Three Financial Issues Contractors Should Be Aware Of
April 2013
April 2013
Bonus Depreciation
Bonus depreciation is an additional amount of depreciation that can be used when purchasing new vehicles or equipment. For new assets placed in service from Jan1, 2012 through December 21, 3013, companies can receive a 50% bonus depreciation. The remainder would be depreciated according to a normal depreciation schedule. Qualified assets include any new tangible property recover of 20 years or less. Bonus depreciation is especially useful for asset purchases that exceed $2 million.
Purchases that fall under the $2 million threshold are eligible for the Section 179 Expense. This tax code allows a company to deduct rather than depreciate asset purchases for 2012 and 2013. Where the bonus depreciation must be used for new purchases, Section 179 can be used towards used purchases. Up to $500,000 of purchases can be deducted. As the purchase amount exceeds $2 million, the deduction phases out dollar-for-dollar.
Research & Development Tax Credit
While the Research & Development Tax Credit may seem odd for contractors to claim at first glance, it is possible. The tax credit can be applied to any situation where the company is using a new method for the first time as a business, and the company is “at risk.” This could include a design-build project, which can be done on both the building and highway side of construction. The tax credit is based on the labor wages that go into the project, and can go back at least three years.
In order to receive the credit, an engineering audit must be performed. The audit must be completed by a professional firm who specializes in such a study, however, it may be worthwhile if the project wages associated with the research were significant in size.
Manufacturers’ Deduction
The manufacturers’ deduction is another tax savings that contractors and associated construction businesses can use. The goal of the tax deduction is to encourage U.S. manufacturing, but it can also be applied to non-manufacturing activities. The allowable non-manufacturing activities include construction, engineering, architecture, computer software production, etc. It applies to the construction activity only, or the actual production of a building, road, etc. The deductible amount is 9% of the lesser of qualified production activities income or taxable income, limited by W-2 wages paid.
Bonus depreciation is an additional amount of depreciation that can be used when purchasing new vehicles or equipment. For new assets placed in service from Jan1, 2012 through December 21, 3013, companies can receive a 50% bonus depreciation. The remainder would be depreciated according to a normal depreciation schedule. Qualified assets include any new tangible property recover of 20 years or less. Bonus depreciation is especially useful for asset purchases that exceed $2 million.
Purchases that fall under the $2 million threshold are eligible for the Section 179 Expense. This tax code allows a company to deduct rather than depreciate asset purchases for 2012 and 2013. Where the bonus depreciation must be used for new purchases, Section 179 can be used towards used purchases. Up to $500,000 of purchases can be deducted. As the purchase amount exceeds $2 million, the deduction phases out dollar-for-dollar.
Research & Development Tax Credit
While the Research & Development Tax Credit may seem odd for contractors to claim at first glance, it is possible. The tax credit can be applied to any situation where the company is using a new method for the first time as a business, and the company is “at risk.” This could include a design-build project, which can be done on both the building and highway side of construction. The tax credit is based on the labor wages that go into the project, and can go back at least three years.
In order to receive the credit, an engineering audit must be performed. The audit must be completed by a professional firm who specializes in such a study, however, it may be worthwhile if the project wages associated with the research were significant in size.
Manufacturers’ Deduction
The manufacturers’ deduction is another tax savings that contractors and associated construction businesses can use. The goal of the tax deduction is to encourage U.S. manufacturing, but it can also be applied to non-manufacturing activities. The allowable non-manufacturing activities include construction, engineering, architecture, computer software production, etc. It applies to the construction activity only, or the actual production of a building, road, etc. The deductible amount is 9% of the lesser of qualified production activities income or taxable income, limited by W-2 wages paid.
Press Releases
➢ 2013 AGC Presidential Induction
➢ 2013 Board of Directors Induction
➢2013 AGC Appreciation Award Recipient
Contact AGC of NH with any questions regarding these releases.
Gas Tax Increase Moves to Senate
March 2013
March 2013
By a vote of 205 to 158, the New Hampshire House voted to pass House Bill 617. This is the final House vote, and the bill will now head to the Senate, where it faces steep opposition.
The House Ways & Means Committee amended the bill to make it more palatable prior to going before the full House for the second time. The Committee amendment reduces the overall increase from 15 cents to 12 cents, which means it will increase 4 cents over three years for gasoline and 2 cents over six years for diesel. In addition the Committee added an amendment restricting the use of the funds earned from the increase.
