SEMA News - September 2009

By Steve McDonald



Law and Order is an update of some of the most recent federal and state legislative and regulatory issues that could potentially impact the automotive specialty-equipment industry. These include issues affecting small-business owners and their employees.


Legislative Automotive Study Group: California Assemblymember Ted Gaines has formed an informal California Legislative Automotive Study Group, aimed at protecting and raising awareness of the “state’s automotive industry and the jobs it creates.” Assemblymember Felipe Fuentes will co-chair the group. The group plans to look into ways to “explore new environmentally friendly technologies and innovations” as well as promoting the off-road and auto enthusiast markets, which Gaines says accounts for 200,000 jobs in California. SEMA is contacting group members to offer its assistance and support.

Greenhouse Gases: The U.S. Environmental Protection Agency (EPA) announced that it will grant a waiver to California to allow the state to regulate greenhouse gas emissions from cars and trucks. Until at least 2016, however, California will pursue the national approach adopted by the Obama Administration. The decision ends a seven-year battle by California to establish standards to limit emissions of carbon dioxide and other greenhouse gases. In 2007, the Bush Administration blocked implementation of the California CO2 rule, which had been adopted by 13 other states. Since the federal standards will not begin until 2012, the waiver technically allows California and other states to enforce their own standards. More importantly, the waiver will permit California to pursue stricter standards after 2016.

Tire Fuel Efficiency: California has issued a regulatory proposal to establish a tire fuel-efficiency rating system. The regulation is based on a 2003 California law mandating a program to provide consumers with information about the fuel efficiency of replacement tires. The law contains a SEMA provision exempting manufacturers of tires that have the same SKU, plant and year and have been produced or imported in annual units of less than 15,000. California regulators are proposing a program that would assign a “fuel-efficient tire” ranking to the top 15% of tires with the lowest rolling resistance within their size and load class. All other tested tires would be ranked as “tires that are not fuel efficient.” If enacted, the testing program would take effect in mid 2011. Manufacturers would also be required to report other tire information, such as load index, federal Uniform Tire Quality Grading System rating and speed rating.


Vehicle Noise: SEMA helped defeat legislation that would require motor vehicles and devices to be operated, constructed and adjusted to prevent unnecessary or unusual noise. The bill did not define what constituted unnecessary or unusual noise. SEMA also persuaded lawmakers not to pass legislation that sought to provide an incentive to localities to increase the number of citations issued for violation of vehicle noise regulations.

North Carolina

Scrappage: SEMA persuaded North Carolina legislators not to consider legislation that would have implemented a state vehicle scrappage program for passenger vehicles that are at least 14 years old. Participants would have received around $1,000 to $1,500 to scrap their cars and purchase current-year vehicles under 10,000 pounds or from the previous three model years. All trade-in vehicles could have been destroyed, regardless of their historical value or collector interest. Had this effort been successful, hobbyists could have been denied the availability of vintage cars and parts for restoration projects.


Aftermarket Parts: The Oregon House and Senate approved an alternative to legislation that originally sought to prohibit the sale and distribution of aftermarket motor vehicle parts if alternatives are available that “decrease greenhouse gas emissions from motor vehicles.” Under the alternative, negotiated between SEMA and the Oregon Department of Environmental Quality, the bill would only give the department authority to adopt the present California certification process for aftermarket emissions-related parts, allowing parts manufacturers to meet one uniform standard rather than a patchwork of multiple state standards. The amended legislation will also incorporate a California law that requires state regulators to develop a tire fuel-efficiency program for passenger car and light-truck replacement tires. As in California, Oregon includes a SEMA-drafted provision to exempt limited-production tires (15,000 or less annually), deep-tread snow tires, limited-use spares, motorcycle tires and tires manufactured for use on off-road vehicles. The bill will now be transmitted to the governor for his signature and enactment into law.


Antique Vehicles: Legislation to amend the state’s current law defining antique motor vehicles to also permit use of these vehicles for “selling, testing the operation of or obtaining repairs” was signed into law by Governor Phil Bredesen. The bill had originally contained a SEMA-supported provision to allow use for everyday general transportation. In addition to the new allowances, the Tennessee law continues to permit use of antique vehicles for club activities, exhibits, tours and for general transportation on Saturday and Sunday.

