should be a standing committee.

OHIO

Support

ONTARIO

Support

Ontario Supports the valuable work of this committee.

PENNSYLVANIA

Support


Support

QUEBEC

Support

SASKATCHEWAN

Support

TEXAS

Support

UTAH

Support

VERMONT

Support



VIRGINIA

Support

WEST VIRGINIA

Support

WYOMING

Support





#4-2012 Sponsor Jurisdiction of Alabama Date Submitted February 14, 2012 Proposed Effective Date January 1, 2013 Manual Sections to be Amended (September 2011 Version, Effective July 1, 1998, as revised) Articles of Agreement R245 - Qualified Motor Vehicle Subject Qualified Motor Vehicle Definition History/Digest Section R245 of the IFTA Articles of Agreement defines a Qualified Motor Vehicle as a motor vehicle used, designed, or maintained for transportation of persons or property and:

Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms; or

Having three or more axles regardless of weight; or Is used in combination, when the weight of such combination exceeds 26,000 pounds or 11,797

kilograms gross vehicle or registered gross vehicle weight. In July 1992, the membership voted to include the Consensus Board Interpretation, Issue 12, as narrative to Section R245 of the IFTA Articles of Agreement. In the Consensus Board Interpretation, the Board agreed that a power unit with two axles, pulling a trailing unit, with a combined gross or registered weight of 26,000 pounds or less is not a qualified motor vehicle. Section .100 and .200 of the definition of a qualified motor vehicle refer only to the power unit. Section .300 of the definition refers to the combination of the power unit and the trailing unit. The Consensus Board Interpretation is that the axles of a trailing unit have no bearing on the Qualified Motor Vehicle definition and that the part of the definition alluding to the number of axles applies only to the axles on the power unit.



Intent The intent of the ballot is to amend Section R245 of the IFTA Articles of Agreement to include the provisions of the Consensus Board Interpretation in the definition of Qualified Motor Vehicle. This change is needed to prevent law enforcement officers from issuing IFTA citations to non-qualified vehicles because the officers are incorrectly including the axles of the trailing unit to determine if the vehicle is IFTA qualified. When questioned regarding the citation, these officers admit that they did not know about the CBI, or they refused to recognize that the CBI was binding. The amended definition will provide necessary clarification to jurisdictions, law enforcement and licensees regarding the IFTA licensing requirements for qualified vehicles. The clarification will result in a reduction of IFTA citations being improperly issued to non-qualified motor vehicles. The clarification will also result in a reduction of licenses/decals issued to non-qualified vehicles which are forced to display IFTA credentials by law enforcement officers who are improperly citing these vehicles.



Interlining Indicates Deletion; Underlining Indicates Addition R245 Qualified Motor Vehicle means a motor vehicle power unit used, designed, or maintained for 1 transportation of persons or property and: 2

3 .100 Having two axles and a gross vehicle weight or registered gross vehicle weight exceeding 4

26,000 pounds or 11,797 kilograms; or 5 6

.200 Having three or more axles regardless of weight; or 7 8

.300 Is used in combination, when the weight of such combination exceeds 26,000 pounds or 9 11,797 kilograms gross vehicle or registered gross vehicle weight. 10

11 Qualified Motor Vehicle does not include recreational vehicles. 12

13

REVISIONS FOLLOWING THE FIRST COMMENT PERIOD

History/Digest: Removed “motor vehicle” and replaced it with “power unit” to clarify the proposed changes.



SUMMARY 42 Comments Support: 11 Oppose: 6 Undecided: 25

ALABAMA

Support

ALBERTA

Undecided

We are not sure whether addition of the words "self propelled" clarifies anything.

ARIZONA

Support

This is the current interpretation in Arizona

Audit Committee

Undecided

The AC Supports the intent of this ballot but is concerned that the insertion of “self-propelled” is in the wrong location. Since a “combination vehicle” is already covered in .300, the AC believes the insertion of “self-propelled” only relates to section .200 and should read, “A self-propelled vehicle having three or more axles regardless of weight; or”

BRITISH COLUMBIA

Undecided

As indicated by others, BC is not sure if this ballot is necessary.

CALIFORNIA

Oppose

CONNECTICUT

Oppose

We are not sure this ballot is necessary. The existing language in concert with the CBI seem to make the definition clear enough.

IDAHO

Support

ILLINOIS

Undecided



IOWA

Undecided

KANSAS

Support

Kansas Supports, our enforcement personnel experience with FMCSA regulations over the years has shown us that having an interpretation on definitions helps. So, for that reason, we see a benefit for enforcement to have a clarification of what a Qualified Motor Vehicle is. Kansas already enforces the rules the way the interpretation is worded so there will be no change in our enforcement practices

MAINE

Undecided

Maine Supports this ballot's intent. It might be better to amend R245.200 by adding "on the power unit."

MANITOBA

Undecided

Not sure if the wording offered clarifies the issue.

MARYLAND

Undecided

MASSACHUSETTS

Undecided

MICHIGAN

Undecided

Still determining benefit.

MINNESOTA

Undecided

Minnesota recommends the addition of power unit for consistency with the IRP definition of a qualified motor vehicle.

MISSOURI

Support

Missouri state statute 301.010 uses the self-propelled language for motor vehicle. Missouri Supports.

MONTANA

Undecided

We are not sure why this change is needed and feel that it will be more confusing and lead to further ballot clarifications.



NEBRASKA

Oppose

Nebraska doesn't quite understand the need for this ballot. IF there is a lot of confusion regarding what is or isn't a qualified vehicle and a clarification is really necessary, we would suggest adding the term " is a power unit " - so that the definition more closely resembles the IRP definition.

While we're at it - has IFTA ever considered exempting government vehicles?

NEVADA

Support

NEW BRUNSWICK

Support

NB Supports this ballot as it is in line with our legislation and our interpretation of a qualified motor vehicle and is consistent with the consensus boards interpretation.

NEW HAMPSHIRE

Undecided

I do not quite understand the intent of this ballot. Is there really a problem with the current definition? I not sur eif there is however, New Hampshire would be open to listening if the consenus is the definition of qualified vehicle needs clarification.

NEW JERSEY

Support

NEW MEXICO

Oppose

NEW YORK

Undecided

New York feels that clarification is needed to reflect the intent of this ballot.

NORTH CAROLINA

Support

NORTH DAKOTA

Oppose

NOVA SCOTIA

Undecided

Nova Scotia is unsure of what this ballot is trying to fix when the Consensus Board Interpretation already provides the clarification on this section.



OHIO

Undecided

ONTARIO

Undecided

Ontario could Support this ballot if it is shown how the wording will benefit the jurisdictions. We are not sure if there is an added value to this area.

PENNSYLVANIA

Undecided


Undecided

Agree with Nova Scotia's comment.

QUEBEC

Undecided

The wording is not clear. We suggest to use the term "Power Unit" as used by IRP.

We ask the same question as Nebraska - has IFTA ever considered exempting government vehicles?

SASKATCHEWAN

Undecided

Not sure this adds value to the definition. SK has always assumed that a vehicle described as a motor vehicle is self propelled. A trailer is simply a vehicle, not a motor vehicle.

Stakeholders

Oppose

Comments from the ATA: Although some jurisdictions may not be in compliance in this area, the rules here are currently clear. The proposed change does not seem to clarify, and may therefore confuse this definition, which is, after all, one of IFTA’s most basic concepts.

TEXAS

Support

UTAH

Undecided

Utah does not understand the need for this ballot

VERMONT

Support



VIRGINIA

Undecided

WEST VIRGINIA

Undecided

WYOMING

Undecided

Proposed Regional Rotation

for Discussion at the Annual IFTA Business Meeting

PROGRAM COMPLIANCE REVIEW PARTICIPATION CHART 2013‐2021The following jurisdictions were assigned with consideration of time‐zones and equality.

TheIFTAProceduresManualP1230states:

2013 ‐ SE 2014 ‐ NE 2015‐MW 2017 ‐ W 2018 ‐ SE 2019 ‐ NE 2020 ‐ MW 2021 ‐ WAB AL AR AZ BC CA CO CT DE FL GA IA ID IL IN KS KY LA MA MB MD ME MI MN MO MS MT NB NC ND NE NH NJ NL NM NS NV NY OH OK ON OR

"Jurisdictionswillberequiredtoparticipateintheirappropriateshareofprogramcompliancereviewseachyear.Nomemberjurisdictionwillberequiredtoparticipateinmorethantwoprogramcompliancereviewsperyear."

No Reviews Scheduled in 2016 2013 ‐ 2021 PCR ROTATION CHART

Page 1 of 2

Proposed Regional Rotation

for Discussion at the Annual IFTA Business Meeting

2013 ‐ SE 2014 ‐ NE 2015‐MW 2017 ‐ W 2018 ‐ SE 2019 ‐ NE 2020 ‐ MW 2021 ‐ W

PA PE QC RI SC SD SK TN TX UT VA VT WA WI WV WY

No Reviews Scheduled in 2016 2013 ‐ 2021 PCR ROTATION CHART

Page 2 of 2



March 22, 2012 Page 1 of 3


#05-2012 Sponsor Jurisdiction of Ontario Date Submitted March 22, 2012 Proposed Effective Date January 1, 2013 Manual Sections to be Amended (January 1996 Version, Effective July 1, 1998, as revised) IFTA Procedures Manual Section P1110 Subject Updating of the IFTA, Inc. Exemption Database History/Digest The IFTA Exemption Database is a central repository for vehicle, fuel and distance related exemptions. The information is primarily used to assist licensees in completing the IFTA tax return and for jurisdictional staff to verify the legitimacy of any claims for non-taxable distances. The database is maintained by IFTA, Inc. but all exemption data is entered by the respective member jurisdictions. One of the objectives contained in the IFTA, Inc. Strategic Plan was to “make the Exemption Database complete and useful”. The IFTA, Inc. Board felt that this objective was needed to address a concern that the database was not being updated and utilized to its full potential. In 2009, a complete review of the Exemption Database was undertaken by the IFTA Agreement Procedures Committee (APC). As a result of this review, which included feedback from IFTA member jurisdictions, the wording and structure of the database were redesigned. The redesigned database was rolled out to the IFTA membership in February 2010. Despite the redesign, the Exemption Database remains under-utilized since many jurisdictions have not entered data into the database or, have not updated the existing data on a regular basis. This lack of reliable information significantly reduces the effectiveness and potential of the database. Where information is not readily available, licensees and jurisdictions are required to contact each affected



jurisdiction to confirm the validity of a particular exemption. Intent The intent of this ballot is to amend the language in P1110 to require member jurisdictions to update the IFTA Exemption Database at the same time the Annual Report is submitted. If a jurisdiction implements an exemption change throughout the year, the jurisdiction would then be required to update the Exemption Database within 30 days of the change being enacted. This will ensure the Exemption Database is kept current and therefor beneficial to IFTA licensees and jurisdictions. Once a jurisdiction’s exemption information has been entered on the database, there is no need to re-enter the exemption information annually – only when exemption information is changed does it need to be entered. If a jurisdiction does not have any change to the Exemption Database, an annual update could be achieved by simply reconfirming the data to indicate that all given details remain correct. By combining such an annual update with an as-needed requirement, the Exemption Database will provide a consistent and reliable source of essential information.



Interlining Indicates Deletion; Underlining Indicates Addition Procedures Manual 1 2 P1110 ANNUAL REPORTING 3 4 .400 Exemption Database 5 6 .005 All jurisdictions which are members under this Agreement shall confirm the 7

Exemption Database is up to date by March 1 of every year. 8 9 .010 In the event of a subsequent change to an exemption after March 1, member 10

jurisdictions are required to update the Exemption Database within 30 days of the 11 enacted change. 12

13




SUMMARY 42 Comments Support: 33 Oppose: 5 Undecided: 4

ALABAMA

Support

ALBERTA

Undecided

ARIZONA

Support

Audit Committee

Support

The AC is in Support of this ballot. Additionally, the AC recommends an archive of prior year exemptions be maintained for the purposes of conducting audits.

BRITISH COLUMBIA

Support

BC would also suggest there be a modification to the IFTA exemption database so that it informs jurisdictions and licencees when a jurisdiction has made a change.

CALIFORNIA

Oppose

COLORADO

Support

CONNECTICUT

Support

We Support the ballot however we do have a question for the authors. How would the program compliance review teams propose to enforce this requirement if passed?

IDAHO

Support

ILLINOIS

Support



IOWA

Support

The current data may not be reliable because mandatory reporting is not required. It is better to direct the carriers to IFTA website instead of multiple states for the information.

KANSAS

Support

Exemption data is very important and needs to be kept up to date for both the carrier and the jurisdictions. Audit needs accurate data in order to complete audits on behalf of fellow jurisdictions.

MAINE

Support

MANITOBA

Support

MARYLAND

Support

MASSACHUSETTS

Support

MICHIGAN

Support

MINNESOTA

Support

Minnesota agrees it is important for a properly completed tax return to have the data current and readily available. It may be helpful to have a summary page that lists the exemptions for all jurisdictions rather than querying several documents in determining the exemptions when completing the IFTA tax return.

MISSOURI

Support

Missouri Supports and also apologizes to the members as its exemption database has had incorrect information published and has not been updated to reflect the proper information.