Criticism of how the gas tax revenue was used was raised during the first session. Some believed that the revenue was being diverted for purposes other than road maintenance, as funds go towards the State Police, Fish & Game, and the Department of Economic Development. The Committee voted to pass an amendment that states than any revenue earned above the current 18 cent gas tax can only be used for the purposes of infrastructure maintenance. This amendment ensures that the roads and bridges receive the attention they need, without defunding other departments.
To read the House Version of the bill, click here.
The House Ways & Means Committee amended the bill to make it more palatable prior to going before the full House for the second time. The Committee amendment reduces the overall increase from 15 cents to 12 cents, which means it will increase 4 cents over three years for gasoline and 2 cents over six years for diesel. In addition the Committee added an amendment restricting the use of the funds earned from the increase.
Criticism of how the gas tax revenue was used was raised during the first session. Some believed that the revenue was being diverted for purposes other than road maintenance, as funds go towards the State Police, Fish & Game, and the Department of Economic Development. The Committee voted to pass an amendment that states than any revenue earned above the current 18 cent gas tax can only be used for the purposes of infrastructure maintenance. This amendment ensures that the roads and bridges receive the attention they need, without defunding other departments.
To read the House Version of the bill, click here.
Bill To Exclude Truck Drivers From Workers' Compensation Retained
March 2013
March 2013
By a vote of 11-9, the House Labor, Industrial & Rehabilitative Services Committee voted to retain House Bill 203. House Bill 203 was proposed by AGC of NH to exclude truck drivers with deliveries going to and from job sites from needing workers’ compensation coverage. Current law owner-operator truck drivers are not required to have workers’ compensation. However, if making deliveries to state projects, these same truck drivers are required to have workers’ compensation. The bill would have corrected this confusion.
The bill passed its original committee, the House Public Works & Highways Committee unanimously in late January. The bill was then sent to the full House, which passed it through a majority voice vote. However, rather than being sent to the Senate, a request was made to refer the bill to the Labor, Industrial and Rehabilitative Services Committee. Opponents of the bill were concerned with excluding individuals on construction job sites from workers’ compensation requirements. Referring the bill to the Labor Committee would provide opportunity for further discussion on the bill.
The Committee will discuss the bill over the summer months. The bill may then be re-introduced in the next legislative session.
The bill passed its original committee, the House Public Works & Highways Committee unanimously in late January. The bill was then sent to the full House, which passed it through a majority voice vote. However, rather than being sent to the Senate, a request was made to refer the bill to the Labor, Industrial and Rehabilitative Services Committee. Opponents of the bill were concerned with excluding individuals on construction job sites from workers’ compensation requirements. Referring the bill to the Labor Committee would provide opportunity for further discussion on the bill.
The Committee will discuss the bill over the summer months. The bill may then be re-introduced in the next legislative session.
Gas Tax Increase Passes House Committee
February 2013
February 2013
HB 617, as sponsored by Representative David Campbell, unanimously (18-1) passed the House Public Works and Highways Committee on February 21. The bill proposes to raise the gas tax 15 cents over four years ($0.04 2014, $0.04 in 2015, $0.04 in 2016, and $0.03 in 2017). The diesel fuel tax will also increase 15 cents, but over six years for a more gradual implementation.
It is projected that this increase will earn the state approximately $1 billion over the next ten years. This revenue will be constitutionally protected from being diverted for uses other than infrastructure repairs.
Infrastructure repair is the key driver of this legislation, as New Hampshire's transportation system is currently facing significant challenges. More than 1/3 of roads are in poor condition, and more than 1/3 of bridges are considered functionally obsolete or structurally deficient.
Revenue is not sufficient to meet the needs of the transportation system, as the state Department of Transportation estimates there is an annual $74 million shortfall in funding to address transportation needs. The Department has been working with revenue levels from 1991, the last year the gas tax was raised, and thus as prices and inflation rise the purchasing power of the revenue has eroded.
The bill will now go before the full House on February 27. If it passes, it will move to the House Ways and Means Committee.
It is projected that this increase will earn the state approximately $1 billion over the next ten years. This revenue will be constitutionally protected from being diverted for uses other than infrastructure repairs.
Infrastructure repair is the key driver of this legislation, as New Hampshire's transportation system is currently facing significant challenges. More than 1/3 of roads are in poor condition, and more than 1/3 of bridges are considered functionally obsolete or structurally deficient.
