A hot button topic these days is the question of whether or not your racing ventures are considered commercial or not as described by the Department of Transportation. While the rules might seem clear as mud, in most cases they aren’t as we attempted to explain in this reprint of a story that first appeared in the premiere issue of Drag Racing Edge, March 2016. Be on the lookout for stories on this topic in future print editions of DRE.
The World According to the DOT
Words/Photos John DiBartolomeo
Gray area. Clear as mud. Open for interpretation.
Despite all the talk surrounding the licensing and rules of the road governing the use of trucks and trailers for motorsports, about the only consistent “law” might be all of the above. However, all of the “talk” can simply be applied to the fact that no one seems to know just what is legal and what isn’t, even though in some enforcement officials’ minds there is a clear cut definition. Unfortunately, everyone seems to think they “know” all the answers when in fact few do.
The Specialty Equipment Manufacturer Association (SEMA) recently issued an informational directive through their SEMA Action Network (SAN). SAN is a nationwide partnership with thousands of enthusiasts looking to protect their hobby from legislative threats. The group has extensive lobbying power and has most recently looked into assisting racers in their needs with the licensing and the use of towing combinations.
The group’s directive can be found online at www.semasan.com/page.asp?content=motorsports_trailers&g=SEMAGA. They also hosted a seminar at the Performance Racing Industry Trade Show last December which looked to outline just what are the rules of the road. In attendance were Sgt. Chris Barr and Sgt. Tyler Utterback both of the Commercial Vehicle Enforcement Division of the Indiana State Police; Stuart Gosswein, Sr. Director, Federal Government Affairs for SEMA; Kyle Fickler of Aeromotive Fuel Systems and John DiBartolomeo both of which are racers who regularly travel up and down the road with large rigs and who have both had incidents with regards to DOT regulations.
“Most law enforcement officials are in a very difficult position in knowing whether you are compliant with DOT regulations,” noted Gosswein. There is obviously a motorsports exemption noted in Federal Motor Carrier Safety Administration (FMCSA) manual which it almost appears like every racer has memorized.
Basically it states: § 390.3: General applicability.
(f) Exceptions. Unless otherwise specifically provided, the rules in this subchapter do not apply to—
(3) The occasional transportation of personal property by individuals not for compensation nor in the furtherance of a commercial enterprise;
Question 21: 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 [commercial motor vehicles] 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.
However, there is much more to it than this.
“Generally when citations are issued,” says Gosswein, “they fall into one or both categories. 1) The size of the trailer violated state law; and/or 2) the vehicle/trailer combination was considered ‘commercial’ by enforcement authorities but had not been registered with the U.S. Department of Transportation (DOT) or state-equivalent agency, as required.” But what constitutes “commercial?
When a vehicle is pulled over on the side of the road regardless of whether it’s a race truck/trailer or simply a car, enforcement officials, be them a state or local officer, go through what is termed as the driver interview. The questions asked and their corresponding answers has a lot to do with the outcome of your incident.
“The first thing we’re going to ask is what are you doing with this vehicle on the road,” says Sgt. Utterback. “Where are you going, and so forth. The fact of how it is registered means little. Your activities can still fall into a commercial venture. The type of license you carry and the license plate on your vehicle are not related in any way. The only purpose of the license plate on your vehicle is to register that said vehicle with your state’s agency. In most cases, your particular state’s motor vehicle agency is a private company sub-contracted to perform licensing registration. Mostly their whole purpose is to get from person number 28 to person number 29 in line.”
Any businessman can understand that principle and as such, you can’t expect them to know the proper method for licensing yourself or your vehicle. That in itself does not excuse you from any violations of the law.
“We deal all the time in our office with masons, carpenters, landscapers and the like when it comes to licensing issues,” says Sgt. Barr. “But if there is any segment of the industry that should be in complete compliance with regulations, it really should be motorsports because by the nature of your industry you’re already working with vehicles, whereas the mason is only concerned with getting from one job to the next. However, there is a lot of resistance to it and one of the biggest problems we have is inconsistencies from state to state and so one.”
“A lot of that has to do with having an understanding of just what it is we as enforcement officials have to do when we work,” Utterback added. “The fact that you might have driven right by a set of scales in one state figuring that you should be okay anywhere else is wrong. Maybe you went by that particular scale house because they didn’t want to concern themselves with your type of vehicle or maybe they were busy. It isn’t because you’re exempt but rather the inconsistencies that exist.”
