Dealing with ELD mandate could require a law change
The scenario is common: Thursday through Saturday nights in the warmer months, across most of America, or in Texas year round, you can find an amateur or PRCA rodeo in town. That rodeo likely has competitors from several states.
Most of those timed-event competitors arrived in one ton pickups pulling 28-32 foot four horse trailers with living quarters. There are usually 2-4 horses offloaded from that rig. Most of those competitors have been driving a rig like that since they were 14-16 years old. No one who grew up in ag, or grew up rodeoing thinks anything of hooking up that trailer to their pickup and traveling down the road. However, driving that rig with your standard driver’s license is apparently illegal.
In 1986 the Federal Highway Administration (FHWA) enacted the Commercial Motor Vehicle Safety Act which gave us the Commercial Driver License (CDL) requirements. This act developed testing standards for Commercial Drivers operating Commercial Motor Vehicles (CMVs). What many of the people in the above scenario don’t know, is that the CDL isn’t just for “professional” truck drivers. The law applies to pretty much anyone with a good-sized horse-hauling rig.
It has recently become apparent that a great number of people in the horse industry have been completely unaware of this CDL rule, and have been out of compliance. That begs the question — Why? Why are an obscene number of people in the horse industry unaware of this regulation? Why are they unaware that driving a pickup and horse trailer may require additional licensing?
The Federal Motor Carrier Safety Administration (FMCSA) defines a commercial vehicle as the following:
o Class A: Any combination of vehicles which has a gross combination weight rating or gross combination weight of 11,794 kilograms or more (26,001 pounds or more) whichever is greater, inclusive of a towed unit(s) with a gross vehicle weight rating or gross vehicle weight of more than 4,536 kilograms (10,000 pounds) whichever is greater.*
o Class B: Any single vehicle which has a gross vehicle weight rating or gross vehicle weight of 11,794 or more kilograms (26,001 pounds or more), or any such vehicle towing a vehicle with a gross vehicle weight rating or gross vehicle weight that does not exceed 4,536 kilograms (10,000 pounds).
o Class C: Any single vehicle, or combination of vehicles, that does not meet the definition of Class A or Class B, but is either designed to transport 16 or more passengers, including the driver, or is transporting material that has been designated as hazardous under 49 U.S.C. 5103 and is required to be placarded under subpart F of 49 CFR Part 172 or is transporting any quantity of a material listed as a select agent or toxin in 42 CFR Part 73.
Please note that there is a sticker found on your pickup (it is usually located inside the driver’s side door) and horse trailer (under the gooseneck on the driver’s side). This sticker will tell you what the Gross Vehicle Weight Rating (GVWR) is. On a newer Dodge 4WD 4-Door Dually the GVWR is approximately 14,000 pounds. A typical 4 horse trailer with living quarters will have around 17-18,000 GVWR. Combine them and, you’re well over the 26,001 rule. As you can see, it doesn’t take long to get over that 26,001 rule.
Most rodeo competitors, horse trainers, and even trail riders that drive across the US exploring this great land, fall into the Class A definition of a “Commercial Vehicle.” Does this weight requirement sound arbitrary to you yet? Just wait, it gets better.
But I’m not a “commercial driver.” Or are you?
According to the FMSCA:
Does the exemption in ?390.3(f)(3) for the “occasional transportation of personal property by individuals not for compensation nor in the furtherance of a commercial enterprise” apply to persons who occasionally use CMVs to transport cars, boats, horses, etc., to races, tournaments, shows or similar events, even if prize money is offered at these events?
Guidance: The exemption would apply to this kind of transportation, provided: (1) The underlying activities are not undertaken for profit, i.e., (a) prize money is declared as ordinary income for tax purposes, and (b) the cost of the underlying activities is not deducted as a business expense for tax purposes; and, where relevant; (2) corporate sponsorship is not involved. Drivers must confer with their state of licensure to determine the licensing provisions to which they are subject.
The rule goes further — if you write your truck/pickup or trailer off, if you share expenses with someone you haul with, if you haul a friend’s horse for any sort of compensation, if you have sponsors (especially wraps or stickers on your trailer), if you compete for prizes or money, you’re considered in pursuit of a “commercial enterprise.” Confused yet?
It seems that the IRS and FMSCA are in direct conflict with each other where this rule is concerned for most people.
The IRS distinguishes between a hobby or business activity by taking into account the “facts and circumstances with respect to the activity.” One factor doesn’t make the case. Further, the IRS allows deductions for hobbies:
Within certain limits, taxpayers can usually deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is appropriate for the activity.