Revenue is not sufficient to meet the needs of the transportation system, as the state Department of Transportation estimates there is an annual $74 million shortfall in funding to address transportation needs. The Department has been working with revenue levels from 1991, the last year the gas tax was raised, and thus as prices and inflation rise the purchasing power of the revenue has eroded.
The bill will now go before the full House on February 27. If it passes, it will move to the House Ways and Means Committee.
AGC Starts 2013 Legislative Session
January 2013
January 2013
AGC of NH has started preparation for the 2013 Legislative Session. The newly elected legislators have been inducted and are also preparing to start the work of constructing new laws and amending existing laws. Key for AGC of NH will be identifying the bills that will have the biggest impact on the commercial construction industry. The Association's Legislative Committee recently took that challenge head on as they reviewed a number of bills, deciding which should take priority over others.
Moving further into January, the Association's topic specific committees will dive even deeper into the pool as they analyze the various environmental, building, highway, human resources, or business impact the bills could have. From an initial cursory review there will be some important topics, such as funding, that the Association will be taking the lead on, while with others a strong defense will be just as important.
Other bills may require a wait and see action, as many of the legislators are new this year. It will be important for the Association to gauge how well these legislators understand the importance of the construction industry and how potential legislation affects this industry.
Moving further into January, the Association's topic specific committees will dive even deeper into the pool as they analyze the various environmental, building, highway, human resources, or business impact the bills could have. From an initial cursory review there will be some important topics, such as funding, that the Association will be taking the lead on, while with others a strong defense will be just as important.
Other bills may require a wait and see action, as many of the legislators are new this year. It will be important for the Association to gauge how well these legislators understand the importance of the construction industry and how potential legislation affects this industry.
Ken Simonson Presents NH Construction & Materials Outlook
June 2012
June 2012
AGC of America's Chief Economist, Ken Simonson, spoke with members at the June 14 Spring Dinner about New Hampshire's Construction and Materials Outlook. He said that the industry is improving, but the funding shortfall in the public sector is impeding growth and a stronger recovery. There are some bright spots in the industry: power and manufacturing construction in the private sector are helping to bolster the industry. He summarized the trends for 2012 as the following:
To view Ken Simonson's full presentation, click here.
To view a fact sheet on NH construction economics, click here.
- Private non residential spending will increase 10% to 15%, led by power, pipelines, manufacturing, warehouse, hospitals, and private higher education.
- Public spending with either remain level, or decrease by 5%.
- Residential construction will be dominated by multifamily housing as individuals look to move into city centers to take advantage of public transit, bike paths, and shorter commutes. This sector is projected to increase 5% to 12%.
- Total construction spending should increase 5% to 12%.
- Material costs will rise 4% to 9%.
- Labor costs will increase 1.5% to 2.5% as companies begin to rehire and seek out experienced employees.
To view Ken Simonson's full presentation, click here.
To view a fact sheet on NH construction economics, click here.
Highway Spec. Discusses Anchor Rods
May 2012
May 2012
At the last meeting of AGC of NH’s Highway Specification Committee, the Department of Transportation (DOT) proposed a new supplemental specification on anchor rods. The supplemental specification amends Section 615 and addresses (1) the design criteria for new cantilever and full span bridge overhead traffic sign structures and bridge mounted sign supports, and (2) the installation and pretensioning procedures of overhead sign structure anchor rods for double-nut joint moment connections (i.e. the base plate stands off from the concrete foundation, bears on leveling nuts, and is secured by top nuts).
The DOT highlighted the following areas as the major changes:
• The distance from the top of the concrete footing to the bottom of the sign structure base plate shall b e the nut height plus 1-inch (preferred) or nut height plus the anchor rod diameter (maximum). Note: the nut height equals the rod diameter.
• Ultrasonic Testing: The Contractor shall ultrasonically test (UT) the installed anchor rods using straight-beam transducers to verify the absence of flaws. The Department will reject, and shall require replacement of, the entire base installation if reflectors are found with an indication rating of less than 15 decibels. All costs associated with replacing the base installation, if rejected, will be borne by the Contractor.
The Highway Specification Committee will be discussing this issue at their next meeting on June 6. AGC of NH is looking for member input on this supplemental specification and asks that you forward any comments to Bobbie Caradonna at bcaradonna@agcnh.org by the June 6 meeting. Any member who would like to be involved in the discussion is welcome to attend the meeting. Please contact AGC for details.
