SEMA News - May 2010

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.



Emissions Exemption: SEMA-opposed legislation that sought to reset to 1959 the latest model year at which a vehicle is excluded from the emissions testing process has been “postponed indefinitely” by the legislature. Currently, model-year vehicles ’75 and older are exempted. Colorado’s current emissions-test exemption recognizes the minimal impact of older cars on vehicle emissions and air quality. These older vehicles are generally well-maintained and infrequently driven, constitute a small portion of the overall vehicle population and are a poor source from which to look for emissions reduction.


Inoperable Vehicles: Support for a SEMA-opposed bill that would allow cities and towns to enforce “nuisance abatement” procedures by notifying affected property owners through the use of first-class mail instead of certified mail (with a return receipt) has been withdrawn. There will be no action on the bill this year. The Kansas jurisdiction behind the bill’s introduction has decided to withdraw its support until there is another method to notify property owners of enforcement action. Nuisance-abatement laws are often used by local jurisdictions to force removal of inoperable vehicles, including parts cars stored on private property by car collectors. SEMA opposed the bill because owners could risk removal of valuable collector cars and parts without actual and verified notification, especially when they are not at home to receive a first-class mailing.


Historic Vehicles: SEMA is opposing legislation in the Michigan legislature that threatens to change the $30 registration fee for historic motor vehicles (renewable every 10 years) to an annual fee. Under current Michigan law, the owner of a historic vehicle may also choose to use restored authentic Michigan plates from the same year as the vehicle’s model year for a one-time fee of $35. This measure would also increase that one-time fee to an annual registration fee of $30. Under the bill, each of the registrations would come up for renewal every year on the vehicle owner’s birthday.


Abandoned Vehicles: Legislation that would have expanded the definition of “abandoned motor vehicle” to include vehicles that were left unattended for more than six hours on private property without valid plates, title or permit will not be considered in the 2010 legislative session. The bill also sought to include vehicles that are inoperable, partially dismantled, wrecked, junked or discarded. Under current law, a vehicle is not considered to be abandoned on private property until it is left unattended for more than seven days. Motor vehicles are defined as abandoned for the purpose of allowing state and local authorities to remove them from private property. Given the opposition raised by SEMA and the Nebraska vehicle hobbyist community, the bill sponsor will make a series of amendments to protect hobbyists before he reintroduces the legislation next year.


Street Rods/Custom Vehicles: The Ohio House Transportation Committee held a hearing, after several postponements, on SEMA-model legislation to create a vehicle registration and titling classification for street rods and custom vehicles and provide for special license plates for these vehicles. The bill defines a street rod as an altered vehicle manufactured before 1949 and a custom as an altered vehicle at least 25 years old and manufactured after 1948. The bill allows a kit car or replica vehicle to be assigned a certificate of title bearing the same model-year designation that the body of the vehicle was constructed to resemble. The committee will formally approve the bill before sending it to the floor for a vote by the full House.


Older Motor Vehicles: SEMA is supporting a bill in the Oklahoma Legislature to reduce the annual registration fee for vehicles 25 years old and older to $5. Under current law, these vehicles are assessed at a rate of $15
per year.


Aftermarket Exhaust Systems: SEMA defeated a bill to ban the use of most aftermarket exhaust systems. Under the bill, all vehicles would have been required to be equipped with an exhaust system that is “installed by the original manufacturer of the vehicle and is not modified; or meets specifications equivalent to the muffler installed by the original manufacturer of the vehicle and is not modified.” Among other things, the bill ignored the fact that aftermarket exhaust systems are designed to make vehicles run more efficiently without increasing emissions; did not supply law enforcement with a clear standard to enforce, allowing officers to make subjective judgments on whether or not a modified exhaust system is in violation; and would have made it difficult for hobbyists to replace factory exhaust systems with more durable, better-
performing options.


Scrappage: SEMA again helped turn back legislation in the Washington Legislature that would have implemented a vehicle scrappage program for passenger vehicles more than 15 years old. Given the outcry of SEMA and members of the Washington vehicle hobbyist community, the House Finance Committee chose not to consider the bill before the cut-off deadline. Under the bill, qualifying vehicles would have had to be registered for a 24-month period and in satisfactory operating condition. Replacement vehicles purchased under the plan would have been required to have an EPA highway gasoline mileage rating of at least 30 mpg. Participants in the program were to be granted a sales-tax exemption for the first $2,000 of tax paid on the purchase price. All trade-in vehicles would have been destroyed, regardless of their historical value or collector interest.

Inoperable Vehicles: A version of SEMA-model legislation to prohibit cities or towns from enforcing an ordinance, development regulation, zoning regulation or administrative practice that prevents automobile collectors from pursuing their hobby did not receive committee consideration before the legislature’s deadline. Under the bill, junked, wrecked or inoperable vehicles—including parts cars, stored on private property—would have required screening from public view, if required by local law.  


Jobs Bill: President Obama signed into law a SEMA-supported $16 billion jobs bill that is intended to expand the American workforce by hiring unemployed workers. All businesses that hire a new employee before January 1, 2011, will be exempt from paying the 6.2% employer share of Social Security payroll taxes.

The new worker must have been unemployed for at least 60 days and cannot replace another employee. If the business retains the newly hired worker for one year, the employer is then entitled to a one-time, $1,000 tax credit for each such worker. The legislation also extends the “Section 179” expensing provision, allowing small businesses to write off up to $250,000 of capital expenditures made during 2010 rather than recovering the costs over time through depreciation. The bill also increases the investment cap to $800,000 for 2010 rather than $500,000, indexed for inflation. The House and Senate are now considering other bills intended to spur economic growth, such as legislation to extend the research and development tax credit and other deductions.

OHVs and Land Use: A U.S. Department of the Interior document indicates that the agency plans to designate 14 new or expanded national monuments covering 13 million acres in the western United States. Interior Secretary Ken Salazar provided subsequent assurances that the plans were preliminary and that the Obama Administration would not bypass input from local communities, governors and Congress if the plans move forward. Unlike wilderness designations, motorized recreation is permitted within national monuments. However, closing off-highway vehicle (OHV) roads and trails is a frequent byproduct when land receives the national monument designation.

Targeted lands include popular OHV areas, such as the San Rafael Swell and Cedar Mesa (Utah), Berryessa Snow Mountains and Bodie Hills (California) and parts of the Great Basin (Nevada). SEMA supports land-use decisions that are reasonable and enjoy local community support. SEMA opposes unnecessarily restrictive land-use policies and has urged Congress, states and local communities to take an active role in determining the size of monuments if such a designation is deemed appropriate.  

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