Transportation, Distribution and Logistics Alert -- Act 13: Distributing The Cost Of Increased Road Deterioration

by McNees Wallace & Nurick LLC

[authors: Barbara A. Darkes and James J. Franklin]

Anyone who has traveled on a Pennsylvania highway knows that road deterioration and maintenance issues are a significant concern in the Commonwealth. Indeed, for many years various studies and surveys have ranked Pennsylvania as having the worst roads of any state in the country. Unfortunately, the boom in Marcellus Shale exploration and development has only worsened this problem. Specifically, PennDOT has noted that hauling associated with the Marcellus Shale industry has caused a significant increase in the number and frequency of heavy loads using state roads and secondary routes. In many cases, these roads and routes simply do not have the structural integrity to support such heavy loads at this increased frequency, which has caused accelerated deterioration of these roads and amplified the amount of resources required to maintain them.

In an effort to reduce this impact and pay for the increased maintenance costs, Pennsylvania has seen a 68% increase in the number of state routes posted with weight restrictions. As a result, almost ¼ of all state routes have posted weight restrictions, and that percentage increases every day. Typically any hauler who utilizes a route with a load that exceeds the posted weight restrictions will have to bond that route, thus making them partially financially responsible for the increased damage and maintenance costs caused by their use. One consequence of this scheme, however, is that haulers, local businesses, and other local traffic that have operated on these routes for years without restriction or bonding requirements now find themselves having to share in the excess financial burden and responsibility supposedly attributable to Marcellus Shale related activity.

Governor Corbett became increasingly concerned that these traditional haulers and local traffic were shouldering a disproportionate share of the financial maintenance burden. In response, earlier this year the Governor signed Act 13 into law. The purpose of Act 13 is to provide a temporary scheme by which PennDOT can better identify and distinguish between those over-posted-weight haulers that cause significant damage to the Commonwealth’s highway system from those over-posted-weight haulers that cause minimal road damage.

Act 13 attempts to accomplish this goal in three ways. First, the existing law and regulations that allow for vehicles to self-certify as “local traffic,” have been maintained. Essentially, if a hauler or driver can only get to its destination via a posted road, even if that is its own commercial establishment, it may not have to bond the road. If a hauler or driver meets this “local traffic” definition, it will not obtain any formal approval from PennDOT, but it should carry documentation proving its origination and/or destination. Businesses who believe they meet this definition should educate their drivers and suppliers on this exemption so that they can better communicate with law enforcement during any stop and hopefully avoid a citation. Additionally, businesses should be alert for any notice from PennDOT that it has made a determination that the vehicles over the posted weight being driven to your location are likely to damage the highway. PennDOT is authorized to do so and such a determination, which must be provided in writing, effectively destroys the local traffic exemption.

Second, Act 13 allows haulers to apply for a letter of local determination if their business activity falls within an “at-risk” industry, meaning that the industry has suffered a 20% decline in employment since 2002. The U.S. Census Bureau maintains a list on its website of industries that fall within this category. If a hauler does meet this definition, they can apply to PennDOT for a letter of local determination, which will generally allow them to utilize the necessary posted routes without any bond requirement.

Third, under Act 13, haulers can also obtain a letter of local determination if PennDOT deems them a “de minimis” hauler. By “de minimis,” Act 13 means a hauler determined not likely to cause damage to a particular posted road. PennDOT has a list of criteria it uses to make this determination, including the weight and frequency of the hauler’s anticipated loads and the structure and integrity of the posted route in question. If satisfied that the hauler meets this definition, PennDOT will issue the letter of local determination, though PennDOT may place limits on the hauler’s activity, including the number of loads the hauler may take on the route in a given time period. If a hauler receives a de minimis letter, it may utilize the necessary posted routes without any bond requirement. A hauler may obtain a letter under both the at-risk industry and de minimis standards.

If a hauler receives a letter of local determination, it must make sure to carry that letter with them at all times while traveling on those posted routes. The hauler should also still carry documentation establishing its destination. Pursuant to the Act, the maximum effective period of any letter is 12 months, with PennDOT determining the specific effective period of any given letter. Notably, Act 13 precludes hauling related to “unconventional oil and gas development” – think Marcellus Shale-related activity – from qualifying as local traffic and from receiving a letter of local determination under either standard. Currently, Act 13 is scheduled to remain in effect through the year 2015.

Act 13 may provide significant benefits to haulers that satisfy its standards and definitions. Haulers should use caution, however, as the Act’s provisions contain several detailed requirements and restrictions.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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