Click here to read the supplemental specification.
The DOT highlighted the following areas as the major changes:
• The distance from the top of the concrete footing to the bottom of the sign structure base plate shall b e the nut height plus 1-inch (preferred) or nut height plus the anchor rod diameter (maximum). Note: the nut height equals the rod diameter.
• Ultrasonic Testing: The Contractor shall ultrasonically test (UT) the installed anchor rods using straight-beam transducers to verify the absence of flaws. The Department will reject, and shall require replacement of, the entire base installation if reflectors are found with an indication rating of less than 15 decibels. All costs associated with replacing the base installation, if rejected, will be borne by the Contractor.
The Highway Specification Committee will be discussing this issue at their next meeting on June 6. AGC of NH is looking for member input on this supplemental specification and asks that you forward any comments to Bobbie Caradonna at bcaradonna@agcnh.org by the June 6 meeting. Any member who would like to be involved in the discussion is welcome to attend the meeting. Please contact AGC for details.
Click here to read the supplemental specification.
Senate Committee Passes House Bill 137- State Building & Fire Code
May 2012
May 2012
The Senate Municipal & Public Affairs Committee has completed work on House Bill 137, which is in regards to New Hampshire’s building and fire codes. It had come back on AGC of NH radar when an amendment was proposed that would have repealed the recently enacted rule requiring the electronic monitoring of fire extinguishers. However, the amendment was proposed too late in the session and legislators were hesitant to pass it without sufficient discussion. The issue may be brought up in next year’s session though.
The bill now performs the following functions:
• Defines the state fire code and establishes a procedure for the amendment of the state fire code.
• Reserves the title of “fire marshal” for use by the state and clarifies responsibility of the state fire marshal to approve plans for construction or renovation of state buildings.
• Updates references to the most recent version of the codes that comprise the state building code.
• Clarifies the authority of the state fire marshal to inspect and issue permits for state buildings and authorizes municipalities to contract with outside agencies for building inspection services.
• Clarifies membership of the building code review board and authorizes the board to amend the state building code.
• Ratifies changes to the state building code already adopted by the state building code review board.
• Establishes a working group to study egress provisions in the International Building Code and Life Safety Code.
Read the full text of the bill here.
The bill now performs the following functions:
• Defines the state fire code and establishes a procedure for the amendment of the state fire code.
• Reserves the title of “fire marshal” for use by the state and clarifies responsibility of the state fire marshal to approve plans for construction or renovation of state buildings.
• Updates references to the most recent version of the codes that comprise the state building code.
• Clarifies the authority of the state fire marshal to inspect and issue permits for state buildings and authorizes municipalities to contract with outside agencies for building inspection services.
• Clarifies membership of the building code review board and authorizes the board to amend the state building code.
• Ratifies changes to the state building code already adopted by the state building code review board.
• Establishes a working group to study egress provisions in the International Building Code and Life Safety Code.
Read the full text of the bill here.
AGC of NH State Position on Manchester Job Corps. PLA
March 2012
March 2012
On March 12, AGC of NH sent a letter to the Department of Labor (DOL) stating its position on the inclusion of a project labor agreement (PLA) and the small business set aside requirement on the Manchester, NH Job Corps. Project. The project, at the time of print, is scheduled to be bid on March 21, and AGC of NH felt it was important to state the Association's position.
In the letter, AGC of NH highlighted the major concerns with the PLA requirement in that it dictates a union preference on the way contractors do business. Additionally, AGC of NH stated that the small-business set-aside further restricts the number of contractors able to bid on the project.
The letter was sent to the contract specialist for the project, NH's Congressional Delegation, and NH's Governors.
Read the letter here.
In the letter, AGC of NH highlighted the major concerns with the PLA requirement in that it dictates a union preference on the way contractors do business. Additionally, AGC of NH stated that the small-business set-aside further restricts the number of contractors able to bid on the project.
The letter was sent to the contract specialist for the project, NH's Congressional Delegation, and NH's Governors.
Read the letter here.
AGC of NH Receives Response on Davis Bacon Appeal
February 2012
February 2012
The U.S. Department of Labor (DOL) has responded to AGC of NH’s request for reconsideration of the Highway Davis Bacon Wage Rates. In a letter dated February 28, the DOL’s Wage and Hour Division acknowledges the significant increases in certain categories, but stated that the New Hampshire’s Department of Transportation (DOT) approved the Davis Bacon rates prior to their implementation, meaning the rates will stay in effect.