MONTANA

Support

NEBRASKA

Support



NEVADA

Support

NEW BRUNSWICK

Support

NEW HAMPSHIRE

Oppose

NEW JERSEY

Support

NEW MEXICO

Oppose

NEW YORK

Undecided

NORTH CAROLINA

Support

NORTH DAKOTA

Undecided

NOVA SCOTIA

Support

OHIO

Support

ONTARIO

Support

The database is currently being under utilized despite being redesigned in 2010 based on membership feedback. Ontario believes by making the update a mandatory requirement, it will allow for greater reliance on the database by providing reliable and relevant information in one central location, the IFTA, Inc. website.

PENNSYLVANIA

Undecided


Support

QUEBEC

Support

If updated regularly, the exemptions database will be more helpful.



SASKATCHEWAN

Support

Good idea.

TEXAS

Support

UTAH

Oppose

VERMONT

Oppose

VIRGINIA

Support

WEST VIRGINIA

Support

WYOMING

Support


IFTA Short Track Preliminary Ballot Proposal #6-2012

May 8, 2012 Page 1 of 5

IFTA SHORT TRACK PRELIMINARY BALLOT PROPOSAL

STPBP #6-2012 Sponsor Jurisdiction of Illinois Date Submitted May 8, 2012 Proposed Effective Date July 1, 2013 Manual Sections to be Amended (Effective July 1, 1998 Last Revised September 2011)

R1520 R1650.200 R155.300.020 R1650.300 R1555.400.015 R1650.400 R1555.400.020 R1655 R1610.200 R1720.100 R1620.100 R1810.300 R1620.200 R1820.100 R1635

Subject Throughout the Articles of Agreement, fifteen sections require a vote of the IFTA community to amend the Agreement or to effect change within the IFTA community. Within these fifteen sections, there are three different approval methods to count a ballot:

1. simple majority 2. 2/3 of the votes cast 3. 3/4 of the total membership

Additionally, jurisdictions not voting are considered: a “no” vote, or; a “yes” vote

depending on the issue subject to the voting process. (See attached)


May 8, 2012 Page 2 of 5

History/Digest The Agreement is inconsistent in its application of voting rules. Voting requires either a majority vote, a two-thirds vote of votes cast, or a three-fourths vote of the membership for passage. In one instance, not submitting a vote is considered a “no”, while in another instance, not submitting a vote is a “yes”. (See attached) Jurisdictions that do not vote or abstain from voting impede the amendment process. Jurisdictions that do not exercise their right to vote should be considered to have ceded their interests to those jurisdictions who have voted. Intent The intent of this ballot proposal is to provide consistency throughout the voting process. We suggest a consistent, three-fourths of the total member jurisdictions casting votes be required for passage.


May 8, 2012 Page 3 of 5

Interlining Indicates Deletion; Underlining Indicates Addition 1 2 ARTICLE XV – R1500 MEMBERSHIP 3 4 R1520 APPROVAL OF ADOPTING RESOLUTION 5 6 Ballots shall be mailed by the repository to all member jurisdictions via certified mail, return 7 receipt requested. Entry shall be granted to the applicant unless more than one negative 8 vote is received. Failure of a jurisdiction to submit its vote on the ballot within 120 days of 9 receipt shall not be considered a vote for approval of the application in the disposition of the ballot. 10 11 *R1555 COMPLIANCE MATTERS 12 13 [Sections R1555.100 and .200 Remain Unchanged] 14

15 .300 Initiation of a Dispute Based on a Final Determination Finding of Non-Compliance 16

17 .020 An affirmative vote in writing of at least two-thirds three-fourths of the total written 18

votes cast is required to initiate a dispute based on a Final Determination Finding of 19 Non-Compliance. 20

21 .400 Expulsion Process 22

23 .015 A resolution expelling a member jurisdiction from the Agreement shall require the 24 affirmative vote in writing of three-fourths of the total member jurisdictions votes cast, 25

excluding the jurisdiction which is the subject of the resolution. 26 27 .020 Member jurisdictions will have sixty (60) days from the date of issuance of the 28 Resolution to vote on the resolution of expulsion. Failure of a member jurisdiction to 29 submit its vote shall not be deemed a vote against the resolution of expulsion 30

considered in the expulsion process. 31 32 ARTICLE XVI – R1600 AMENDMENTS 33 34 R1610 SUBMISSION OF PROPOSALS WITHOUT PRELIMINARY COMMENT 35 36 [Section R1610.100 Remains Unchanged] 37 38 A proposed amendment may also be submitted to the repository for consideration as a 39 Short Track Preliminary Ballot Proposal ("Short Track" Proposal). The preliminary comment period 40 requirement may be waived if: 41

42 .200 At the next meeting of the member jurisdictions, the proposed amendment receives the 43

affirmative vote of at least three-fourths of the total member jurisdictions of the 44 Agreement votes cast. 45

46 47


May 8, 2012 Page 4 of 5

R1620 "SHORT TRACK" VOTING 48 49

.100 In the open meeting, the sponsor may request the member jurisdictions to vote for or 50 against placing a Full Track proposal on the Short Track ballot process described in 51 IFTA Articles of Agreement Section R1625. An affirmative vote of at least three-fourths 52 of the total member jurisdictions votes cast is required to place a ballot on the Short 53 Track ballot process. 54

55 .200 In the open meeting, a vote must be made by the member jurisdictions for or against 56

continuing each Short Track proposal on the Short Track ballot process described in 57 IFTA Articles of Agreement Section R1625. An affirmative vote of at least three-fourths 58 of the total member jurisdictions votes cast is required for continuation of a ballot on 59 the Short Track ballot process. 60

61 R1650 ACCEPTANCE OF AMENDMENTS 62 63 [Section R1650.100 Remains Unchanged] 64 65

.200 An affirmative vote in writing of three-fourths of the total member jurisdictions votes 66 cast is required to amend the Agreement, Procedures Manual, or Audit Manual. For 67 purposes of this section, a vote submitted electronically through a mechanism provided 68 by the International Fuel Tax Association, Inc. is deemed a vote in writing. 69

70 .300 Jurisdictions may abstain from voting, but a final ballot proposal may still not be 71

adopted without the affirmative vote of three-fourths of the total member 72 jurisdictions votes cast. 73 74 .400 Jurisdictions that do not vote on an amendment within the required time limits are shall 75

not be considered to have voted in the negative, except as provided in IFTA Articles of 76 Agreement Section R1655 in the disposition of the ballot. 77

78 79 *R1655 EFFECTIVE DATE OF AMENDMENTS 80

81 The effective date of all amendments, unless otherwise specified, is the first day of 82 January or July, whichever occurs first, following the completion of 12 complete months 83 following the close of the voting period. An alternate effective date may be allowed if it 84 receives the support of three-fourths of the total member jurisdictions votes cast. If an alternate 85 effective date is requested, it must be voted separately from the amendment. 86 Jurisdictions that do not vote on an alternate effective date within the required time limits are 87 considered to have voted in the negative. 88 89

ARTICLE XVII – R1700 ISSUE PAPERS AND CONSENSUS BOARD INTERPRETATIONS 90 91 *R1720 CONSENSUS BOARD INTERPRETATIONS 92

93 .100 The Board of Trustees of the Association shall issue Consensus Board 94

Interpretations in response to requests for clarification or notify the requesting party 95 why a Consensus Board Interpretation will not be issued. Consensus Board 96


May 8, 2012 Page 5 of 5

Interpretations will be presented for consideration at the annual business meeting and 97 require an affirmative vote of three-fourths of the member jurisdictions votes cast for 98 ratification and inclusion as commentary in the IFTA governing documents. 99

100 [Sections R1720.200 and .300 Remain Unchanged] 101

102 ARTICLE XVIII – R1800 ADMINISTRATION 103 104 *R1810 INTERNATIONAL FUEL TAX ASSOCIATION, INC. 105 106 [Sections R1810.100, .200, .400 and .500 Remain Unchanged] 107 108 There is established the International Fuel Tax Association, Inc. (hereinafter referred to as "the 109 Association") which is responsible for administering the Agreement. Entry into the Agreement constitutes 110 membership in the Association. 111 112

.300 Membership Fees 113 114 To cover administrative costs, a membership fee shall be levied on every member 115 jurisdiction. The fee shall be paid annually and be based upon a budget adopted by 116 majority vote three-fourths of the votes cast at the annual IFTA meeting. The fee shall be 117 equally prorated among current members. 118 119 The fees will be based upon a fiscal year of July 1 through June 30. 120

121 *R1820 REPOSITORY 122

123 .100 Selection 124 125

A repository shall be selected by majority vote three-fourths of the member jurisdictions 126 votes cast. 127

128 [Section R1820.200 Remains Unchanged] 129

IFTA Program Compliance Review Guide I. Introduction

Page 1 Revised and Ratified July 2005 Revised and Ratified July 2006

Revised and Ratified August 2011

I. INTRODUCTION A. GENERAL INFORMATION

1. This IFTA Program Compliance Guide has been prepared to assist in the conduct of a Program Compliance Review (Review). Such a Review offers a detailed analysis of a member jurisdiction's IFTA audit and administrative operations. The purpose of an IFTA Review is to ensure that a member jurisdiction is meeting its obligations under the IFTA.

2. Currently, the following documents govern a member jurisdiction's IFTA program:

a. the IFTA Articles of Agreement; b. the IFTA Procedures Manual; and c. the IFTA Audit Manual.

3. Pursuant to the IFTA Procedures Manual, Section P1210, “[m]ember jurisdictions shall

permit periodic program compliance reviews to be performed to assure they are in compliance with the provisions of the Agreement.” The IFTA Procedures Manual, Section P1220, provides, in part: “[p]rogram compliance reviews shall be conducted in accordance with the procedures and specifications outlined in the IFTA Program Compliance Review Guide, . . . .” Therefore, knowledge of the contents of the Review Guide is essential prior to participating in a Review as a member of a Review Team.

4. The Review has been designed to allow a Team to complete a review of several matters

prior to the scheduled dates of the Review. The Administrator will make a request for information prior to the scheduled dates of the Review. Failure of a jurisdiction to timely respond to the request may cause a delay in the Review process. The jurisdiction will find that its Review will be less intrusive and of greater benefit if it meets its responsibilities.

5. The Program Director will be responsible for establishing and maintaining a pool of

qualified individuals who will conduct Reviews. The pool will consist of both audit and administrative representatives from member jurisdictions. Committee members may be in the pool, but shall not review any Reports of the Reviews in which they participate.

6. Both an opening and closing conference will be held with the jurisdiction. The purpose of

the opening conference is to discuss the review with the jurisdiction. The purpose of the closing conference is to present findings of the Review to the jurisdiction.

7. Following the completion of a Review, a draft Report will be prepared by the

Administrator, based on the findings of the Team, and will be presented to the jurisdiction for response. Once the response is received, it will be incorporated into the draft Report and presented to the Committee for processing as required in this Guide.

8. This Guide also provides information regarding Findings of Non-Compliance, Follow-up

and Reassessment procedures for such Findings by the Committee and the Program Director.

IFTA Program Compliance Review Guide I. Introduction

Page 2 Revised and Ratified July 2005 Revised and Ratified July 2006


9. The Review Teams will utilize review Worksheets (see attachments A –P) to ensure that a Review covers all required topics and that jurisdictions are reviewed in a consistent manner.

B. PROGRAM COMPLIANCE REVIEW SCHEDULING

The Program Director will schedule the Reviews on a regional basis based on a five-year cycle.

IFTA Program Compliance Review Guide II. Procedures for Conducting Program Compliance Reviews

Page 3 Revised and Ratified July 2005 Revised and Ratified April 2006


II. PROCEDURES FOR CONDUCTING PROGRAM COMPLIANCE REVIEWS A. TERMS

The following terms will be used throughout these procedures:

1. Administrator: A Program Compliance Administrator employed by IFTA, Inc. 2. Board: Board of Trustees of IFTA, Inc. 3. Committee: The Program Compliance Review Committee of IFTA. 4. Dispute Resolution Committee: Dispute Resolution Committee of IFTA. 5. Follow-up: The process of obtaining verification of compliance from a

jurisdiction. 6. IFTA Governing Documents: The IFTA Articles of Agreement, Procedures Manual

and Audit Manual. 7. Panel: Members of the Program Compliance Review Committee

assigned to a particular Review. 8. Program Director: A Program Director employed by IFTA, Inc. 9. Reassessment: Reassessment and reexamination of a jurisdiction to ensure

compliance following a Finding of Non-Compliance in a Program Compliance Review.

10. Reassessment Plan: The plan developed by the Committee members not serving on

the Panel and the Program Director, with review by a jurisdiction, to bring the jurisdiction into compliance with the IFTA. Such plan will include the methods of cure of non-compliance as well as the time frame established for compliance.

11. Report: The Program Compliance Review Report. 12. Review: The Program Compliance Review which may be conducted

either on-site or remotely. 13. Subject: The member jurisdiction which is the subject of the Program

Compliance Review. 14. Team: The Program Compliance Review Team.