Federal Update


Health Care Reform: Congress is working this summer to complete House and Senate bills to overhaul how Americans gain access to affordable health care insurance. The ultimate goal for congressional Democrats is to finalize a single bill this fall to be sent to President Obama. Given the complexity of the issue and its financial ramifications, a number of reform measures have been proposed and debated. Topics that are being simultaneously addressed include providing expanded coverage, cost containment, improved quality, simplified administration and equitable financing. SEMA continues to support cost-containment measures, such as allowing small businesses to gain access to national or large state coverage pools. SEMA’s advocacy efforts are coordinated with the Small Business Coalition for Affordable Healthcare and the National Federation of Independent Businesses.

Greenhouse Gases: The U.S. House of Representatives passed landmark legislation to establish national limits on greenhouse gases and an emissions credit trading system. The bill’s intent is to gradually switch the nation from fossil fuels to sources of “clean” power, such as wind and solar energy. The legislation would require a 17% reduction in carbon dioxide (CO2) emissions by 2020 and 80% by 2050, based on 2005 levels. The primary targets are large stationary source emitters such as powerplants, factories and refineries. The bill would establish a market for issuing CO2 permits that could then be bought and sold as a mechanism for regulating emissions limits. This approach has been adopted in Europe and is similar to the EPA’s acid rain program, which limits sulfur dioxide from coal-fired powerplants and other sources. Auto tailpipe emissions would be regulated under a previously announced Obama Administration program to link CO2 emissions to the CAFE standards (since CO2 is released in proportion to the amount of carbon-based fuel that is burned.) This approach is supported by SEMA and the automakers, since it has the advantage of creating a single national CO2 standard. A Congressional study projects that the House bill will raise average household energy prices from $80 to $111. Opponents believe that the estimates are too low and that American jobs will migrate to countries that do not have equivalent climate regulations. The U.S. Senate is expected to consider its version of the legislation this fall. President Obama has made passage of the bill a top domestic priority.

Tire Fuel Efficiency: The National Highway Traffic Safety Administration (NHTSA) has issued a proposal to establish a tire fuel-efficiency rating system. The plans stem from a 2007 federal energy law mandating a program to provide consumers with information about the fuel efficiency of replacement tires. The law contains a SEMA provision exempting manufacturers of tires that have the same SKU, plant and year and have been produced or imported in annual units of less than 15,000. Under the federal program, tire manufacturers would be required to label their replacement tires for fuel efficiency, safety and durability based on performance tests established by NHTSA. The label would display a scale ranging from 0 to 100, with 100 being the best rating. NHTSA must issue a final rule by the end of 2009.

Light Truck Bumper Standard: NHTSA is seeking public comment on whether to apply the bumper standard to light trucks, vans and SUVs, since they now represent a large percentage of the nation’s car fleet. The bumper standard has only applied to passenger cars since it was implemented in 1972. The standard’s performance requirements are intended to prevent damage to the car body and safety-related equipment at 2½ mph across the full width of the front and rear bumper and 1½ mph on the corners.

Daytime Running Lamps: NHTSA denied a longstanding petition by General Motors that the agency mandate installation of daytime running lamps (DRLs) on all new light-duty vehicles. NHTSA’s decision was based on study results that it found did not provide substantial evidence of an overall safety benefit, although the lighting equipment may be beneficial under certain scenarios. NHTSA will continue to maintain a neutral position on the technology and allow manufacturers to make individual decisions on whether to voluntarily install DRLs. The DRLs must meet performance criteria issued by NHTSA, which are meant to address potential glare.

Aerosol Paints: The EPA has added 128 substances to the list of chemicals sometimes found in aerosol paints that emit volatile organic compounds (VOCs). The primary substances include formaldehyde, ethanol, benzene, propane and vinyl chloride. VOCs react with nitrogen oxides in the presence of sunlight to form ground-level ozone. Spray paint manufacturers must now determine whether their products contain the substances and still comply with VOC emissions limits that took effect in 2009 for spray paints, primers and clear coatings. The EPA rule is similar to a California standard and applies to manufacturers and distributors of aerosol products that are used for both industrial applications and by do-it-yourselfers. The EPA believes that most producers already comply with the rule. Manufacturers that make limited quantities of aerosol spray paints containing VOCs (less than 7,500 kilograms/8.3 tons) on an annual basis are exempt from the regulation.

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