The Board of Directors will be discussing this issue at their March meeting. Pending their evaluation, the Association may release a more in-depth look at the response and possible next steps. The DOL’s response letter is below. The materials AGC of NH sent to the Wage and Hour Division is under the title “AGC of NH Appeals Davis Bacon Wage Determinations” on this page.
DOL Response Letter to AGC of NH Appeal
The Board of Directors will be discussing this issue at their March meeting. Pending their evaluation, the Association may release a more in-depth look at the response and possible next steps. The DOL’s response letter is below. The materials AGC of NH sent to the Wage and Hour Division is under the title “AGC of NH Appeals Davis Bacon Wage Determinations” on this page.
DOL Response Letter to AGC of NH Appeal
AGC of NH Appeals Davis Bacon Wage Determinations
January 2012
January 2012
Following a series of concerns, discussions, and investigations, AGC of NH has decided to appeal the highway Davis Bacon wage determinations. AGC of NH found that several classifications increased wage rates significantly from 2010 to 2011. If the appeal is granted, a new survey of highway wage rates will be conducted.
AGC of NH first learned about the potential issues through communication with AGC of America. AGC of America had contacted chapters regarding anomalies in Davis Bacon Wage rates. This prompted AGC of NH to conduct a preliminary review of two counties, Hillsborough and Belknap. There were differences in both counties among the classifications, with the most significant being the Pounder, Paver, and Guardrail Installer. The Board of Directors reviewed the analysis, and they directed AGC of NH to contact New Hampshire’s Department of Transportation (NH DOT) and the Department of Labor (U.S. DOL) about the increases.
AGC of NH learned through discussions with NH DOT and the DOL, that the DOL began requesting certified payrolls from departments of transportation as a way to more accurately calculate the highway wage rates. Twelve months worth of certified payroll is generally used to calculate the wage rates, however NH DOT was allowed to submit six months worth of payroll data. AGC of NH believes that the small sample of projects may have lead to the higher wages. Furthermore, upon closer inspection of the wages and fringes, AGC of NH discovered that the wages for some classifications were averaged while the fringes for those classifications were taken from the prevailing fringe rate.
The Association detailed these issues in a letter to the U.S Department of Labor’s Wage & Hour Administrator. AGC of NH also included a breakdown of wages and fringes of the Paver, Pounder, and Guardrail Installer categories, a comparison of Hillsborough and Rockingham Counties, and the 2011 Davis Bacon Wage Analysis Report. NH DOT is supporting AGC of NH in its appeal, and has sent a letter stating this support to the Wage and Hour Administrator. NH DOT has also asked that the current wages be stayed and contractors be allowed to rely on previously established wage rates.
AGC of NH Davis Bacon Appeal Letter
DOT Support Letter
AGC of NH Davis Bacon Analysis
Analysis of DB Wage Classifications
Rockingham-Hillsborough DB Comparison
AGC of NH first learned about the potential issues through communication with AGC of America. AGC of America had contacted chapters regarding anomalies in Davis Bacon Wage rates. This prompted AGC of NH to conduct a preliminary review of two counties, Hillsborough and Belknap. There were differences in both counties among the classifications, with the most significant being the Pounder, Paver, and Guardrail Installer. The Board of Directors reviewed the analysis, and they directed AGC of NH to contact New Hampshire’s Department of Transportation (NH DOT) and the Department of Labor (U.S. DOL) about the increases.
AGC of NH learned through discussions with NH DOT and the DOL, that the DOL began requesting certified payrolls from departments of transportation as a way to more accurately calculate the highway wage rates. Twelve months worth of certified payroll is generally used to calculate the wage rates, however NH DOT was allowed to submit six months worth of payroll data. AGC of NH believes that the small sample of projects may have lead to the higher wages. Furthermore, upon closer inspection of the wages and fringes, AGC of NH discovered that the wages for some classifications were averaged while the fringes for those classifications were taken from the prevailing fringe rate.
The Association detailed these issues in a letter to the U.S Department of Labor’s Wage & Hour Administrator. AGC of NH also included a breakdown of wages and fringes of the Paver, Pounder, and Guardrail Installer categories, a comparison of Hillsborough and Rockingham Counties, and the 2011 Davis Bacon Wage Analysis Report. NH DOT is supporting AGC of NH in its appeal, and has sent a letter stating this support to the Wage and Hour Administrator. NH DOT has also asked that the current wages be stayed and contractors be allowed to rely on previously established wage rates.