B. REVIEW TOPICS AND WORKSHEETS

A jurisdiction’s Review will be completed on the following topics:

1. Worksheet A LICENSE APPLICATION CONTENTS 2. Worksheet B LICENSE CONTENT AND DESIGN 3. Worksheet C DECAL CONTENT AND DESIGN 4. Worksheet D LICENSE APPLICATION AND CREDENTIAL PROCESSING 5. Worksheet E TEMPORARY DECAL PERMITS 6. Worksheet F INFORMATION PROVIDED TO IFTA LICENSEES 7. Worksheet G BONDING PROCEDURES 8. Worksheet H LICENSE SUSPENSION, REVOCATION, CANCELLATION AND

REINSTATEMENT PROCEDURES 9. Worksheet I TAX REPORT FORM CONTENT AND PROCESSING 10. Worksheet J BASE JURISDICTION ACCOUNTING 11. Worksheet K AUDITORS 12. Worksheet L JURISDICTION AUDIT ACCOUNTABILITY 13. Worksheet M AUDIT PROCEDURES 14. Worksheet N ASSESSMENT PROCEDURES 15. Worksheet O APPEALS PROCESS 16. Worksheet P RESPONSIBILITIES IN BANKRUPTCY PROCEEDINGS

C. SCHEDULING OF PROGRAM COMPLIANCE REVIEWS

1. It is the responsibility of the Program Director to ensure that the required Reviews are scheduled.

2. The Program Director will ensure that the IFTA Commissioners of the Subjects will be

contacted to request preferred dates for a Review. 3. Once the dates of the Reviews are determined, the Program Director will ensure that a

Team is selected to conduct the Review. The Team will consist of an auditor and an administrator in addition to the Lead Reviewer from IFTA, Inc. whenever possible.

4. The Program Director will contact the Team to determine their availability to participate. 5. Once the Team is confirmed, the Program Director will ensure that the IFTA

Commissioner of the Subject has been contacted to confirm the scheduling of the Review and announce the Team.

6. If a change to the scheduling is necessary, the Subject should contact the Program

Director at the earliest possible time. The Review dates will be changed only if the Administrator and the Team are available on the requested Review dates.

7. When necessary and appropriate, the Administrator designee will provide all Team

members with travel information required to conduct the Reviews. 8. When necessary and appropriate, the Subject will provide the Administrator information

regarding hotel accommodations, at least ninety (90) days prior to the Review date. The




Administrator will secure hotel accommodations for the Team and provide the selected hotel information to the Team members.

D. PRELIMINARY REVIEW

1. Approximately 120 days prior to the scheduled Review dates, the Administrator will contact the Subject requesting information in order to conduct the Preliminary Review. A copy of the correspondence will be sent to the Team. The correspondence will contain a date by which the Subject must provide the information to the Administrator.

2. Upon receipt of the information from the Subject, the Administrator will select a sample of

licensee files and a sample of audits, which will be the basis for the Review. The Administrator will inform the Subject of the samples.

3. Upon receipt of the information from the Subject, the Team should be able to complete a

preliminary review. 4. If during the Preliminary Review the Administrator determines that additional information

is necessary, the Administrator will contact the Subject to obtain such information. 5. Following the Preliminary Review, the Administrator will prepare a draft Report. The

Administrator will present this report at the opening conference. E. OPENING CONFERENCE

1. An opening conference will be held by the Team with the Subject.

2. The Administrator should conduct the opening conference by making appropriate introductions of the Team and asking the Subject's representatives to introduce themselves and to describe their work functions as related to the Subject's IFTA program.

3. Once introductions are completed, the Administrator will explain the Review process that

will occur during the Review, soliciting the Subject's representatives to ask any questions they may have concerning the process.

4. The Administrator should give the Subject the opportunity during the Review to provide

any additional information that may be important to the Review.

5. At this time, the representatives should give the Team an explanation of their IFTA processes. This may include application, return and audit processing

6. At this point, the Administrator will determine how the Team will proceed and divide the

Review tasks accordingly.

.




F. REVIEW

Worksheets (A – P), in the format of check lists are provided to ensure uniformity in the Review process. The Team should complete the applicable worksheet for each topic as the particular Review process is taking place. The Worksheets are lettered and page numbered in accordance with the letter shown with the topic. Any areas of non-compliance or concern should be noted on the comment sheet attached to the applicable Worksheet.

G. CLOSING CONFERENCE

1. Following completion of the Review, the Administrator will request a closing conference with the representatives of the Subject's choice.

2. At the closing conference, the Administrator will discuss the preliminary findings of the

draft Report. The focus of such discussion should be on any areas of non-compliance or any questions of compliance that were found during the Review. The Team may provide suggestions for both administrative and audit programs.

3. The Administrator will remind the Subject's representatives that responses to the

citations in the draft Report will be due to IFTA, Inc. within thirty (30) days of the closing conference.

4. Questions should be solicited from the Subject representatives to ensure no issues are

outstanding following the Review.

IFTA Program Compliance Review Guide III. Report And Reassessment And Follow-Up Procedures



III. REPORT, REASSESSMENT AND FOLLOW UP PROCEDURES A. REPORT PROCESS

1. All reports, worksheets, and comment sheets, along with all documents which were obtained from the Subject for review and copies of all correspondence relating to the Review, are used by the Administrator for compilation of the Report of the Team. The Administrator will create and maintain a file of the Review of the Subject. This will become the permanent file of the Subject's Review which will be housed at the offices of IFTA, Inc.

2. The Administrator must prepare the Report based on the Team findings and provide it to

the Subject at the closing conference. 3. The Subject must review the Report and submit written responses, if any, to the

Administrator within approximately thirty (30) days of receipt. 4. The Administrator will compile the responses into the Report and submit it to the Director

within approximately five (5) days of receipt. The Program Director will forward the Report to the Panel. The Report to the Panel will include all information the Administrator and Program Director deems necessary for the Panel to complete its review. The Panel may contact the Program Director for additional information if it deems necessary.

5. The Panel will review the Report and issue their findings of compliance or non-

compliance to the Chair of the Committee. 6. If the Panel makes a Finding of Non-Compliance based on its review, within fifteen (15)

days of receipt, a written Finding will be drafted by the Panel, and such finding, along with a written recommendation for Reassessment and/or Follow Up, if deemed necessary by the Panel, will be sent to the Chair.

7. The Chair will forward the Finding to the Director within fifteen (15) days of receipt. 8. IFTA, Inc. will post all Final Reports on its secure web site for review by the IFTA

Commissioners after completion of all follow-up and reassessment processes. B. REASSESSMENT AND FOLLOW UP PROCESS 1. FOLLOW UP

a. If the findings of the Panel include a recommendation for Follow Up, the Committee chair and vice chair will make a determination on the Follow Up recommendation.

b. Once all recommendations have been reviewed and the Committee chair has

determined that Follow Up is required, the Program Director will contact the Subject, in writing, requesting that the Subject submit documentation of compliance within thirty (30) days.




c. Upon receipt of the Follow Up documentation from the Subject, the Committee will review it. If the documentation proves that the Subject is now in compliance, the chair shall direct the Program Director to issue the Final Report.

d. If the Committee determines that the documentation does not prove compliance

or if the Subject fails to provide the required documentation, the Committee will proceed with the Reassessment Process.

2. REASSESSMENT

a. If the findings of the Panel include a recommendation for Reassessment, or if after a follow-up the Subject is determined not to be in compliance, the recommendation is forwarded to the Chair and Vice Chair of the Committee. In order for the Reassessment to go forward, a majority of the five (the three Panel members, the Chair and the Vice Chair) must agree with the recommendation. Either the Chair or the Vice Chair must be part of the majority.

b. If the Reassessment goes forward, the Chair, the Vice Chair and the Committee

members not serving on the Panel and the Director will develop a Reassessment plan and timeline. The date of compliance will depend entirely upon the area of non-compliance found.

c. The Program Director will contact the Subject and provide the Reassessment

plan and timeline.

d. If the Subject requests some modification to the timeline, and the Program Director approves of the modification, the Program Director will notify the Chair that the timeline has been modified. When the Reassessment Plan has been approved by the Subject as indicated by the signature of its IFTA Commissioner, it will be returned to the Program Director. It will be the responsibility of the Program Director to track the Reassessment to ensure that the Subject's Reassessment Plan and timeline are followed. The Committee has discretion to require periodic reports and updates from the Subject to ensure the Reassessment Plan is being followed.

e. Upon bringing its program into compliance, the IFTA Commissioner of the

Subject will verify compliance in writing to the Program Director. The verification will be forwarded to the Committee chair by the Program Director. The verification will be included in the Subject's file at the offices of IFTA, Inc. and the verification will be disseminated to all member jurisdictions as proof of compliance.

f. If the Subject fails to bring its program into compliance as required by the

Reassessment Plan, the Program Director will notify the Committee chair.

g. Based on the notification of non-compliance, two-thirds of the full Committee must determine whether to make a Final Determination Finding of Non-Compliance.




h. If a Final Determination Finding of Non-Compliance is issued, it will be forwarded by the Program Director to the Subject in care of its IFTA Commissioner and to the head of the Subject agency through which the fuel use taxes are collected pursuant to the IFTA, and to the Governor or Premier of the Subject.

i. Following the issuance of a Final Determination Finding of Non-Compliance

pursuant to Section R1555 of the IFTA Articles of Agreement, the Committee will refer the matter to the IFTA membership. If such finding is ratified by the IFTA membership, the Final Determination Finding of Non-Compliance will then be forwarded to the Subject in care of its IFTA Commissioner, the head of the Subject agency through which the fuel use taxes are collected pursuant to the IFTA, and the Governor or Premier of the Subject.

lturner

Highlight

IFTA Program Compliance Review Guide Attachments

Worksheets A - P

JURISDICTION: DATE:

A. IFTA LICENSE APPLICATION CONTENTS

Worksheet A Revised March 2011

Page 1

Determine that the information requested on the initial license application meets the requirements found in the IFTA governing documents. CITE The jurisdiction's IFTA license application form contains the following information: R315

Federal Employer Identification number (or in the case of a sole proprietorship, the Social Security number) for

US- based applicant. The unique identifier required to create an account number for a Canadian-based applicant P105, P200P210, P220 P230, P240

Owner's, partner's or corporate name P110 Legal business name P115 Physical location of the business P120 Mailing address of the business P125 Signature or electronic submission compliant with R940.300 and P160 and date P130 Number of IFTA decals required by licensee P135 Application fee (if applicable) R355, P140

Decal fee (if applicable) R355, P145P320.300

Statement of existence of bulk storage in all member jurisdictions P155 Statement that applicant agrees to comply with reporting, payment, recordkeeping, and license display P160

JURISDICTION: DATE:

A. IFTA LICENSE APPLICATION CONTENTS

Worksheet A Revised March 2011

Page 2

requirements as specified in the International Fuel Tax Agreement. Statement that applicant agrees that base jurisdiction may withhold any refunds due if the applicant is delinquent

on payment of fuel taxes due any member jurisdiction. R1130

P160 Statement that applicant certifies with his or her signature that, to the best of his or her knowledge, the

information is true, accurate, and complete and any falsification subjects him or her to appropriate civil and/or criminal sanction of the base jurisdiction (e.g. perjury)

P160

JURISDICTION: DATE:

B. IFTA LICENSE CONTENT AND DESIGN

Worksheet B Revised March 2011

Determine that the form and content of the license meet the requirements found in the IFTA governing documents. CITE License is approximately 3-1/2 x 8-1/2 inches (9 x 21.5 centimeters) P310

License contains base jurisdiction identification P310.100

License contains licensee's name and address and DBA, if different from owner, partner or corporate name P310.200

R320 License contains licensee's account identification number P310.300 License contains expiration date (month, day and year) P310.400 Licenses are valid for a calendar year R610

JURISDICTION: DATE:

C. DECAL CONTENT AND DESIGN

Worksheet C Revised March 2011

Determine that the form and content of the decals meet the requirements found in the IFTA governing documents. CITE The jurisdiction's IFTA decals meet the following requirements:

Approximately 3 inches high and 3 inches wide (7.5 centimeters high and 7.5 centimeters wide) P320.100 White letters P320.100 Letters "IFTA" a minimum of 3/4-inch (1.88 centimeters) P320.100 Letter I in the upper left-hand corner P320.100 Letter A in the lower right-hand corner P320.100 Letters F and T constitute a diagonal design on the decal P320.100 Two-letter jurisdiction designation in the lower left-hand corner P320.100 Last two numbers of the appropriate year in upper right-hand corner (Four numbers are allowed.) P320.100

Decals are serialized P320.100 The serial number of each decal shall be no less than 3/16” high (0.47625 centimeters) and shall be displayed

between the two-letter jurisdiction designation and the letter “A” of “IFTA”. P320.100

Does not contain vehicle specific data R615 Jurisdiction utilized IFTA, Inc. standards when ordering decals P320.200 Decals are to have a white border 1/8 inch thick P320.200 Background color as specified for the current year

Color: _____________________ P320.200

JURISDICTION: DATE:

D. LICENSE APPLICATION AND CREDENTIAL PROCESSING

Worksheet D Revised March 2011

Determine that such procedures, including the application review process, meet the requirements found in the IFTA governing documents. Determine that the jurisdiction issues credentials as required by the IFTA governing documents. Determine that the jurisdiction has a renewal process in place. Determine whether the jurisdiction accepts as licensees applicants from non-member jurisdictions. If so, determine that such applicants meet the requirements found in the IFTA governing documents. Determine whether the jurisdiction accepts consolidated fleets. If so, determine that the proper approval was given and received. CITE Jurisdiction determines whether a prospective licensee has been previously licensed under the IFTA R335 Jurisdiction determines whether a previously license is still under revocation by any member jurisdiction R335 Jurisdiction determines whether the application contains any misrepresentation, misstatement, or omission of

information required in the application R335

Upon being satisfied that the application is correct, the jurisdiction issues the fuel tax credentials for the fleet R330 Jurisdiction issues one license to each licensee R605, R620 Jurisdiction issues two decals for each qualified motor vehicle operated by each licensee R605, R625 Jurisdiction renews IFTA licenses each year R345.100

Jurisdiction requires that license is active, all returns have been filed and all taxes, penalties and interest have been paid prior to renewing a license

