Cost-Benefit Analysis

In performing a cost-benefit analysis, each rulemaking entity must provide the information requested for the cost-benefit analysis to be considered a good faith effort. The cost-benefit analysis must be submitted to the Office of Policy, Research and Regulatory Reform at least five (5) days before the administrative hearing on the proposed rule. For all questions, please attach all underlying data that supports the statements or figures stated in this cost-benefit analysis.

Department: / Revenue / Agency: / Motor Carrier Services Division - CDL Compliance
CCR: / 1 CCR 204-12 / Date: / 7/22/08
Rule Title or Subject:
Driver's License (CDL) Program

Benefits of the Proposed Rule(s)/Amendment(s)

1. / Please provide the statutory authority, and detailed statements indicating the need for the proposed changes. (This statement should include specific issues such as specific changes in statutes or the subject matter area, market failure, a compelling public need, risks to the health, safety or welfare of Coloradoans, lack of efficient and effective performance of an important government function, or other specific problem(s) that are being addressed by the proposed rule(s).) Please include the number of complaints you received (if any) that spurred you to take regulatory action.
Statutory authority: §§42-2-403, 42-2-406, 42-2-407, CRS. In the 2008 legislative session, Senate Bill 59 was passed to increase the dollar amount Third Party Testing Unit can charge a driver for the CDL Skill Tests.
Because the current rules only require a tester to provide two tests per year, the CDL Compliance section was encountering a number of Third Party Testers who did not have sufficient knowledge and experience in administering tests. The CDL Compliance section determined, through its audits of testers, that the requirement of the testers to administer at least two tests per year is not sufficient and jeopardizes the safety and welfare of the motoring public. Based on this information gained through the audits of testes, the requirement is being adjusted through this rule change to administer a minimum of four CDL tests annually.
2. / Please list the top three benefits of the proposed regulation; explain how the proposed regulation results in the expected benefits; and if the proposed regulation reduces or eliminates the problem(s) listed above.
By increasing the amount of tests required by testers to perform annually, this would increase the testers' knowledge and experience in administering CDL tests. The benefit will be that testers will not pass drivers that do not qualify to have a CDL, thus improving the safety and welfare of the motoring public.
3. / What, in your estimation, would be the consequence of taking no action, thereby maintaining the status quo?
No action may result in a tester passing drivers that are not qualified because the tester only administers two tests annually. This minimal requirement does not give the testers a minimal requirement that provides to them enough ongoing experience and practice in administering the tests, which is reflected in audits performed by the CDL Compliance Section.
4. / Please describe market-based alternatives or voluntary standards that you considered in place of the proposed regulation and state the reason(s) for not selecting those alternatives. How many small businesses did you talk to about the proposed regulation?
A voluntary standard would not be applicable, and there is no market-based alternative. Under federal law, any third party tester would be required to meet the requirement of the law. The federal regulations require an annual audit of each testing unit, which includes testers. If a tester has a minimal requirement, or a voluntary minimal requirement for the number of tests to be administered, the likelihood of the tester having enough experience giving tests to pass an audit is lessened if the tester does not administer a test frequently enough to meet all the federal requirements. Through audits conducted by the CDL Compliance Section, the Section was able to determine that those testers that complete a minimum of two tests per year were not properly administering the test, and therefore failing the audit. The Section has determined that requiring a minimum of four tests to be administered per year improves the tester's likelihood of passing the audit. If the tester does not properly administer a test, that means that a commercial driver's license may be issued to a person who has not properly demonstrated the necessary skills to operate a commercial vehicle, which has the potential of weighing 80,000 pounds or more, properly and safely.
While conducting audits, the Section discussed requiring the testers to have a higher minimum number of tests to be completed each year to ensure their ability to successfully administer the test. Most testers were in agreement that the minimum should be higher.

Impact of Proposed Rule(s)/Amendment(s)

5. / Please describe the government costs to be incurred because of the proposed regulation (Examples include collection; paperwork; filing; record keeping; audit, inspection and training costs, etc.), and state your estimates (in dollars) of the costs that will be incurred.
None. Audits are required annually; this does not change the number of audits.
6. / Please provide the number and types of entities or small businesses that will be required to comply with the proposed rule(s). Please provide the source of data used (i.e., program data, NAICS code statistics, etc.).
All Third Party Testers that are licensed within a CDL Third Party Testing Unit will have to adhere to the new requirement. There are 170 testing units, and 580 testers within those units, that are licensed by the department to conduct CDL tests.
7. / Does the proposed regulation create barriers to entry (i.e., licensing, permit or educational requirements)? If so, please describe those barriers and why those barriers are necessary.
To qualify for a license, the testers must attend 40 hours of training that includes training for administering the CDL skill tests. The testing unit must enter into a contract with the department. These requirements existed under previous rule. The amended rule will require a tester, once qualified, to provide a minimum of four tests per year, or that tester's license will be cancelled. These barriers are necessary to ensure that testing units and testers meet the requirements of the federal and state law to provide CDL skill tests to CDL applicants, thereby ensuring that CDL holders in Colorado can properly and safely operate a commercial vehicle.
8. / Explain the additional requirements with which small business owners will have to comply (i.e., will they need to purchase new equipment or software to meet the requirement(s); are there training costs; are there new disclosure/filing requirements they will have to provide to the state; are there transactional costs, paperwork costs, record keeping, etc.). Please state your estimates (in dollars) of the compliance costs by types listed.
Same as number 7 - the additional requirement is that testers will have to administer a minimum of four tests per year.
There should be no additional cost for this level of compliance.
9. / Please state whether the proposed regulation contains different requirements for different sized entities or different geographic regions, and explain why this is, or is not, necessary. (For example, an audit fee (as a percentage of assets) for a bank examination is lower based upon a higher level of assets due to marginal cost savings and water usage is more restricted in geographic regions with less water storage or supplies because demand far outpaces supply.)
All testers will be required to comply statewide.
10. / Please describe your understanding of the ability of small business owners to implement changes required by the proposed regulation, and state the average estimated cost of implementation. (For example, if a proposed rule required all business in a particular sector to utilize a specific software application, a small business owner may have a difficult time implementing the software if the software is expensive to purchase or if their existing computers are not able to run the software.)
None.
11. / Please state if the proposed regulation will force the cessation of business by any existing businesses, and the impact the cessation will have on the economy including but not limited to the number of employees losing their jobs, the economic losses by the businesses and the estimated economic ripple the cessation will have on suppliers, consumers or buyers.
A tester may lose his or her license if the tester does not complete the requisite minimum number of tests per year, however, the testing unit, would still be allowed to operate, so long as they had other testers to provide tests. Testing units must have a least one tester, but some testing units may have up to ten testers; there is no maximum amount of testers that a testing unit may have.
12. / Does the proposed regulation restrict consumer choice (i.e., availability of goods or services; price increases; etc.)? If so, please describe those restrictions.
No impact unless a CDL Third Party Testing unit decides to opt out of the program.
13. / Please state the estimated impact (in dollars) the proposed regulation will have on sales, employment or tax revenue.
None
14. / Please identify all other small business sector(s) that the proposed regulation(s) may impact, and state the estimated financial impact the proposed regulation will have on each small business sector.
None.

Thank you for your time and effort.