Law & Order

Keeping Pace With Legislative Trends

SEMA News—August 2011

Keeping Pace With Legislative Trends

Government Moves to Construct Road-Blocks and On-Ramps

By Ashley Ailsworth

When we think of trends, undercarriage neon lighting, spinners and European-style taillamps spring to mind. Trends develop over time and contribute to movements in design, industry, fashion, entertainment and even legislation. In reacting to trends, legislatures tend to create many of their own. The following trends are currently being pursued by state legislatures across the country and on the national stage. These legislative and regulatory trends do more than create laws to which the industry must comply; they provide insight into underlying conditions that have fueled their creation.

Fuel-Efficiency Mandates

Congress established the first fuel-economy standards for light-duty vehicles in 1975 in an attempt to increase the efficiency of vehicles manufactured in the United States in the wake of the Arab oil embargo. Corporate Average Fuel Economy (CAFE) standards provide targets that vehicle manufacturers must attain across their production fleet.

These standards have trended upward since their inception, and there is no reason to believe that they will regress in the future. A proposal to extend the CAFE program to include heavier vehicles is currently in the works, and new CAFE standards for light-duty vehicles—model years ’17–’25—are also being considered.

Regulators are considering a 60-mpg standard for automakers to meet by the year 2025. It is anticipated that hybrids and electric vehicles will be burdened with carrying their less-efficient cousins, but demand for electrics is not currently high enough to offset the rest of the vehicle population, prompting engineers to consider new techniques for increasing mileage. Increased use of carbon fiber, turbochargers, advanced aerodynamics, weight-distribution techniques and tighter tuning could all increase fuel economy and bring a fleet into compliance.

Change to All OBD-Based Emissions Inspections

Onboard diagnostic (OBD) inspections of motor-vehicle emissions systems have become the norm for vehicles manufactured in 1996 and later. Six states operate OBD-II inspections only, exempting vehicles manufactured prior to ’96 altogether. California has recently enacted legislation requiring all vehicles manufactured after model-year ’00 to be tested using OBD-II. Included in the provisions of the new law is an exemption from OBD testing for street rods and customs, which would be directed to BAR-certified referee stations. The switch to all OBD-II testing for model-year ’00 and newer vehicles is slated to take place on January 1, 2013.

Despite differences in programs, all states operating emissions-inspection programs utilize OBD-II testing, which can present problems for enthusiasts. While minor errors made while performing modifications may not present a problem for a vehicle’s performance or the performance of its emissions controls, they can interrupt the communication between the vehicle’s ECU and the inspection station’s testing equipment. Recognizing that computer error codes do not always equal pollution, some states have introduced legislation to ensure that clean vehicles can be registered in the face of technological roadblocks. For instance, North Carolina’s legislature introduced a bill that would have prevented an inspection station from failing a vehicle based on an illuminated engine light if there were no underlying emissions or safety issues. Idaho passed a bill to reinstate a vehicle’s registration when it is revoked due to failure of an OBD inspection if the vehicle is later found to be in compliance with emissions standards.

Classic Cars as Revenue Sources


Cash-strapped states are searching for new revenue sources, and classic cars have become moving targets.

A rumored proposal that Congress was planning a tax hike on collectibles spread like wildfire over the Internet this year but, ultimately, turned out to be a hoax. However, with state coffers depleted, the government in Washington, D.C. is not the one you have to worry about. Cash-strapped states are searching for new revenue sources, and classic cars have become moving targets. State governments are increasingly looking at collector and antique cars as a source to feed their bloated budget deficits. Many revenue-seeking proposals would burden classic-car owners unfairly without offering anything in return, while others seek to collect extra funds in exchange for additional perks for owners.

States attempting to place the burden on hobbyists by increasing the cost for antique registration have so far been thwarted by the SEMA Action Network. In response, some states are seeking new ways to collect revenue by providing the community with more options for the registration and use of unique vehicles. Utah recently expanded its definition of “vintage vehicle” by 10 model years, with newly included vehicles being charged a $45 annual fee for the privilege of registering under the classification. Illinois is also working to enact legislation that would provide the state with additional income from antique-vehicle owners wishing to register under a new expanded-use antique classification that would allow these vehicles to be driven without restrictions during the warmer months of the year.

Street Rod and Custom Vehicle Titles

Registration and titling designations are created by the states and can vary depending on how the state chooses to identify particular vehicles. Most states attempt to follow national trends when creating or altering their classifications. By attempting uniformity, fewer issues arise when moving a vehicle from one state to the next. Unfortunately for builders, no appropriate designations were in place for specialty cars and trucks, leaving them subject to being titled inaccurately.

In 2002, SEMA established a model bill to address this problem. The model bill creates the title brands of “street rod” (modified ’48 or older model-year vehicles) and “custom” (modified post-’48 model-year vehicles that are at least 25 years old). Kit cars and replicas are titled as the model year they resemble.

The bill has been enacted in one form or another in 22 states to date—no small feat. Because of SEMA’s efforts, you will find classifications created especially for rodders. The SEMA-model bill also creates a registration framework that allows these vehicles to get on the road, specialty plates included.

Targeting Noise

Legislatures around the country are seeking to pass laws that limit the amount of noise vehicles may produce. The proposals address all types of vehicle noise, from audio to exhaust to racetrack. To remedy this problem, SEMA worked to bring about a new enforcement procedure in California through its exhaust-noise model bill.

The new law measures compliance with an objective noise standard using a fair and predictable test. Through this procedure, motorists who drive vehicles legally equipped with modified exhaust systems can confirm that they comply with California’s exhaust-noise standard. Based on the SEMA model, a similar standard was enacted in Maine in 2003 and Montana in 2007.

Charging for Road Use



Government support for more fuel-efficient vehicles has contributed to a lessened demand for fuel. Less gas being used means that vehicle owners are paying less in fuel taxes, which are used in part to fund transportation infrastructure. Two main trends have emerged for increasing revenue to support the rising cost of transportation infrastructure: an increase in the fuel tax and a tax on road usage.

Most road-usage taxes—commonly referred to as vehicle miles traveled (VMT) taxes—come with trade-offs. While charging vehicle owners proportionately for their use of public highways may seem fair, measuring the number of miles traveled poses threats to privacy. Gathering VMT data could be accomplished through the use of an odometer-like device, a vehicle’s on-board computer or with GPS units in each vehicle capable of recording not only distance traveled, but time and location as well.

Opponents fear that the evolution of VMT taxes will include charges relating to driving patterns and vehicle type, limiting movement and choice, but the idea is gaining ground in several states. A pilot program was conducted in Oregon, and California adopted a resolution requesting that the U.S. Congress enact legislation to conduct a study regarding the feasibility of collecting transportation revenue based on a VMT fee. Public opposition to such a system has stymied the federal effort at this time.