R345.100

Jurisdiction may deny or cancel a carrier’s license if the carrier is reporting zero miles or base jurisdiction distance

only consecutively for three (3) quarters or more. R345.300

JURISDICTION: DATE:

E. TEMPORARY IFTA DECAL PERMITS

Worksheet E Revised March 2011

Determine whether the jurisdiction has elected to issue temporary decal permits. If so, determine that such temporary permits meet the requirements found in the IFTA governing documents. CITE

Temporary decal permit issued by jurisdiction is vehicle specific R650 IFTA temporary permit issued by jurisdiction contains expiration date R650 IFTA temporary permit issued by jurisdiction expires in 30 days R650

JURISDICTION: DATE:

F. INFORMATION PROVIDED TO LICENSEES

Worksheet F Revised March 2011

Determine that the jurisdiction provides information to its IFTA licensees as required by the IFTA governing documents. CITE Details on the explanation of base jurisdiction determination R360.500

Licensing requirements R360.200 Tax reporting requirements R360.300 Record requirements R360.300 License cancellation provisions R360.200 Audit information R360.400 Instructions for display of tax license and identification decals R360.100 Jurisdiction updates information provided to licensees as Agreement or Procedures are modified R360

NOTE: The information provided to licensees may, according to the Articles of Agreement, be more inclusive. The above is the required information. List below any additional information provided by the jurisdiction to an IFTA licensee: * * * * *

JURISDICTION: DATE:

G. BONDING PROCEDURES

Worksheet G Revised March 2011

Page 1

Determine whether the jurisdiction has elected to require bonds. If so, determine that the jurisdiction's bonding procedures meet the requirements found in the IFTA governing documents. CITE Jurisdiction requires posting of bonds for the following causes:

A licensee has failed to file timely returns A licensee has not remitted tax An audit indicates problems severe enough that in the commissioner's discretion, a bond is required to protect the interests of the member jurisdictions

R340

License reinstatement following revocation R430.100 Jurisdiction requires bonds in the equivalent of at least twice the estimated average tax liability for the reporting

period for which the licensee will be required to file a tax return P410

Jurisdiction allows the following types of securities to be filed by a licensee: Surety bond P420 Bonds or other obligations of the United States or Canada, bonds or other obligations of the base

jurisdiction, or any county, or city and county of the base jurisdiction, having a market value not less than the amount of the bond required and made payable to the base jurisdiction.

P430.100

Automatically renewable time certificates of deposit not exceeding the insured amount, issued by a bank

doing business in the base jurisdiction and insured by the Federal Deposit Insurance Corporation or the Canadian Deposit Insurance Corporation, made in the name of the depositor, payable to the base jurisdiction, and containing the provision that interest earned shall be payable to the depositor and can only be canceled by written authorization from the base jurisdiction.

P430.200

Worksheet G Revised March 2011

Page 2

Investment certificates or share accounts not exceeding the federally insured amount, issued by a

savings and loan association doing business in the base jurisdiction, and insured by the Federal Savings and Loan Insurance Corporation. Evidence of the insured account, either certificate or passbook, must be delivered to the base jurisdiction, along with a properly executed assignment form whereby the funds on deposit are assigned and made payable to the base jurisdiction.

P430.300

Lawful money of the United States or Canada. Cash bonds must be submitted in the form of a cashier's

check, money order, or other certified funds which are payable to the base jurisdiction. P430.400

Any other secure obligations deemed appropriate by the base jurisdiction to cover the projected liabilities

for all member jurisdictions. P430.500

JURISDICTION: DATE:

H. LICENSE SUSPENSION, REVOCATION, CANCELLATION

AND REINSTATEMENT PROCEDURES

Worksheet H Revised March 2011

Determine that the jurisdiction has procedures in place for license status changes as required by the IFTA governing documents. CITE Jurisdictional laws provide for license cancellation R410.200

Jurisdictional laws provide for license suspension and/or revocation R420.200 Upon failure to pay or appeal an assessment, the jurisdiction will issue a notice of immediate revocation in

accordance with the base jurisdiction’s statutes for such notices to an IFTA licensee R1270

JURISDICTION: DATE:

I. TAX RETURN FORM CONTENT AND PROCESSING

Worksheet I Revised March 2011

Page 1

Determine the following as required or allowed by the IFTA:

a. that the jurisdiction requires all IFTA licensees to file a quarterly tax report even if no operations were conducted during the reporting period; that the jurisdiction furnishes, at no charge to its licensees, the appropriate tax reporting forms at least 30 days prior to the due date of the reports and that the jurisdiction has provided the correct tax rates to its licensees for all quarters in the review period;

b. that the jurisdiction appropriately determines the timeliness of the tax reports filed by its licensees by the postmark date;

c. that the jurisdiction uses a standard tax report;

d. that the jurisdiction has elected to authorize licensees to submit computer-generated tax reports or written tax reports;

e. that the jurisdiction requires licensees to report all fuel placed in the fuel supply tank of a qualified motor vehicle as taxable on

the IFTA tax report;

f. that the jurisdiction correctly applies tax-paid gallons for each member jurisdiction;

g. that the jurisdiction correctly calculates interest on tax due;

h. that the jurisdiction correctly calculates penalty on tax due;

i. whether the jurisdiction allows for the filing of annual reports if licensees meet the filing requirements and request such filing; and

j. that the base jurisdiction requires licensees to maintain records to substantiate information reported on the quarterly tax

report and requires such records to be maintained for the required retention period. CITE Jurisdiction requires all IFTA licensees to file a quarterly tax return even if no operations were conducted during

the reporting period R930.100

Jurisdiction furnishes, at no charge to the licensees, the appropriate tax return forms at least 30 days prior to the

due date of the returns R940.100


Page 2

Jurisdiction tax returns contain the correct fuel tax rates for all member jurisdictions for all quarters in the review

period R940.100

P730 Jurisdiction appropriately determines timeliness of tax return and remittance filed by postmark date R960.100

The jurisdiction uses a standard tax return that contains at least, the following elements R950P720

Name and mailing address of the jurisdiction issuing the return P720.050 A space for the IFTA license number of the licensee P720.100 A space for the name and address of the licensee P720.150 A space for the reporting quarter of the return P720.200 A space for the total distance traveled in all jurisdictions during the reporting period, including operations

with trip permit P720.250

A space for total fuel consumed in all jurisdictions during the reporting period P720.300 A space for the average fuel consumption factor (to two decimal places) for the reporting period] P720.350 A space for the fuel type being reported for the reporting period P720.400 Columns for the jurisdictions in the Agreement P720.450 Columns for reporting for each jurisdiction in order with rounding provided to the nearest whole unit: P720.500 Tax rate P720.500.010 Total miles or kilometers P720.500.015 Total taxable miles or kilometers P720.500.020 Taxable gallons or liters P720.500.025


Page 3

Tax paid gallons or liters P720.500.030 Net taxable gallons or liters P720.500.035 Tax due P720.500.040 Interest due P720.500.045 Total due P720.500.050 Totals for the columns that are listed above with the exception of Tax Rates and Interest P720.550 A space for penalty or late filings fees ($50.00 or 10 percent of the tax, whichever is greater) P720.600 A space for the total remittance of the return P720.650 A space for the date of the submitted return P720.700 A space for a signature of the person filing the licensee's return P720.750 A space for the title of the person filing the licensee's return P720.800 A space for the telephone number of the person filing the licensee's return P720.850 The jurisdiction allows a licensee to submit a written return setting forth all information required which will be

accepted in lieu of a return on the tax return form R940.200

The jurisdiction requires licensees to report all fuel placed in the fuel supply tank of a qualified motor vehicle as

taxable on the IFTA tax return R820

The jurisdiction correctly applies tax-paid gallons for each member jurisdiction R1120.200

P1070 Jurisdiction calculates interest on tax due for each jurisdiction when a tax return is not filed in a timely manner R1230 Jurisdiction requires IFTA licensees to maintain supporting records for prescribed retention period. P510.100 Tax return or tax return instructions contain the US/CND conversion rates P730

JURISDICTION: DATE:

J.1. BASE JURISDICTION ACCOUNTING - GENERAL

Worksheet J.1 Revised March 2011

Page 1

Determine the following as required by the IFTA:

a. that the base jurisdiction's records of IFTA licensee accounts contain the information required and meet the retention period;

b. that the jurisdiction's transmittal of funds is timely and that the fund transmittal includes a remittance listing for each jurisdiction;

c. that the jurisdiction has adopted the uniform account numbering system;

d. that the jurisdiction correctly administers credits and refunds;

e. that the jurisdiction provides required information to other member jurisdictions; and

f. that the required information is provided to the IFTA, Inc. in a timely manner.

CITE 1. Records of Licensee Information

Jurisdiction maintains a complete record of all fuel tax returns submitted by each of its licensees P910

The jurisdiction's licensee account records contains at least the following: Fuel tax returns P910.050 Applications P910.100 Audit findings and work papers P910.150 Refund requests P910.200 Notifications issued for debit or credit balances by the base jurisdiction P910.250 Payments of taxes made to the base jurisdiction P910.300


Page 2

Funds received from and transmitted to other jurisdictions. Such records shall identify licensees and remittances from each licensee

P910.350

Cancellation of license requests P910.400 Requests for hearing to resolve assessments made by the base jurisdiction P910.450

Results of administrative hearing process P910.500 Jurisdiction's IFTA records storage system, which may be microfilm, microfiche, or other computerized or

condensed record storage system, meets the legal requirements of the base jurisdiction P920.100

Jurisdiction maintains IFTA tax returns for a minimum of four years P920.200 2. Licensee Account Identification

The jurisdiction adopted a uniform account numbering system of eleven characters which contains as the first two characters the alphabetic designation of the base jurisdiction. For US jurisdictions, the subsequent nine characters will be the Federal Employer Identification number of the licensee issued by the Internal Revenue Service

P200, P210P1010

If the jurisdiction establishes fleet accounts, it identifies each account with a fleet identifier in addition to the

carrier identification number P210

If the jurisdiction is a Canadian jurisdiction, it has adopted a numbering system for the subsequent nine

characters which will meet its needs P230

Jurisdiction allows licensee's account number to remain unchanged from year to year R610 3. Communications With Other Jurisdictions

The jurisdiction sends to each member jurisdiction a listing of new applicants on a quarterly basis, identifying the license numbers assigned.

R350

The jurisdiction notifies all member jurisdictions within 10 days of all revocations/suspensions or reinstatements R420.300R430.300

The jurisdiction notifies all member jurisdictions of all cancellations quarterly R410.300


Page 3

The jurisdiction notifies appropriate member jurisdictions of audit findings A690.300 The jurisdiction forwards to new member jurisdictions the required licensee listings R1535.200


Page 4

4. Communications With IFTA, Inc. Staff

Jurisdictions notified the IFTA, Inc. staff at the earliest possible time of any change in their tax rate.

P1120.100

Date of Tax Rate Change: ____________________________________ Date of Notification to IFTA, Inc. staff: __________________________ Jurisdiction submitted an annual report to the IFTA, Inc. staff for distribution to each member jurisdiction for each

year of the review period P1110.100

Jurisdiction submitted the required annual reports for the preceding calendar year by March 1 for the preceding

calendar year P1110.100

Jurisdiction's annual reports include: Number of IFTA accounts P1110.300.005 Number of new licensees P1110.300.025 Number of cancellations and suspensions and/or revocations P1110.300.010 Number of audits P1110.300.015 Number of audits with assessment P1110.300.020 Current tax rates P1120.100 Unusual activities within a member jurisdiction that could affect an audit P1110.300.030 Jurisdiction advised the IFTA, Inc. staff of all non-taxable miles or kilometers, non-taxable fuels, exempt vehicles,

or other changes affecting the administration of the Agreement P1130

JURISDICTION: DATE:

J.2. BASE JURISDICTION ACCOUNTING - TRANSMITTALS

Worksheet J.2. Revised March 2011

Page 1

CITE Jurisdiction forwards all funds received to the appropriate jurisdictions once each month P1040 All funds received by the last day of the month are forwarded by the last day of the following month. P1040 Payments of billing transmittals received from other jurisdictions are made by the last day of the month following

the month in which the billing transmittal was received P1040

Reports of no activity are forwarded to member jurisdictions when no funds are collected P1040 Transmittals to other member jurisdictions are consecutively numbered P1050 At the end of each calendar year, each non-Clearinghouse member jurisdiction shall notify other jurisdictions of

the number of transmittals that have been sent that calendar year. At the end of each calendar year, Clearinghouse members shall notify all non-Clearinghouse members of the number of transmittals that have been sent that calendar year.