Their rule states:
You must generally consider these factors to establish that an activity is a business engaged in making a profit:
o Whether you carry on the activity in a businesslike manner.
o Whether the time and effort you put into the activity indicate you intend to make it profitable.
o Whether you depend on income from the activity for your livelihood.
o Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
o Whether you change your methods of operation in an attempt to improve profitability.
o Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
o Whether you were successful in making a profit in similar activities in the past.
o Whether the activity makes a profit in some years and how much profit it makes.
o Whether you can expect to make a future profit from the appreciation of the assets used in the activity.
The average barrel racer, team roper, or rodeo competitor doesn’t depend on the income from that activity for their livelihood. They don’t “intend” to make it profitable. It doesn’t always make a profit, and the assets don’t always appreciate. In fact, a trailer depreciates, a pickup depreciates and the argument could be made that horse depreciates at a certain point too! However a DOT officer could decide that someone who trains horses, raises horses, or ranches for a living is involved in a commercial venture and they are subject to the CDL/ FMCSA mandate, and anecdotal evidence of such can be found with a few clicks of the mouse via Google.
DOT officers aren’t expecting you to carry your tax returns with you, so again, the line between a “commercial venture” and “hobby” is pretty hard to prove on the side of the road or at the scale.
However, the water can get really muddy if say, you sell a product at a barrel race, and load it into your trailer that you use for your “hobby.” According the the DOT officers interviewed for this article, that puts you squarely into the “commercial vehicle” category. I suppose the same could be said for me as a photographer if I’ve packed my camera into my pickup because I plan to take photographs at the barrel race, or of a client while I’m on the road.
But I don’t drive for a living, so why am I considered a professional driver subject to CDL licensing?
This is the question countless people in the horse industry, as well as horse-hobby enthusiasts are currently asking themselves. According to Captain Broers from the South Dakota Highway Patrol, the law “ropes” in people that it’s not directly intended to affect. And because Ag has gotten so many exemptions for so many years, most people just figure “I’m in ag, so I’m exempt.” Until now, for the most part the DOT has left them be. Whether that will remain the case, is still up in the air. Getting a straight answer from anyone with the DOT is a bit like trying to find wolf teeth on a mare.
Captain Broers says they’re not after the person going to a few rodeos a year for fun – but if you have a sponsor plastered all over your trailer, you might want to be in compliance. Better safe than sorry, right?
Going further – since your horse hauling rig may be heavy enough to “technically” require you to have your CDL, you have likely been required to utilize a log book. And now, that log book is electronic (referred to as an e-log or Electronic Logging Device – ELD). If you were supposed to be keeping a log-book prior to this mandate the ELD is for you. The log book is designed to track your Hours of Service and the ELD is supposed to take the place of the paper log book, but.
Many people who should have been keeping a log-book weren’t so this isn’t really something new. Again, I’d like to know why no one knew that if you were traveling to rodeos you should be keeping a log-book.
Who must comply with Hours of Service – The FMCSA says:
Most drivers must follow the HOS Regulations if they drive a commercial motor vehicle, or CMV.
In general, a CMV is a vehicle that is used as part of a business and is involved in interstate commerce and fits any of these descriptions:
o Weighs 10,001 pounds or more (which means that every late model dually pickup qualifies)
o Has a gross vehicle weight rating or gross combination weight rating of 10,001 pounds or more
o Is designed or used to transport 16 or more passengers (including the driver) not for compensation
o Is designed or used to transport 9 or more passengers (including the driver) for compensation
o Is transporting hazardous materials in a quantity requiring placards
What does an ELD do?
An ELD syncs with the computer of your vehicle’s engine, and logs the time, distance, speed etc.
Hours of service rules indicate that when driving you can drive for 11 hours in a 14 hour period, and you must, after 8 consecutive hours, take a 30 minute break. At the end of your day, you’re required to take a 10 hour break.
Now, should you run out of hours before you reach your final destination, the ELD won’t shut down your rig, but it will record the infraction.
According to drivers currently using e-logs (ELDs) the infraction can be noted in the device (you may give a reason for the overage — such as, I needed to get to a safe place to sleep etc…). However, the infraction can get the driver cited by the next DOT scale officer should he chose to say, “you broke the rules.”
The argument in favor of ELDs is that they keep “commercial drivers” from cheating their log-books, because paper log-books allow more flexibility for the sake of safety.
