CDL Ruling Favorable To Farmers

CDL Ruling Favorable To Farmers

Federal transportation officials assure farmers that operators of farm vehicles are not subject to Commercial Driver's License requirements.

By ERIN HERBOLD-SWALWELL

Under federal legislation enacted in 1935 and 1984, Congress gave the U.S. Secretary of Transportation the authority to issue rules and regulate a motor carrier's operating equipment, including authority to develop minimum state standards for operation of commercial motor vehicles. Thus, the Commercial Driver's License (CDL) was born.

Under another federal law, the Commercial Motor Vehicle Safety Act of 1986, state governments have the authority to waive CDL requirements for ag producers who drive farm equipment short distances on public roads.

On May 31, 2011, a sub-agency of the Federal Department of Transportation (DOT), issued a notice "seeking public comment" on three issues relating to safety regulations for operators of farm vehicles. Many in the ag industry interpreted the DOT's notice as an attempt to require CDL's for operators of ag equipment. The DOT received a large number of responses and the agency extended the public comment period to Aug. 1, 2011. During that time, the agency received nearly 1,700 comments from farm organizations, state governments, farmers and politicians.

Wanted public comment on three areas applying to farmers

The notice posted by the federal DOT sought public comment on three areas that apply to farmers. The sub-agency asked for "additional guidance" to explain:

* The distinction between intrastate (movement in state) and interstate commerce (movement between states) in the ag industry;

* The distinction between indirect and direct compensation in deciding whether the operator of a farm vehicle is eligible for the state CDL exception;

* Whether "implements of husbandry" should remain exempt from federal safety regulations.

Farmers worried about DOT possibly changing CDL rules

The notice spurred concern from the ag community. Was the DOT attempting to classify farmer's operating under a share-cropping arrangement as contract carriers? Would all of those operating "implements of husbandry" no longer be exempt from CDL requirements?

People who commented overwhelmingly responded that the movement of grain or other commodities from a farm to an elevator isn't interstate commerce because the farmer has no knowledge of the final destination of the commodity-whether or not it will move out of the state. Other ag groups noted that CDL's are only available for operators above a certain age. So, requiring a CDL, in this instance, would limit the involvement of younger family members in the farming operation.

Federal transportation officials respond to farmer concerns

Federal DOT officials responded to these concerns by assuring farmers that operators of farm vehicles are not subject to CDL requirements.

On August 10, 2011, amid public pressure, the federal DOT issued further "regulatory guidance" stating that it had determined that no further action was necessary to "interpret" the issues it posed in its notice--essentially the DOT is backing away from the issue.

In response to the first issue, the DOT determined that clarification of the distinction between intrastate and interstate commerce wasn't necessary, and that further "guidance" would not be helpful to the ag industry.

As to whether a crop-share tenant is susceptible to regulation as a "contract carrier" under federal rules, the agency agreed that most tenants should not be considered contract carriers. The agency referenced the "principal business" test to determine whether a tenant may be required to obtain a CDL. If the driver's principal business isn't transportation (as is the case with most crop-share tenants) then the driver should qualify for the federal exemption.

Finally, the agency addressed the "implements of husbandry" issue. The DOT took the defensive, here, and stated they never intended to extend the definition of "commercial motor vehicles" to ag implements. Essentially, DOT found that uniform guidance on the definition of ag implements would be hard to regulate and should be left to the states.

In the end, the agency said the response from the ag community helped them understand the "complexity of today's farm lease arrangements" and the use of ag equipment on public roads.

CALT accepting registrations for Farm Income Tax Schools

In other news from the ISU Center For Ag Law and Taxation, CALT is now accepting registrations for the annual Farm Income Tax Schools in October, November and December. See the website www.calt.iastate.edu for registration information. Continuing education credits are available for ag professionals, including attorneys, CPA's, enrolled agents and insurance and real estate professionals.

NOTE: Erin Herbold-Swalwell is the staff attorney for Iowa State University's Center for Ag Law and Taxation at Ames. If you have questions, you can contact her by email at [email protected] or by phone (515) 294-6365. She writes a column called "Legal Issues" in Wallaces Farmer magazine each month.

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