P1050

The jurisdiction's transmittal contains at least the following information: The base jurisdiction's name P1040.050 The reporting period of the transmittal P1040.100 The account number of each licensee being reported P1040.150 The total miles or kilometers reported for each licensee for that jurisdiction P1040.200 The total taxable miles or kilometers reported for each licensee for that jurisdiction P1040.250 The reported fleet fuel consumption factor for each licensee P1040.300 The reported taxable gallons or liters for each licensee for that jurisdiction P1040.350 The reported tax paid gallons or liters for each licensee for that jurisdiction P1040.400


Page 2

The net taxable gallons or liters for each licensee for that jurisdiction P1040.450 The tax due for each licensee for that jurisdiction P1040.500 The interest due for each licensee for that jurisdiction P1040.550 The total due for each licensee for that jurisdiction P1040.600 The amount deficient from partial payment for each licensee for that jurisdiction (If Option 1 is utilized) P1040.650

The summary totals of:

Miles or kilometers

P1040.700 Taxable miles or kilometers P1040.700 Taxable gallons or liters P1040.700 Tax-paid gallons or liters P1040.700 Tax Due P1040.700 Interest Due P1040.700 Total Due P1040.700 Amount Deficient (If Option 1 is utilized) P1040.700 Audit results are transmitted to member jurisdictions with monthly transmittals A690.400

Jurisdiction properly transmits funds to other member jurisdictions according to the payment option chosen:

Option 1

Option 2

P1060

P1060.100

P1060.200


Page 3

U.S. Jurisdictions:

Transmittal reports to a Canadian jurisdiction are in U.S. customary measures and U.S. dollars P1030.100 All funds transmitted are in U.S. dollars P1030.100

Canadian Jurisdictions: Transmittal reports to a U.S. jurisdiction are either in U.S. customary measures and U.S. dollars or in

International Customary measures and Canadian dollars. P1030.200

All funds transmitted to U.S. jurisdictions are in U.S. dollars P1030.200 Conversions from Canadian to U.S. dollars are done using the Bank of Canada noon day spot rate quoted at

12:00 p.m. Eastern time P1030.200 Fund conversions prior to 12:00 p.m. Eastern time are converted using the prior day spot rate P1030.200 The amount converted is net the cost of converting P1030.200

All Jurisdictions:

Transmittal funds include: Indication of which transmittal report(s) the funds are for P1030.300.005 The gross amount being transmitted P1030.300.010 The currency of funds – U.S. or Canadian dollars P1030.300.015 The conversion rate and the date of the conversion rate (if applicable) P1030.300.020 The cost of conversion (if applicable) P1030.300.025 The net amount being transmitted (if applicable) P1030.300.030

JURISDICTION: DATE:

J.3. BASE JURISDICTION ACCOUNTING - CREDITS AND REFUNDS


CITE Licensees receive full credit or refund for tax-paid fuel used outside the jurisdiction where the fuel was purchased R1100 If a credit is not refunded, it is carried over to offset liabilities of the licensee in future reporting periods until the

credit is fully offset or until eight calendar quarters shall have passed since the end of the calendar quarter in which the credit accrued, whichever occurs sooner

R1120.100

The licensee receives, on request, a cash refund of any accumulated credits R1100 The jurisdiction allows credits and issues refunds for all of its licensees on behalf of all member jurisdictions R1100 Credits are refunded to the licensee only if all motor fuels taxes, penalty, and interest, including audit

assessments, governed by IFTA due every other member jurisdiction have been paid, unless the unpaid amount is under proper appeal procedure

R1100R1140.200

Refunds determined to be properly due are paid within 90 days after receipt of a written request for payment from

a licensee R1150

If refunds are not paid within the 90-day period, interest accrues at the rate specified in the Agreement R1150 Such interest is calculated from the date the refund was due for each month or fraction thereof until paid R1150

JURISDICTION: DATE:

K. AUDITORS

Worksheet K Revised March 2011

Page 1

Determine the following as required or suggested by the IFTA: a. that the jurisdiction's IFTA auditors have adequate technical training and proficiency and that those auditors meet the

qualifications of the jurisdiction's personnel guidelines; b. that the jurisdiction's audit and audit support staffs are properly trained in audit planning and audit procedures and that

supervisory follow-up and review of the auditor's procedures exist;

c. that the jurisdiction's auditors maintain an independence in mental attitude and are without bias with respect to IFTA licensees under audit;

d. that the IFTA jurisdiction's auditors exercise due professional care in performing an IFTA audit and in the preparation of an IFTA audit report;

e. that all licensees are given equal consideration and that no preferential treatment is given; that all licensees are audited under

a uniform program unless special circumstances exist otherwise; that each jurisdiction is given equal consideration in an IFTA audit; and

f. that the jurisdiction's IFTA auditors conduct themselves in a manner which promotes cooperation and good relations and that auditors are allowed to discuss discrepancies with and make preliminary recommendations to an IFTA licensee.

CITE IFTA auditors have adequate technical training and proficiency A210.100

Jurisdiction auditors meet the qualifications of the jurisdiction's personnel guidelines A410.100 Jurisdiction's audit and audit support staffs are properly trained in audit planning and audit procedures A410.200 Supervisory follow-up and review of the auditor's procedures exists A220.200 In all matters relating to an audit assignment, an independence in mental attitude is maintained by the

jurisdiction's auditors A210.200

The auditors are without bias with respect to a licensee under audit A210.200

JURISDICTION: DATE:

K. AUDITORS

Worksheet K Revised March 2011

Page 2

Due professional care is exercised in performing an audit and in preparing an audit report A210.300 All licensees are given equal consideration; no preferential treatment is given A420.100 All licensees are audited under a uniform program unless special circumstances dictate otherwise A420.300 Each member jurisdiction is given equal consideration in an audit A420.200

Auditors are allowed to discuss any discrepancies with a licensee A410.400

JURISDICTION: DATE:

M. AUDIT PROCEDURES

Audited Licensee Name: __________________________ License Number: _________________________ Audit Period: __________________________________ Audit Completion Date: _____________________

Worksheet M Revised March 2011

Page 1

Determine the following as required or suggested by the IFTA: a. that the jurisdiction's auditors adequately plan their IFTA audits; b. that the IFTA pre-audit, sampling, and testing procedures are followed; c. that the jurisdiction's IFTA audits include a proper study and evaluation of a licensee's internal controls;

d. that the jurisdiction's auditors review and verify reports kept by a licensee that were generated through a computer-based system;

e. that the jurisdiction's IFTA audit working papers are complete and support the audit findings; that the audit files contain the

appropriate documentation; f. that the jurisdiction's IFTA audit reports contain the appropriate information; and g. that the jurisdiction properly notifies appropriate parties of audit findings. CITE

Audit was adequately planned Preaudit Analysis Study and Evaluation

A220.100A220.200

The audit was conducted on a sampling basis, unless a specific situation dictated otherwise A530 Sample period(s) selected are representative of the licensee's operations A530.100 Auditors, through inquiry and observation, determined the licensee's prescribed policies and procedures. (An

auditor normally documents his understanding in his work papers by completing a questionnaire designed for this A640.100


Page 2

purpose, or by diagramming or describing the flow of transactions in flowchart or narrative form) The auditors reviewed the licensee's accounting system A640.100 Auditors identified the records that the licensee keeps to support his returns A640.100.015 Auditors determined if there had been changes in the licensee's accounting procedures or operations during the

audit period A640.100.005

Audit was conducted on behalf of all member jurisdictions R1310 Receipts for tax-paid purchases that have been altered or indicate erasures are not accepted without

demonstration from the licensee that the receipt is valid. P570.200

If tax paid fuel documentation was unavailable, all claims for tax paid fuel were disallowed A550.200 The auditor made any reasonable attempt to verify distance A540.300 If the auditor was unable to determine any reasonable method to assign or allocate unreported miles/kilometers,

unreported miles/kilometers were assigned to all jurisdictions on the basis of each jurisdiction’s audited percentage of total miles/kilometers.

A520

In the absence of adequate records, 4 m.p.g. was used unless substantial evidence exists to the contrary. A550.100 Audit documentation accomplishes the following:

A670

Communicates the results of the audit, showing adjusted distance, fuel and monetary results A670.100 Documents and justifies procedures conducted by the auditor A670.200 Indicates source of audit results (for example, audited fuel determined from retail purchase receipts) A670.300 Communicates suggestions and recommendations made to the licensee A670.400 Clearly supports audit findings A670.500


Page 3

The audit file contains at least the following: A680 Schedules: A680.100 Summary schedules A680.100.005 Summary schedules shall include reported and audited fuel and distance for each affected jurisdiction.

They shall also include the assessment or refund for the jurisdictions and the net total assessment or refund due for the audit, including all penalties and interest.

Supplementary schedules A680.100.010 Supplementary schedules shall provide additional detail for results on the summary schedules.

Supplementary schedules will contain, but not be limited to, schedules showing how audited fuel and distances were calculated and the computation of adjustment factors determined from a sample, if applicable.

Support Documentation: A680.200 Detail Information A680.200.005 Detail information is documentation of actual records reviewed which support the audit results. Detail

information includes, but is not limited to, the following: detail of retail or bulk purchases, detail of bulk fuel withdrawals and analysis of trips audited, showing audited distance in total and per jurisdiction. This information may be maintained on a work paper or electronically on a database.

Listing of Records Maintained A680.200.010 A listing of records maintained shall indicate what records are maintained and presented by the licensee

and whether the records comply with the Agreement. A synopsis of opening and closing conference notes with licensee indicating date, and persons attending A680.200.015 Licensee Audit Report contains at least the following information: Name and address of licensee A660.100.005 Account number A660.100.010 Audit period A660.100.015 Types of records audited A660.100.020


Page 4

Description of audit techniques employed A660.100.025 Net distance adjustment A660.100.030 Net tax paid fuel purchases adjustment A660.100.035 MPG/KPL as reported A660.100.040 MPG as result of audit A660.100.045 Net fuel tax adjustment per jurisdiction A660.100.050 Remarks and recommendations A660.100.055 Signature of auditor or reviewing jurisdictional official and date A660.100.060 In calculating audit interest, overpayments to any jurisdiction quarterly returns within the audit period were

applied to any liability on subsequent quarterly returns on a jurisdictional basis within the audit period R1230.300.010

In calculating audit interest, interest accrued on the net amount of tax due each jurisdiction within the period of

time audited R1230.300.010

Interest was calculated from the date the tax was due for each calendar month or fraction thereof. (A fraction of a

month accrued a full month’s interest.) R1230.300.010

The auditor used the best information available to the jurisdiction in conducting the audit A540.200 If a software distance program was used, it was used only as an audit tool A540.400 Following the close-out conference and any review period, the licensee was furnished with the Licensee Audit

Report and a customary notice of assessment, billing or other notification which would signify the beginning of the licensee’s appeal period

A690.100

Within 45 days of the providing the licensee with the Licensee Audit Report and its customary notification of

assessment or billing, the Interjurisdictional Audit Report was prepared and the jurisdiction notified the affected member jurisdictions of the audit findings

A690.200


Page 5

The Interjurisdictional Audit Report contains at least the following information A660.200 Name of base jurisdiction A660.200.005 Name and address of licensee A660.200.010 FEIN or equivalent A660.200.015 Reported tax by jurisdiction A660.200.020 Audited tax by jurisdiction A660.200.025 Penalty A660.200.030 Interest by jurisdiction A660.200.035 Total by jurisdiction A660.200.040

JURISDICTION: DATE:

N. ASSESSMENT AND COLLECTION PROCEDURES

Worksheet N Revised March 2011

Determine that the jurisdiction has assessment procedures in place as required by the IFTA. CITE Jurisdiction methods of collection are governed by its laws and the administrative procedures established by the

Agreement. R1240.100

In the event a licensee fails to file a tax return when due, fails to make records available upon written request, or

fails to maintain records, the jurisdiction: R1210.100

Determines the tax liability of the licensee for each jurisdiction and/or R1210.200.005 Revokes or suspends the license if the licensee fails to file and tax return with full payment due R1210.200.010 The jurisdiction adds penalties and interest and serves any assessment in accordance with its laws R1210.300

JURISDICTION: DATE:

O. APPEALS PROCESS

Worksheet O Revised March 2011

Determine that the jurisdiction has an appeals process in place for all actions allowable under the IFTA. CITE Jurisdiction conducts its appeal process in accordance with the procedures established by its own law and

regulations on behalf of all member jurisdictions R1400

R1430.200

Jurisdiction holds hearings expeditiously and gives at least 20 days’ written notice of the time and place of the hearing

R1420

Jurisdiction notifies an appellant of the findings of fact and ruling on the appeal R1440 Jurisdiction allows an appellant to appear in person and/or be represented by counsel at the hearing and to

produce witnesses, documents, or other pertinent material to substantiate the Appeal R1430.100

Further appeal of the jurisdiction’s finding proceed in accordance with the jurisdiction’s laws R1450.100

JURISDICTION: DATE:

P. RESPONSIBILTIES IN BANKRUPTCY PROCEEDINGS

Worksheet P Revised March 2011

Determine that the jurisdiction has procedures in place for Bankruptcy proceedings as required by the IFTA. CITE In the event the jurisdiction receives official notice or otherwise obtains knowledge of the filing of a bankruptcy

case or similar insolvency, liquidation or reorganization proceeding by or against a licensee, the base jurisdiction takes responsibility for determining and taking such action as it deems reasonable and necessary with respect to the need to:

R1250.100

Prepare and file a proof of claim R1250.100.005 Prepare and file requests for payment of post-petition liabilities R1250.100.010 Prosecute and defend proofs and requests R1250.100.015 If the jurisdiction determines that it will not pursue the IFTA claim, the jurisdiction promptly notified any jurisdiction

that had an interest in the proceeding so it could seek to intervene R1250.200

Upon request for a member jurisdiction, the jurisdiction promptly provided such information and documentation in

its possession as was necessary for the other jurisdiction to defend any contested matters or adversary proceedings involving fuel use taxes administered under the IFTA

R1250.300



June 7, 2012 Page 1 of 3

IFTA SHORT TRACK PRELIMINARY BALLOT PROPOSAL

#7-2012 Sponsor Jurisdiction of Kansas Jurisdiction of Nevada Jurisdiction of Oregon Date Submitted May 31, 2012 Proposed Effective Date January 1, 2013 Manual Sections to be Amended (Effective July 1, 1998 Last Revised September 2011) IFTA Articles of Agreement R1555 COMPLIANCE MATTERS

R1555.400 Expulsion Process Subject An amendment to the expulsion provisions of the Agreement. History/Digest The IFTA Articles of Agreement provides for the IFTA, Inc. Board of Trustees to request a resolution of expulsion of a member for failure to bring its IFTA program into compliance with the Agreement as a result of an Order issued by the IFTA Dispute Resolution Committee (DRC) pursuant to the IFTA Dispute Resolution Process (Article R1555.400.005). The existing language in R1555.400.005 conflicts with the penalty provisions of the IFTA Dispute Resolution Process (DRP) in that the penalties in the DRP are intended to be progressive in nature with the ultimate penalty being a resolution to expel being issued by the IFTA, Inc. Board of Trustees; subject to a vote of the membership in accordance with R1555.400. The direct language in R1555.400.005 requires the Board of Trustees to request a resolution to expel a member one year after said member has lost its voting power per the DRP. The loss of voting rights is among the first penalties imposed by the DRC for non-compliance with an Order of the DRC (subject to the exhaustion of appeals rights in accordance with IFTA Dispute Resolution Process Section IV.4). The existing language in the Articles of Agreement conflicts with the language in the DRP by accelerating the issuance of the resolution to expel in a manner that is inconsistent with the progressive penalties currently prescribed by the DRP to deal with non-compliant members.