Sgt. Barr said, “While there might be inconsistencies amongst the end users, there really is a pretty clear distinction in our eyes when it comes to the interpretation of the motorsports exemption. The exemption does not apply to anyone in commerce. Commerce has a very basic definition. It is anyone engaging in the furtherance of a commercial enterprise that being making or in the case of motorsports, trading money to earn money.
“That exemption is there for the guy who works every day, bought some bomber that his wife might complain about taking up all the space in their house garage. He works on it day and night and takes it to some local track just hoping to make it to the final round and maybe get $50 and a case of beer. He is truly a hobby racer and that exemption is for him.
“The problem comes in; and there are times when I’m as guilty as the next;” says Barr, “when we have a hard time believing that a person with this; and I’m estimating; $250,000 motorhome and $100,000 trailer full of cars and parts, that when they need an extra $50,000 for a new engine, they’re simply going into Momma’s savings account and pulling it out.”
However, as we pointed out to Sgt. Barr, the majority of racers are in fact using that $250,000 motorhome and $100,000 trailer as their “house on the lake”, “golf game”, “hunting trip”, etc. Still though, should they win any money over the amount of $600, they will receive a federal 1099 tax form; a form they would turn into their accountant. That said accountant will then certainly ask if there are any expenses associated with that income. As a means of reducing your tax implication, they’ll deduct it which now triggers your “golf game” as a business; i.e., a commercial enterprise.
Admittedly, every racer could or should understand that they probably cross the line when it comes to a commercial venture. You could probably explain to an enforcement officer that you only race for trophies, but the fact is that those officers aren’t stupid and shouldn’t be treated as such. There might be some who are using this just for car shows and the like, but we all know we’re racing for money and they do too. The fact that in the overall scheme of things no one is making money by racing as the adage applies that if you want to become a millionaire by racing, you better start out with a billion. That has little to do with whether you have a commercial venture or not.
The unfairness to the system is that as a racer towing your car to a race where a purse is paid, or in the furtherance of a commercial enterprise, you should follow all the rules which includes much of the same regulations as any over-the-road trucker. The unfairness part of it comes in that a 95-year old person can purchase a huge motorhome well over the 26,000-lbs. limit and drive it connected to a trailer all over the country without having to comply with any DOT regulations, simply because he does not fall into the commercial venture area. That doesn’t preclude us as racers from adhering to whatever regulations are on the books.
“In my opinion,” states Sgt. Utterback, “I’m in agreement that if a vehicle is over a certain size regardless of what it’s used for, they should have the exact same kind of training and credentials to operate that vehicle on the roadways. Just because it’s Grandpa and he’s taking Grandma to the Grand Canyon doesn’t make it any safer than the person hauling a race team.”
“There are really only two things you can be pulled over for that will seriously interrupt your trip,” says Sgt. Barr. “One is not having a CDL. If the weight classification of your truck and trailer are over the 26,000-lbs limit or if your trailer has a GVWR of over 10,000-lbs, then a CDL is required. With the lack of a CDL, your rig can get parked and/or receive a fine until a qualified driver holding a CDL can be located.”
Unfortunately, there is a problem when trying to obtain a CDL. Taking the written portion of the test is or should be a no-brainer. However, when it comes time to taking the driving portion some examiners will not allow you to do so unless you take it with a commercially-licensed vehicle, which precludes you from taking the test with a motorhome. Still though, if what you take the test with is what you intend to drive and what you need that CDL for, then by all means you should be allowed to do so. This might take some convincing on your part to the examiner but it is something they should understand.
“The second thing is the lack of a proper log book,” Barr adds. “This can get you parked for a certain amount of time as there are rules governing the allowable length of time you can drive. The other issues such as not carrying a DOT number or fuel permits will usually just involve a citation and expense.”
Of course, not to give anyone any ammunition, the overall length of rig could be another complication to your trip. Fortunately, some states have seen fit to offer over-length permits at very reasonable costs to allow longer trucks/trailers.
Bottom line: The SEMA directive notes “What to do when stopped by the police: Be polite, respectful, respond to requests and avoid being argumentative.”
Seems simple enough.