AGC of NH Davis Bacon Appeal Letter
DOT Support Letter
AGC of NH Davis Bacon Analysis
Analysis of DB Wage Classifications
Rockingham-Hillsborough DB Comparison
Cell Phone Ban for CMV Owners/Operators in Effect in New Hampshire
January 2012
January 2012
As reported in the January 23 issue of the AGC of NH newsletter, the federal rule banning the use of cell phones by commercial motor vehicle owners and operators is in effect in New Hampshire. The Federal Motor Carrier Safety Administration (a division of the U.S. Department of Transportation) adopted the final rule in 2010, and it took effect on January 3, 2011. The rule restricts operators of commercial motor vehicles (CMV) from using hand-held mobile telephones. While the rule states it does not currently apply to CMV drivers who do not cross state lines, it is applicable in New Hampshire. New Hampshire has a reference statute that automatically adopts rules put in place by the Federal government. Owners/operators who violate this rule are subject to heavy fines. AGC of NH has confirmed the enforcement of this rule with Sgt. Begin of the New Hampshire State Police. NH State Police define commercial vehicles as vehicles weighing 10,001 lbs in commerce.
The following are frequently asked questions about the new rule. Please note that while the questions and answers refer to interstate transportation, these regulations apply in New Hampshire.
1. What is the effective date of the Mobile Telephone rule?
The effective date of the rule is January 3, 2012.
2. Are wired or wireless earpieces allowed?
Yes. Hands-free use of a mobile telephone is allowed using either a wired or wireless earpiece or the speakerphone function of the mobile telephone. Wireless connection of the mobile telephone to the vehicle for hands-free operation of the telephone, which would allow the use of single-button controls on the steering wheel or dashboard, would also be allowed.
3. Are commercial motor vehicle (CMV) drivers allowed to use push-to-talk mobile communications equipment while driving?
Yes, provided the driver does not reach for, dial, or hold the actual mobile telephone in his/her hand while driving and the driver is able to touch the button needed to operate the push-to-talk feature from the normal seated position with the safety belt fastened. Generally, the use of this type of communications equipment does not require drivers to take their eyes off of the forward roadway because the button used to enable the driver to communicate can be operated from the normal seated position with the safety belt fastened. For example, if the mobile phone is mounted in a cradle or similar device near the driver, or there is a remote push-to-talk button near the vehicle controls to allow the driver to communicate without reaching for, dialing, or holding the actual mobile telephone in his/her hands while driving, the equipment may be used.
4. Are holders of a commercial driver’s license (CDL) subject to the regulation only when driving a CMV, as defined in 49 CFR 383.5, or any vehicle?
CDL holders are subject to the Federal rule only when driving a CMV.
5. What drivers are covered by the Federal rule: intrastate or interstate? CDL holders? All CMVs?
This Federal rule covers both, driver of CMVs in interstate commerce, and also any drivers who operate a vehicle transportation a quantity of hazardous materials requiring placarding under 49 CFR Part 172 or any quantity of a material listed as a select agent or toxin in 42 CFR part 73.
If a CMV driver is employed by a State or a political subdivision of a State (e.g. county, city, township, etc.), FMCSA safety regulations do not apply, even if the driver is engaged in interstate transportation. But, if a CMV driver employed by a State or a political subdivision of a State is operating a vehicle that requires a CDL, the applicable State traffic laws would govern (e.g., Maryland’s prohibition on the use of hand-held phones). The States have 3 years to implement by State law the disqualification provision.
6. What is required of the employer in terms of company policy or training?
The rule does not require motor carriers to establish written policies in terms of company policy or training programs for their drivers. However, employers are prohibited from allowing or requiring their drivers to use hand-held mobile phones. A motor carrier may establish policies or practices that make it clear that the employer does not require or allow hand-held mobile telephone use while driving a CMV in interstate commerce. The carrier is responsible for its drivers’ conduct.
7. Is dialing a phone number allowed under this rule?
No. Dialing a mobile telephone while operating a CMV in interstate commerce is prohibited by the rule. A driver can initiate, answer, or terminate a call by touching a single button on a mobile telephone, earpiece, steering wheel, or instrument panel – comparable to using vehicle controls or instrument panel functions, such as the radio or climate control system.