Intent The intent of this ballot is to amend the IFTA Articles of Agreement so that the expulsion provisions of the Agreement are consistent with the progressive nature of the penalties provided for in the IFTA Dispute Resolution Process.



Interlining Indicates Deletion; Underlining Indicates Addition 1 2 ARTICLES OF AGREEMENT 3 4 R1555 COMPLIANCE MATTERS 5 6 [SECTIONS R1555.100, R1555.200, AND R1555.300 REMAIN UNCHANGED] 7 8 .400 Expulsion Process 9 10

.005 The IFTA, Inc. Board of Trustees may request a resolution to expel a member 11 jurisdiction pursuant to an Order issued by the IFTA Dispute Resolution 12 Committee in accordance with the IFTA Dispute Resolution Process. 13

14 .00510 The IFTA, Inc. Board of Trustees shall may request a resolution to expel a 15

member jurisdiction which has failed to bring its IFTA program into compliance 16 one year following its loss of voting power and membership dues being doubled 17 under the penalty provisions of the IFTA Dispute Resolution Process. 18

19 .015 The IFTA, Inc. Board of Trustees shall request a resolution to expel a member 20

jurisdiction which has failed to bring its IFTA program into compliance one year 21 following its membership dues being tripled under the penalty provisions of the 22 IFTA Dispute Resolution Process. 23

24 25 .0120 The Board shall issue a resolution of expulsion to the IFTA membership for 26

approval. A ballot by which a member jurisdiction may vote on the resolution will 27 be attached to the resolution. A copy of the resolution will be sent to the 28 jurisdiction which is the subject of the resolution, but said jurisdiction will not be 29 allowed to vote on the resolution. 30

31 .01525 A resolution expelling a member jurisdiction from the Agreement shall require the 32

affirmative vote in writing of three-fourths of the total member jurisdictions, 33 excluding the jurisdiction which is the subject of the resolution. 34

35 .0230 Member jurisdictions will have sixty (60) days from the date of issuance of the 36

resolution to vote on the resolution of expulsion. Failure of a member jurisdiction 37 to submit its vote shall be deemed a vote against the resolution of expulsion. 38

39 .0235 If the member jurisdictions approve the resolution for expulsion, the Board of 40

Trustees will notify the subject jurisdiction of its expulsion from the Agreement. A 41 copy of the resolution will be forwarded to the Governor of the subject United 42 States jurisdiction or the Premier of the subject Canadian Province and to the 43 Secretary of Transportation of the United States. 44

45 46 47 48

INTERNATIONAL FUEL TAX AGREEMENT

DISPUTE RESOLUTION PROCESS

IFTA DISPUTE RESOLUTION PROCESS STATEMENT OF PURPOSE

Ratified by Membership July 1996 Effective July 1, 1997

Revised and Ratified July 2004 Revised and Ratified July 2005 Revised and Ratified July 2006

2012 Proposed Amendment Page 2 of 23

STATEMENT OF PURPOSE

The purpose of the International Fuel Tax Agreement (IFTA) Dispute Resolution Process is to provide a process by which the member jurisdictions and IFTA licensees have confidence that compliance issues regarding the IFTA governing documents are being addressed in a consistent and an efficient manner. The Dispute Resolution Process offers the opportunity for member jurisdictions, the Program Compliance Review Committee and IFTA licensees to address compliance issues pursuant to the IFTA Articles of Agreement, Sections R1555.100.005 and R1555.100.010. The goal of this process is to offer all member jurisdictions and IFTA licensees a safeguard against noncompliance. The Dispute Resolution Process also provides a means for resolution of continuing compliance issues identified through the Program Compliance Review Process.

IFTA DISPUTE RESOLUTION PROCESS I. DEFINITIONS AND GENERAL PROCEDURES




I. DEFINITIONS AND GENERAL PROCEDURES


A. DEFINITIONS Ratified by Membership July 1996

Effective July 1, 1997 Revised and Ratified July 2004 Revised and Ratified July 2005 Revised and Ratified July 2006


A. DEFINITIONS

The following definitions will be used throughout the entire dispute resolution process. 1. Board:

Board of Trustees of IFTA, Inc. The act of a two-thirds majority of the Trustees shall be the act of the Board.

2. Chair: Chair of the Dispute Resolution Committee of IFTA, Inc. The chair will refer to the chair’s replacement in this Dispute Resolution Process if the chair’s jurisdiction is involved in the dispute. The succession shall be the vice chair. If the vice chair’s jurisdiction is involved in the dispute, the Committee shall designate one of its members.

3. Committee:

Dispute Resolution Committee of IFTA. Unless stated otherwise, the Committee’s actions must be by a two-third vote of a quorum present of all the eligible voting members.

4. Complainant:

A. A member jurisdiction alleging non-compliance by a member jurisdiction. B. An IFTA licensee alleging non-compliance by a member jurisdiction in only those matters

authorized by the IFTA Articles of Agreement.

C. The IFTA Program Compliance Review Committee

5. Executive Director:

Executive Director of IFTA, Inc. For purposes of this process, should the Executive Director be unavailable, the duties of the Executive Director shall be performed by the Program Director of IFTA, Inc. In that instance, “Executive Director” shall refer to the Program Director.

6. IFTA Commissioner:

The IFTA member jurisdiction representative designated by such jurisdiction to vote on all IFTA-related matters requiring jurisdiction vote. For purposes of this Dispute Resolution Process, an IFTA Commissioner may designate another representative of the same jurisdiction to perform required duties. In that instance, “IFTA Commissioner” shall refer to the designee.


A. DEFINITIONS Ratified by Membership July 1996



7. Quorum:

A quorum of the committee to conduct business shall be the vote of 7 members.

8. Referral:

A formal Referral for Enforcement of a Final Determination Finding of Non-compliance from the Program Compliance Review Committee.

9. Respondent:

A member jurisdiction alleged to be in non-compliance by another member jurisdiction, the Program Compliance Review Committee or an IFTA licensee.

10. Review:

A Program Compliance Review.

11. Review Committee:

The IFTA Program Compliance Review Committee.


B. GENERAL PROCEDURES Ratified by Membership July 1996



B. GENERAL PROCEDURES

The following general procedures will be used throughout the entire dispute resolution process. 1. The Complaint, Referral, Protest of Referral or Motion for Appeal will be considered filed with the

Committee when filed with the Executive Director at the business address of IFTA, Inc. The Complaint, Referral, Protest of Referral for Motion for Appeal must be sent to the Executive Director by United States Postal Service certified mail, return receipt requested, by a method of receipted mail offered by the Canada Post or any other National Postal Service, or by an express delivery service.

2. All documents filed during these proceedings, other than the Complaint, Referral, Protest of

Referral, or Motion for Appeal may be filed by facsimile or electronic mail with the Executive Director. The original copy must then be mailed to the Executive Director at the business address of IFTA, Inc.

3. For proof of service of the Complaint, Referral, Protest of Referral or Motion for Appeal, the date

of service shall be the date shown on the receipt issued by the Postal or Post Service or the express delivery service. For proof of service of other documents filed with the Executive Director by mail, the date of service shall be the postmark date. For proof of service of other documents filed by facsimile, the date of service shall be the date recorded by the receiving fax machine on the received document. For proof of service of other documents transmitted by express delivery service, the date of service shall be the date recorded on the receipt issued by such service. For proof of service of other documents transmitted by electronic mail, the date of service shall be the received date recorded by the receiving computer.

4. The Committee or Board shall reject any document served outside the time limitations contained

in these procedures. All time limitations stated in days refer to calendar days. If the due date falls on a Saturday, Sunday, or legal holiday, the next business day shall be considered the final filing date.

5. Ex parte communications between any party to a proceeding and any member of the Committee

regarding the issues contained in the Complaint or Referral are prohibited during a matter pending before the Committee. A Committee member that has an ex parte communication regarding an issue contained in the Complaint or Referral shall not continue to participate or vote in the Complaint or Program Compliance Review Enforcement Process.

6. The Committee has full discretion regarding any matter pending before it unless otherwise

provided in these procedures. 7. The Chair of the Committee or his or her designee will preside over all matters contained herein.

If any Committee member is from a Complainant's or Respondent's jurisdiction, that Committee member will be excused from the proceedings and the remaining Committee members will continue with the proceedings.


B. GENERAL PROCEDURES Ratified by Membership July 1996



8. Parties to a proceeding may represent themselves or may be represented by counsel. 9. All pleadings filed in a proceeding must contain a certificate of service showing the date the

document is placed in the mail, faxed, sent by electronic mail, or presented to an express delivery service.

10. The Executive Director will maintain a file on behalf of the Committee. Each Complaint and

Referral will be assigned a Docket Number upon receipt by IFTA, Inc. IFTA, Inc. will inform the Committee and all parties of the Docket Number assigned to the action filed. IFTA, Inc. will publish the docket to the membership and subscribers on a monthly basis. The docket will include the issues contained in each Complaint and Referral filed. The docket will also include the hearing or review date and location for each cause of action.

11. During the course of a Complaint and Referral, the Complainant and the Respondent have the

right to request extensions of time on filing dates, to request the continuance of a scheduled date, and to bring any other preliminary matters before the Committee. All such requests will be filed with the Executive Director and be served on the other party. Any reply to such requests or other preliminary matters shall be filed by the other party within fifteen (15) days of the date of the certificate of service contained in the pleading. The Chairperson shall grant or deny these requests as deemed necessary, based on the requests and replies filed, and shall issue an Order in response. Any Order issued will indicate distribution to the parties and will be disseminated to the parties by the Executive Director.

12. On the scheduled date of a review or hearing, the Committee will review the written submissions

of the parties or conduct a hearing of the matter. Any hearing will be informal in nature, and will be recorded by electronic means. Tapes of the proceedings will be maintained in a secure manner by IFTA, Inc. If any party to the proceeding requests that a certified court reporter record the proceedings, or desires to have a tape of the proceedings transcribed, the cost of the court reporter’s service or the transcription will be assumed by the party making the request. If a transcription of the proceeding is done, the party must provide two (2) certified copies of the transcription to the Committee by sending the transcriptions to the Executive Director. The cost of these copies will be assumed by the party requesting the transcription.

13. Rules of evidence normally required in a judicial proceeding will not apply.

IFTA DISPUTE RESOLUTION PROCESS II. COMPLAINT PROCESS




II. COMPLAINT PROCESS

IFTA DISPUTE RESOLUTION PROCESS II. COMPLAINT PROCESS

A. GENERAL INFORMATION Ratified by Membership July 1996



A.. GENERAL INFORMATION

1. Before a member jurisdiction or an IFTA licensee may bring a Complaint against a member

jurisdiction, the parties shall make good-faith attempts to resolve their dispute. A good faith attempt includes both parties taking steps to resolve their differences and settle the matter prior to bringing a Complaint.

2. A Complaint proceeding is initiated by the filing of a Complaint ("Complaint") with the Committee. 3. The Committee shall review a Complaint for merit. If the Committee finds that the Complaint has

no merit or was filed in bad faith, the Complaint shall be dismissed, and actual expenses incurred in the filing of the proceeding, including out-of-pocket expenses incurred by IFTA, Inc. and the Respondent, shall be assessed against the Complainant. Such expenses shall include, but not be limited to, travel expenses, legal fees (if no in-house legal counsel is available), postage and costs of long-distance telephone calls. Such expenses shall not include salaries and benefits of employees or any overhead costs. Proof of these expenses of the parties is required.

IFTA DISPUTE RESOLUTION PROCESS II. COMPLAINT PROCESS B. COMPLAINT PROCESS




B. COMPLAINT PROCESS

1. The original Complaint will be filed by the Complainant with the Executive Director, one (1) copy

shall be served on the IFTA Commissioner of the Respondent, and one (1) copy shall be served on the head of the Respondent agency which administers the IFTA program (if different from the IFTA Commissioner). The Executive Director shall disseminate copies of the Complaint to the members of the Committee and will place the original document in the Respondent's Review file maintained at IFTA, Inc.