From the American Horse Council:
“The livestock sector has consistently been one of the safest of the commercial hauling sectors. The Large Truck Crash Causation Study, conducted by the Federal Motor Carrier Safety Administration (FMCSA) and the National Highway Traffic Safety Institute, showed that of 1,123 accidents involving trucks hauling cargo, only five involved the transportation of livestock. Similarly, the report titled Trucks Involved in Fatal Accidents Fact-book 2005, conducted by the Transportation Research Institute, shows that livestock transporters accounted for just 0.7 percent of fatal accidents. The ELD mandate itself, which is the subject of this petition, does nothing to improve that record of safety over paper logs.”
Well, surely there are exemptions to CDL requirements and ELDs?
Yes, and in case you weren’t already confused enough, they’re a convoluted mess. Protect the Harvest did a good job breaking them down:
Drivers transporting ‘agricultural commodities,’ including livestock, are exempt from the Hours of Service regulations while operating within 150 air-miles (this equates to 172.6 driving miles) of the source of such commodities. Vehicles and drivers are exempt if they are not:
o Hauling farther away than 150 miles and not more than 8 days in a 30 day period. To put this in perspective, if you travel to a horse show, and are driving more than 150 miles to reach the show-grounds, your trip there and back counts as driving days. If you stay in a hotel instead of on the showgrounds, any driving to the show-grounds counts as days. In this light, it is pretty easy to consume the 8 days in a 30 day period if you attend more than one horse show during that time, or go to horse shows that last an extended period of time. If you are traveling to horse shows frequently, and drive a dually with a 4+ horse trailer, you are more than likely to fall into the classification where an ELD is required on your vehicle. (Because technically you should have been keeping a log-book prior to this as I understand it).
o Drivers of vehicles manufactured before 2000 are not required to implement an ELD.
o Drivers will be required to use an ELD if they use a paper log more than 8 times in a rolling 30 day period. (Exceed 12 hours or more than 100 air miles from terminal). Once a driver has exceeded that threshold, they’ll have to drive an ELD equipped truck until their 30 day record drops to 8 or less paper log events.
Short haul vehicles are exempt from the ELD Mandate. There are a few key components required to meet the FMCSA definition for short haul.
o Start and return to same location within 12 hours of duty time
o Drive no more than 11 hours
o Have ten consecutive hours off between shifts
o Maintain your time clock function. Meaning, employees who are on the clock, punching in and out for work.
o Not exceed a 100-mile radius from your starting location
Based on the air-miles “exemption” I cannot even take my horse to the vet, here in my home state of South Dakota, without being out of compliance with the laws. My vet is about 195 miles from the house.
While the CDL requirements are not new, and the log-book requirements aren’t new, the ELD mandate is. This mandate doesn’t change whether or not you’ve been required to have your CDL or keep a log-book. What it may do is change the level of enforcement (for those that were not previously harmed or aware of the regulations) that each state’s DOT or Highway Patrol officers utilize.
If these laws and this ELD mandate are really about safety, then either everyone should have a CDL — even those who don’t drive trucks — as a very valid argument could be made that those are the folks that cause the most accidents — or only those who drive big trucks, whether for ag, close to home, or not should have one. It is seemingly arbitrary, to me, that I could theoretically haul bulls to the sale barn 100 miles away, in a trailer that weighs more than the one I haul down the road to rodeo in, and not need a CDL, but if I want to go farther than that 150 miles, I need to have a log-book and a CDL. The 150 air mile exemption equates to roughly 172.5 actual driving miles, which means I can’t even take my horse to the vet I want to see and still be compliant without getting a CDL and keeping a log-book for the miles traveled over the acceptable radius.
If you’re concerned about these regulations and rules you should first contact your state’s DOT officer with any questions you have. Do not be surprised if you get different answers from everyone you talk to — clearly, the regulations make the water really muddy. Second, call your senators, and congressmen at both the state and local levels, and please file your complaints and comments if you have them. Laws are always open to interpretation but if you’re like me, you read through these and think to yourself, “these make no sense, so how are these to be enforced? Why am I lumped in with commercial drivers when I don’t drive for a living?” I had hoped to find the answers to these questions — instead I found myself more perplexed than ever, and still continue to ask myself, “why?” How did I go through 30+ years of rodeoing, and NOT know that I was considered to be a “commercial driver that had to keep a log book when I haul to rodeos for FUN?”
In case you’d like to get involved and let your voice be heard, there are several lobbying groups working on this issue:
If you’ve been subject to fines, or held up because you were not properly “certified” to drive your rig, I’d certainly love to hear from you — as would Protect the Harvest.
I’m hoping this helps you sort out the regulations as they’re currently written, and maybe gets you fired up to help change things as they currently stand – you know like the seemingly arbitrary weight requirement for what constitutes a CMV. I don’t know about you, but I’d prefer to not be fined, held up, or forced to stay home simply because I want to spend my summer weekends rodeoing.