8. Can a driver reach for a mobile telephone even if he/she intends to use the hands-free function?
No. In order to comply with this rule, a driver must have his or her mobile telephone located where the driver is able to initiate, answer, or terminate a call by touching a single button while the driver is in the seated driving position and properly restrained by a seat belt. If the mobile telephone is not close to the driver and operable while the driver is restrained by properly installed and adjusted seat belts, then the driver is considered to be reaching for the mobile phone, which is prohibited by the rule.
9. Are tow trucks exempt?
No. The interstate operation of tow trucks that meet the definition of a CMV are not exempt. Tow trucks, however, are exempt when responding to police emergencies in accordance with 49 CFR 390.23(a)(3).
The following are frequently asked questions about the new rule. Please note that while the questions and answers refer to interstate transportation, these regulations apply in New Hampshire.
1. What is the effective date of the Mobile Telephone rule?
The effective date of the rule is January 3, 2012.
2. Are wired or wireless earpieces allowed?
Yes. Hands-free use of a mobile telephone is allowed using either a wired or wireless earpiece or the speakerphone function of the mobile telephone. Wireless connection of the mobile telephone to the vehicle for hands-free operation of the telephone, which would allow the use of single-button controls on the steering wheel or dashboard, would also be allowed.
3. Are commercial motor vehicle (CMV) drivers allowed to use push-to-talk mobile communications equipment while driving?
Yes, provided the driver does not reach for, dial, or hold the actual mobile telephone in his/her hand while driving and the driver is able to touch the button needed to operate the push-to-talk feature from the normal seated position with the safety belt fastened. Generally, the use of this type of communications equipment does not require drivers to take their eyes off of the forward roadway because the button used to enable the driver to communicate can be operated from the normal seated position with the safety belt fastened. For example, if the mobile phone is mounted in a cradle or similar device near the driver, or there is a remote push-to-talk button near the vehicle controls to allow the driver to communicate without reaching for, dialing, or holding the actual mobile telephone in his/her hands while driving, the equipment may be used.
4. Are holders of a commercial driver’s license (CDL) subject to the regulation only when driving a CMV, as defined in 49 CFR 383.5, or any vehicle?
CDL holders are subject to the Federal rule only when driving a CMV.
5. What drivers are covered by the Federal rule: intrastate or interstate? CDL holders? All CMVs?
This Federal rule covers both, driver of CMVs in interstate commerce, and also any drivers who operate a vehicle transportation a quantity of hazardous materials requiring placarding under 49 CFR Part 172 or any quantity of a material listed as a select agent or toxin in 42 CFR part 73.
If a CMV driver is employed by a State or a political subdivision of a State (e.g. county, city, township, etc.), FMCSA safety regulations do not apply, even if the driver is engaged in interstate transportation. But, if a CMV driver employed by a State or a political subdivision of a State is operating a vehicle that requires a CDL, the applicable State traffic laws would govern (e.g., Maryland’s prohibition on the use of hand-held phones). The States have 3 years to implement by State law the disqualification provision.
6. What is required of the employer in terms of company policy or training?
The rule does not require motor carriers to establish written policies in terms of company policy or training programs for their drivers. However, employers are prohibited from allowing or requiring their drivers to use hand-held mobile phones. A motor carrier may establish policies or practices that make it clear that the employer does not require or allow hand-held mobile telephone use while driving a CMV in interstate commerce. The carrier is responsible for its drivers’ conduct.
7. Is dialing a phone number allowed under this rule?
No. Dialing a mobile telephone while operating a CMV in interstate commerce is prohibited by the rule. A driver can initiate, answer, or terminate a call by touching a single button on a mobile telephone, earpiece, steering wheel, or instrument panel – comparable to using vehicle controls or instrument panel functions, such as the radio or climate control system.
8. Can a driver reach for a mobile telephone even if he/she intends to use the hands-free function?
No. In order to comply with this rule, a driver must have his or her mobile telephone located where the driver is able to initiate, answer, or terminate a call by touching a single button while the driver is in the seated driving position and properly restrained by a seat belt. If the mobile telephone is not close to the driver and operable while the driver is restrained by properly installed and adjusted seat belts, then the driver is considered to be reaching for the mobile phone, which is prohibited by the rule.
9. Are tow trucks exempt?
No. The interstate operation of tow trucks that meet the definition of a CMV are not exempt. Tow trucks, however, are exempt when responding to police emergencies in accordance with 49 CFR 390.23(a)(3).