2. The Complaint shall contain at least the following:

a. name, address, and telephone number of Complainant;

b. name, address, and telephone number of IFTA Commissioner of Complainant (if applicable);

c. name, address, and telephone number of Respondent;

d. name, address, and telephone number of IFTA Commissioner of Respondent; e. Indications, including evidentiary evidence, of all prior actions taken by the parties to

resolve the dispute;

f. copies of Complainant's evidentiary documents that support the allegations contained in the Complaint; (The Complaint should contain a statement that the evidence is attached to the Complaint and incorporated by reference in the Complaint. The evidentiary documents should be indexed and attached as exhibits to the Complaint.)

g. request for relief; (The Complainant may request a ruling of non-compliance based on

the evidence submitted or may request that the disposition include an order for a Program Compliance Review.)

h. a Request for Hearing by the Committee; (If no such request is made, the Committee will

review the written submissions of the parties within thirty (30) days of the due date of the Respondent's Answer.)

i. the signature of the IFTA Commissioner of the Complainant or the signature of the owner

or an authorized officer or partner of an IFTA licensee; and

j. dated certificate of service on Respondent and IFTA, Inc. (The certificate should state what delivery or mail service was used.)





3. Respondent will have thirty-five (35) days from the date shown on the certificate of service contained in the Complaint to answer the Complaint.

4. The original Answer shall be served by the Respondent on the Executive Director and one (1)

copy shall be served on the Complainant. The Executive Director will disseminate copies of the Answer to the members of the Committee, and the Executive Director will place the original in the Respondent's Review file.

5. The Answer should be all inclusive by responding to each of the paragraphs contained in the

Complaint and, in addition, must include at least the following:

a. copies of Respondent's evidentiary documents that support the allegations contained in the Answer; (The Answer should contain a statement that the evidence is attached to the Answer and incorporated by reference in the Answer. The evidentiary documents should be indexed and attached as exhibits to the Answer.)

b. a Request for Hearing by the Committee, if applicable; (Such Request should be made

only if the Complainant did not request a hearing.)

c. the signature of the IFTA Commissioner of the Respondent; and

d. dated certificate of service upon the Complainant and IFTA, Inc. (The certificate should state what delivery or mail service was used.)

6. Respondent's failure to submit timely Answer to the Complaint will constitute an admission by the

Respondent to the allegations contained in the Complaint. 7. The Complaint and the Answer may be amended once within thirty (30) days of filing. Service of

amended pleadings shall be the same as required for the original pleadings. Responses to any amended pleading must be filed within fifteen (15) days of the date of the certificate of service contained in the amended pleading. If any extensions of time are requested and granted, the due dates will be automatically extended accordingly.

8. Within 30 days after receipt of the Complaint and the Answer thereto, the Committee shall

schedule a date and location for the hearing. The Committee should select a date that ensures the hearing will be held as soon as possible. The hearing date and location shall be set at the discretion of the Committee. The Committee, working in concert with IFTA, Inc., will make every effort to schedule the hearing in conjunction with the Annual IFTA Business Meeting, IFTA Manager’s/Law Enforcement Workshop, IFTA/IRP Audit Workshop or any other regularly scheduled meeting of IFTA, Inc.

9. If neither party requests a hearing, the Complainant and the Respondent may have the

opportunity to provide briefs in support of their positions. The briefing schedule is as follows:

a. Complainant’s Brief in Support is due fifteen (15) days from the due date of the Answer;

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b. Respondent’s Brief in Opposition is due ten (10) days after receipt of the Complainant’s brief; and

c. Complainant’s Reply Brief is due five (5) days after receipt of the Respondent’s Brief in

Opposition.

All briefs shall be no more than a maximum of thirty (30) double-spaced pages (excluding exhibits).

10. If the Committee has granted a Request for Hearing, the parties to the proceeding must, at least ten (10) days prior to the hearing date, inform the Committee in writing of the number of persons who will be offering testimony, a written offer of proof of the content of the testimony, and the estimated time required for their cases in chief. This information shall be sent by the parties to the Executive Director. The Executive Director will disseminate the information to the Committee. Copies of these documents shall be exchanged between the parties. The Committee may exclude any irrelevant, immaterial or unduly cumulative of repetitious evidence.

11. Any requests for discovery from either party shall be made within 30 days after receipt of the

Answer. All responses to requests for discovery shall be completed within 30 days after receipt of the request for discovery.

12. The burden of proof in all such proceedings rests with the Complainant to show by a

preponderance of the evidence that the allegations in the Complaint are true. 13. In a hearing, the Complainant will first be given the opportunity to be heard. The Complainant will

offer its position by making a presentation to the Committee. The Respondent will have the right to cross-examine any witnesses presented by the Complainant. Following the Complainant’s presentation, the Respondent’s representative will make a presentation to the Committee. The Complainant will have the right to cross-examine any witnesses presented by the Respondent. The Committee may make inquiries of the parties’ representatives at any time throughout the hearing. Following the Respondent’s presentation, the Complainant will be given an opportunity to respond. Following the presentations of the parties, the Committee will open the floor for comments from others who wish to be heard. The Committee will then have discussions as necessary to render a decision on the matter. The Industry Advisors, at their discretion, are authorized to issue a written opinion relative to the evidence and testimony presented by the Complainant and Respondent. Such written opinion shall be issued to the Committee Chair and the Executive Director of IFTA, Inc. not later than twenty (20) days after the review of written submissions of the parties or of the hearing date. The Committee shall consider a written opinion submitted by the Industry Advisors as additional information to be reviewed during the discussions held prior to rendering a decision in the matter. A written decision from the Committee will be issued to the parties within sixty (60) days of the review of written submissions of the parties or of the hearing date.

14. The Committee will select one of its members to draft the Findings on Complaint (“Findings”).

That member will draft the Findings and communications will be had among the Committee members until the final draft is signed by each member of the Committee. The signature page of

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the Findings will be drafted to contain an area for approval by signature and an area for dissent by signature. Any Findings issued by the Committee must be approved by a majority of the voting members of the Committee. If a hearing is held, only the Committee members present at the hearing may vote. If a Committee member dissents to the Findings, a written dissent may be drafted by such member and included as part of the Findings issued.

15. The Findings will include determinations on all issues stated in the Complaint and will delineate

the findings of the Committee. It will include grounds for each finding with the citations to the IFTA Articles of Agreement, Procedures Manual, and Audit Manual which support the Findings.

16. The Committee will then publish the Findings of Facts and Conclusion and Disposition. The

Findings will show distribution to the Complainant, the IFTA Commissioner of the Respondent, the Chief Executive of the Respondent and IFTA, Inc.

IFTA DISPUTE RESOLUTION PROCESS III. PROGRAM COMPLIANCE ENFORCEMENT PROCESS




III. PROGRAM COMPLIANCE ENFORCEMENT PROCESS


A. GENERAL INFORMATION Ratified by Membership July 1996



A. GENERAL INFORMATION

1. The Review Committee may bring a Referral for Enforcement of a Final Determination Finding of Non-Compliance. A Referral proceeding is initiated by the filing of a Referral with the Committee.

2. Before a Referral is brought against a member jurisdiction, the Review process must be

completed and Review Committee must have issued a Final Determination Finding of Non-Compliance.

3. The Review Committee may bring a referral within sixty (60) days of the issuance of a Final

Determination Finding of Non-Compliance. 4. In each case the filing of the Referral may be accomplished by the Chair of the Review Committee

or his or her designee who must be a Review Committee member. 5. At the time of filing a Referral the Review Committee Chair must send a copy to the Respondent

by one of the methods enumerated in the Definitions and General Provisions Section of the Dispute Resolution Process. Responses by a Respondent will be served on the Executive Director.


B. REFERRAL PROCESS Ratified by Membership July 1996



B. REFERRAL PROCESS

1. When, pursuant to the Review Process the Review Committee has issued a Final Determination Finding of Non-Compliance, the Review Committee, by its Chair, will file a Referral with the Committee.

2. In addition, the Review Committee will file with the Committee:

a. The Respondent’s Program Compliance Review Final Report; b. The Reassessment Plan resulting from the Respondent’s Program Compliance Review; c. The Reassessment Final Report resulting from the Respondent’s Program Compliance

Review; d. The Final Determination Finding of Non-Compliance issued by the Review Committee;

and e. Any other information from the Respondent’s Program Compliance Review file deemed

necessary.

3. The findings of the Review Committee will be considered prima facie evidence of Respondent’s non-compliance. The Respondent may Protest the Referral.

4. 4. A Protest of Referral is initiated by the Respondent by filing same with the Executive Director,

within thirty-five (35) days of the date the Referral is served on the Respondent Protest of Referral may state the existence of one or more of the following objections:

a. That the basis of the finding of Non-Compliance is erroneous in law. b. That the ordered compliance goals and schedules were impossible to attain, unduly

burdensome, or otherwise unreasonable. c. That the Respondent can show that it is now complying with the Terms of the Final

Determination or is otherwise now in compliance with the IFTA Program.

Arguments in support of the protest must be included.

5. If the Respondent does not file a Protest of Referral within the time limits established, the Final Determination Finding of Non-Compliance of the Review Committee will be declared the Compliance Findings and Order of the Committee.

6. A Protest of Referral shall contain at least the following:





a. Name, address, and telephone number of the Respondent’s IFTA Commissioner and of the attorney or other person the Respondent has assigned as its representative.

b. A copy of the Final Determination Finding of Non-Compliance which is the subject of the

Protest. c. Copies of any evidentiary documents that the Respondent intends to use to show

compliance or progress warranting relief from the Final Determination Finding of Non-Compliance undertaken since the time of the last submission of evidence to the Review Committee.

d. A request for relief.

e. A request for a hearing by the Committee, or a waiver of a hearing by the Committee. f. The signature of the IFTA Commissioner and, if applicable, the lead representative of the

Respondent. g. A dated certificate of service on the Executive Director of IFTA, Inc, including a statement

of the method of service. The Protest of Referral may be amended once within thirty (30) days of its filing. Service of an

Amended Protest shall be the same as an original Protest. 8. The Review Committee may respond to a Protest or an Amended Protest within fifteen (15) days

of its filing, but may elect not to do so. In such case, it will be deemed that the Review Committee has responded with a general denial.

9. Upon receipt of a Protest, the Executive Director will schedule a date and location for the

Committee to review the written submission of the parties. If a hearing was requested by the Respondent and granted by the Committee, a hearing date and location will be set.

10. The Respondent and the Review Committee will have the opportunity to provide briefs in support

of their positions on the Protest. Briefs are optional. The briefing schedule, amendable by the Chair, is as follows:

a. Respondent’s Brief in Support is due fifteen (15) days from the due date of the filing of its

Protest; b. The Review Committee’s Brief in Opposition is due ten (10) days after receipt of the Brief

in Support. c. The Respondent’s Reply Brief is due five (5) days after receipt of Review Committee’s

Brief in Opposition.

11. If the Respondent requested a hearing, the Committee will grant the request upon agreement of any four (4) of its members.





12. Within thirty (30) days of the time scheduled for Committee consideration of the Protest, the

Respondent shall file a written Statement of Compliance with the Committee. The Statement of Compliance will outline and describe the steps the Respondent has taken since the Final Determination of the Review Committee was issued that are intended to bring it into Compliance. The Statement of Compliance will include any documentary evidence the Respondent wishes to submit in support of facts alleged in the Statement.

13. If a hearing has been granted, the Respondent may also move, in its Statement of Compliance, to

permit testimony at the hearing by a witness or witnesses as to factual matters contained in the Statement. Such a motion will include:

a. The identity of the witness or witnesses, including a description of his or her qualification

and source of knowledge to testify as to IFTA compliance actions of the Respondent; b. A summary of the facts expected to be elicited from each of them; c. Copies of any documentary evidence expected to be sponsored by them.

14. The Review Committee may file his or her objections to any of the witnesses or proposed evidence, or may stipulate as to any facts it is proposing to introduce by witness. Granting a request to permit oral testimony is a question for the discretion of the Committee. Ordinarily, the Committee will not grant the request where it is satisfied that the documentary evidence is valid and sufficient to establish the facts in question, or where the Review Committee has stipulated as to the facts in question. The Committee may grant permission for the oral testimony by a majority vote.

15. The Review Committee may file its response to the Statement of Compliance, which will include

any objections to the request for oral testimony of witnesses, within ten (10) days of receipt. 16. The Committee may grant the Request for Oral Testimony within five (5) days of the filing of any

objections by the Review Committee, or of the expiration of the time for such objections. 17. Testimony given by witnesses will be confined to matters concerning actions related to

compliance since the review conducted in the Program Compliance Review Process. Testimony will be received in an informal manner, preferably in a free narrative discussion between the witness and the Committee, with questions or comments for clarification by the representative of the Respondent and the Review Committee permitted as the need for such arise, rather than the usual style of a judicial proceeding. Respondent will carry the burden of proving the actions related to compliance.

18. Following any such testimony, the Respondent will have the opportunity to make its argument to

the Committee, followed by the argument of the Review Committee. The Committee will have the right to interrupt and question during any argument. Arguments and counter-arguments may continue until the majority of the Committee considers that it has sufficient facts and arguments to enable it to make a decision.





19. The Committee will then have discussions as necessary to render a decision on the matter. The Committee will select one of its members to draft the Committee’s Compliance Findings and Order. That member will draft the Findings and Order and communications will be had among the Committee members until the final draft is signed by each member of the Committee. The signature page of the Findings and Order will be drafted to contain an area for approval by signature and an area for dissent by signature. Any Findings issued by the Committee must be approved by a majority of the voting members of the Committee; except that in the case where a hearing was held and one or more members of the Committee were absent, in which case the approval of a majority of the voting members present is sufficient. A Committee member in dissent may draft his or her written dissent and include it as part of the Findings and Order issued.

20. The Findings will include a determination on all issues stated in the Protest, including grounds for

each finding with citations to the IFTA Articles of Agreement, Procedures Manual, and Audit Manual that support its Finding and Order. The findings may take the form of a simple affirmation and adoption of the Final Determination Finding of Non-Compliance as the Committee’s own decision. The Finding and Order will show distribution to the Review Committee, the IFTA Commissioner of the Respondent, IFTA, Inc., and the Chief Executive of the Respondent.

21. The Order may immediately assess any or all of the penalties provided for in section IV of this

process and and/or request a resolution to expel the Respondent pursuant to Section R1555 of the IFTA Articles of Agreement.

22. The Order may also link the assessment of any of the possible penalties to the failure to attain

certain goals in a Compliance Plan by stated dates certain. Following the issuance of an Order in this form, the Respondent will file its Certificate of Compliance not later than each of these dates, showing, with evidence in support, that it has attained such goal. Upon a failure to file a Certificate of Compliance by such date, the Review Committee will immediately file a Statement of Failure to File with the Executive Director of IFTA, Inc., with service on the Respondent. The relevant penalty will go into effect ten (10) days after service of the Review Committee’s Statement of Failure to File unless the Respondent has in the meantime filed a satisfactory Certificate of Compliance.

23. Upon the filing of a Certificate of Compliance, the Review Committee will review it and within ten

(10) days issue either a Finding of Compliance or of Continued Non-Compliance. If the Review Committee finds Continued Non-Compliance, the relevant penalty will go into effect after ten (10) days.

24, After a Finding of Continued Non-Compliance, the Respondent may Petition the Committee for

Relief from the Penalty. The Review Committee may have an opportunity to respond. The Committee may consider the issue of Relief by any convenient and expeditious means of discussion and may grant the relief or otherwise alter the provisions of the penalty in effect upon either a sufficient showing by the Respondent of grounds of relief or on agreement of the representative of the Respondent and the Review Committee. Any Relief granted shall be issued in the form of an Amendment to the Findings and Order and shall be distributed in the same manner as the Findings and Order.

IFTA DISPUTE RESOLUTION PROCESS IV. PENALTIES




IV. PENALTIES

IFTA DISPUTE RESOLUTION PROCESS IV. PENALTIES




PENALTIES

1. If the Respondent fails to bring its program into compliance by the date determined by the

Committee, the Respondent shall suffer immediate loss of voting power and all Board and standing committee seats.

2. If the Respondent fails to bring its program into compliance after 60 days of its loss of voting

power, the Respondent’s membership dues for the current year will be double. The Committee may grant an extension beyond the 60-day period if it believes the Respondent is taking reasonable steps to come into compliance.

3. If the Respondent fails to be in compliance after one year of its loss of voting power, the

Respondent’s membership dues for the next fiscal year will be tripled and a resolution for expulsion may be issued pursuant to the IFTA Articles of Agreement. If the Respondent fails to be in compliance after one year of its dues being doubled, a resolution for expulsion will be issued pursuant to the IFTA Articles of Agreement. If the expulsion resolution fails, the Respondent’s dues will remain tripled until its program is in compliance. Upon compliance, the Respondent’s membership dues for the next fiscal year will reduce to the amount assessed all jurisdictions in good standing.

4. All penalties shall be stayed until the appeal period is exhausted.

IFTA DISPUTE RESOLUTION PROCESS V. APPEALS




V. APPEALS

IFTA DISPUTE RESOLUTION PROCESS V. APPEALS




APPEALS

1. 1. A party may appeal the Committee’s findings to the Board, by submitting a Mmotion for Appeal

to the Board for review by the date of the next Board meeting following the Committee’s Findings or 15 not later than 60 days after the Committee’s Findings, whichever date is later are issued to the parties.

2. No appeal will be heard by the Board without a vote to accept the Appeal. If the Motion to accept

the appeal passes, the Board shall review the matter at the next Board meeting. Upon receipt of a Motion for Appeal, the Board shall have 30 days to conduct a vote to accept or reject the motion. Within 10 days of the vote, the Board shall notify the party submitting the motion whether the motion passed or failed. If the vote on the Motion for Appeal passes, the Board shall review the matter not later than 60 days after the vote to accept the motion.

3. A Mmotion for Aappeal shall:

a. Identify each error of fact, error of reasoning, or error of law which the moving party wishes to have reconsidered, with cross references to the transcript, if applicable;

b. Describe how each error causes the Committee’s decision to be unlawful, unjust or unreasonable;

c. State concisely the factual findings, reasoning or legal conclusion proposed by the moving party;

d. Include any argument or memorandum of law the moving party wishes to file; and e. Provide citations to IFTA governing documents or other applicable authority.

4. Any appeal requested shall not include a de novo review of the evidence submitted to the

Committee. An appeal to the board shall be a review of the original record to determine if the Committee’s findings include unsustainable errors with respect to interpretation of the Agreement, authority or jurisdiction.

5. The party appealing shall be responsible for all costs in providing the Board with a certified copy of

the transcript of the hearing before the Committee. 6. The Board shall issue its decision within 45 days after reviewing the appeal it concludes

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*R1360 RE-AUDIT AND RE-EXAMINATION

.300 The re-audit or re-examination by a member jurisdiction must be performed in cooperation with the base jurisdiction. An adjustment to original audit findings as a result of such re-audit or re-examination must be reconciled with the original audit findings issued by the base jurisdiction. New audit findings shall be issued by the base jurisdiction. A member jurisdiction conducting a re-audit or reexamination shall pay its own expenses.

*A420 AUDIT STAFF

.200 Auditors must conduct audits giving each member jurisdiction equal consideration.

A510 UNIFORMITY

For an audit to be acceptable to all member jurisdictions, it must be conducted in a professional manner and the results clearly documented. Standard terminology is to be used in reporting audit findings (See the IFTA Agreement and Procedures Manual). Acceptable audit standards provide that several procedures may be employed. However, it is necessary that each audit reflect adequate information necessary to satisfy the commissioners of the various member jurisdictions.

A530 SAMPLING

.100 Sample period(s) must be representative of the licensee's operations. A540 VERIFICATION OF LICENSEE RECORDS

.300 The auditor will make any reasonable attempt to verify information reported on the tax returns.

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R200 DEFINITIONS

R242 Person means an individual, corporation, partnership, association, trust, or other entity.

R245 Qualified Motor Vehicle means a motor vehicle used, designed, or maintained for

transportation of persons or property and:

.100 Having two axles and a gross vehicle weight or registered gross vehicle weight

exceeding 26,000 pounds or 11,797 kilograms; or

.200 Having three or more axles regardless of weight; or

.300 Is used in combination, when the weight of such combination exceeds 26,000

pounds or 11,797 kilograms gross vehicle or registered gross vehicle weight.

Qualified Motor Vehicle does not include recreational vehicles.

R248 Recreational Vehicle means vehicles such as motor homes, pickup trucks with attached

campers, and buses when used exclusively for personal pleasure by an individual. In order

to qualify as a recreational vehicle, the vehicle shall not be used in connection with any

business endeavor.

R305 LICENSING REQUIREMENT

Any person based in a member jurisdiction operating a qualified motor vehicle(s) in two or

more member jurisdictions is required to license under this Agreement, except as indicated

in IFTA Articles of Agreement Sections R310 and R500.

R310 TRIP PERMITS

In lieu of motor fuel tax licensing under this Agreement, persons may elect to satisfy motor

fuels use tax obligations on a trip-by-trip basis.

R820 TAXABLE FUEL USE

All motor fuel acquired that is normally subject to consumption tax is taxable unless proof to

the contrary is provided by the licensee. The licensee must report all fuel placed in the

supply tank of a qualified motor vehicle as taxable on the tax return.

R1100 CREDITS AND REFUNDS

A licensee shall receive full credit or refund for tax-paid fuel used outside the jurisdiction where the

fuel was purchased. The base jurisdiction shall allow credits and issue refunds for all of its

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licensees on behalf of all member jurisdictions. Refunds to licensees will be made only when all

tax liability, including audit assessments, have been satisfied to all member jurisdictions.

R1200 ASSESSMENT AND COLLECTION

*R1210 ASSESSMENT

.100 In the event that any licensee

.005 fails, neglects, or refuses to file a tax return when due;

.010 fails to make records available upon written request by the base jurisdiction;

or

.015 fails to maintain records from which the licensee’s true liability may be

determined,

the base jurisdiction shall proceed in accordance with .200 and .300.

.200 On the basis of the best information available to it, the base jurisdiction shall:

.005 determine the tax liability of the licensee for each jurisdiction and/or

.010 revoke or suspend the license of any licensee who fails, neglects or refuses to file a tax report with full payment of tax when due, in accordance with the base jurisdiction’s laws.

Both .200.005 and .200.010 may be utilized by the base jurisdiction. For purposes

of assessment pursuant to .100.010 or .100.015, the base jurisdiction must issue a

written request for records giving the licensee thirty (30) days to provide the records

or to issue a notice of insufficient records.

.300 The base jurisdiction shall, after adding the appropriate penalties and interest, serve an assessment issued pursuant to .200.005 upon the licensee in the same manner as an audit assessment or in accordance with the laws of the base jurisdiction. The assessment made by a base jurisdiction pursuant to this procedure shall be presumed to be correct and, in any case where the validity of the assessment is questioned, the burden shall be on the licensee to establish by a fair preponderance of evidence that the assessment is erroneous or excessive.

*R1230 INTEREST

.300 Computation of Interest

.010 Audits

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Audit interest shall be calculated separately for each jurisdiction. Audit

interest shall accrue monthly on the cumulative net tax balance owed to a

jurisdiction until paid. A cumulative net tax balance is the amount of

additional tax owed or tax overpayment made to a jurisdiction

immediately following the due date of any tax reporting period taking into

account all prior additional tax owed or overpayments made to a

jurisdiction during the audit period. The cumulative net tax balance shall

be adjusted immediately following the due date of any subsequent tax

reporting period to reflect tax owed or overpayment made for that tax

reporting period. A full month’s interest shall accrue for any portion of a

month on which tax owed remains unpaid. An overpayment for one

jurisdiction shall have no effect on the interest calculation for any other

jurisdiction.

*R1400 APPEAL PROCEDURES

The appeal process shall be conducted in accordance with the procedures established by the base

jurisdiction. R1410, R1420, and R1430 only apply where a base jurisdiction does not have

provisions in its administrative procedures laws for appeals of actions or audit findings.

R1450 FURTHER REQUESTS FOR APPEAL

.100 Further appeal of any jurisdiction's finding will proceed in accordance with that

jurisdiction's laws.

.200 In the case of an audit, if the licensee is still in disagreement with the original

finding, the licensee may request any or every jurisdiction to audit the licensee's

records. Each jurisdiction to whom a request is made may elect to accept or deny

the request. Each jurisdiction electing to audit the licensee's records will audit only

for its own portion of the licensee's operations. The licensee shall make records

available at the office of the jurisdiction or at a place designated by the jurisdiction

or pay reasonable per diem and travel expenses associated with conducting an

audit at the licensee's place of business.

*R1555 COMPLIANCE MATTERS

.100 Dispute Resolution Process

Disputes concerning issues of compliance with the International Fuel Tax

Agreement may be resolved pursuant to the IFTA Dispute Resolution Process. The

IFTA Dispute Resolution Process may be utilized to resolve only:

.010 Compliance disputes between member jurisdictions and IFTA licensees in those matters where no administrative remedy to the IFTA licensee is available within the member jurisdiction involved in the dispute. Compliance

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disputes subject to this section shall not include disputes between member jurisdictions and IFTA licensees over matters of substantive jurisdiction law, including but not limited to, laws governing the imposition, assessment, and collection of jurisdiction motor fuel use taxes collected pursuant to the International Fuel Tax Agreement;

A540 VERIFICATION OF LICENSEE RECORDS

.100 If the licensee's operational records are not located in the base jurisdiction and the

base jurisdiction's auditors must travel to where such records are maintained, the

base jurisdiction may require the licensee to pay the base jurisdiction per diem and

travel expenses incurred by the auditor(s) in performance of such an audit.

.200 The audit will be completed using the best information available to the base

jurisdiction. The burden of proof is on the licensee.

.300 The auditor will make any reasonable attempt to verify information reported on the

tax returns.

.400 If the base jurisdiction utilizes a distance reporting software program to verify the

records of the licensee, that software program shall be used as an audit tool. The

auditor must use discretion when verifying the licensee's records. All

documentation required to be maintained in accordance with Section P540 of the

IFTA Procedures Manual, and any other records used by the licensee to

substantiate its distance traveled, must be considered by the auditor(s) in

determining an acceptable distance reporting system and the accuracy of reported

distance traveled.

A550 INADEQUATE LICENSEE RECORDS/ASSESSMENT

.100 Fuel Use Estimation

If the licensee's records are lacking or inadequate to support any tax return filed by

the licensee or to determine the licensee's tax liability, the base jurisdiction shall

have authority to estimate the fuel use upon (but is not limited to) factors such as

the following:

.005 Prior experience of the licensee;

.010 Licensees with similar operations;

.015 Industry averages;

.020 Records available from fuel distributors; and

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.025 Other pertinent information the auditor may obtain or examine.

Unless the auditor finds substantial evidence to the contrary by reviewing the

above, in the absence of adequate records, a standard of 4 MPG/1.7KPL will be

used.

.200 Tax Paid Fuel Credits

When tax paid fuel documentation is unavailable, all claims for tax paid fuel will be disallowed

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