SEMA News—May 2014
LEGISLATIVE and TECHNICAL AFFAIRS
By Steve McDonald
LAW AND ORDER
STATE UPDATE
Arizona Emissions Inspections: Legislation to exempt all vehicles manufactured in the ’74 model year and earlier from the state’s mandatory biennial emissions-inspection program was signed into law in 2011. Under previous law, only vehicles manufactured in 1966 and earlier and “collectibles” were exempt. However, federal law requires that changes to the state’s inspection and maintenance program be approved by the Environmental Protection Agency (EPA). The EPA has not yet approved the expanded exemption. This year, legislation has been introduced to exempt all vehicles manufactured in or before the model year “that is forty years before the year in which the inspection is due.” While the bill does not expressly state it, it’s likely that it would require similar EPA approval if enacted into law. The measure amounts to a rolling exemption, picking up an additional model year for the exemption for each year the law is in place.
Kentucky Property Tax: A bill to change the valuation procedure on vehicles registered in the state for purposes of the property tax was amended by the House Transportation Committee and approved by the entire House of Representatives. The bill will now be considered by the Senate. Under the amendment, newer vehicles would be valued at the “average trade-in” value. Previously, the bill required these vehicles to be valued at the higher “clean trade-in” value. The “clean trade-in” value is used when a vehicle is in excellent condition and not in need of repairs. The bill continues to put a new valuation procedure in place for older vehicles. Vehicles 20 years old or older would no longer be presumed to be in “original factory” or “classic” condition. Original factory and classic vehicles are assessed as high-value collectibles.
SEMA PAC President’s Club Spotlight: Russell Stephens
“I am a SEMA PAC President’s Club member because I love our industry,” Stephens said. “However, there are people out there who would love to see the automotive aftermarket industry gone. Every week, there are new laws proposed that would hurt SEMA-member companies. SEMA PAC is the only thing standing in their way. We need every SEMA member to support the PAC. It is an investment in the future of our industry.” For more information on SEMA PAC, please contact SEMA PAC Manager Christian Robinson at 202-783-6007 x20 or christianr@sema.org. | ||
Russell Stephens is the president of MSD Performance, which is headquartered in El Paso, Texas. Stephens is a three-year member of the SEMA Political Action Committee (PAC) President’s Club and currently serves on the SEMA Board of Directors.Maryland Historic Vehicles: Legislation to increase the age requirement for vehicles eligible for registration as “historic motor vehicles” was heard in the House Environmental Matters Committee. Under the SEMA-opposed bill, the age requirement would be raised from 20 to at least 25 years old, require that an historic vehicle be insured under a policy for historic vehicles, show vehicles or antique insurance and require that the owner have a “daily driver” vehicle registered in Maryland. SEMA is working with the bill sponsor to reach a fair compromise on these changes to the historic-vehicle statute to ensure that legitimate vehicle owners are not penalized.
Maryland Registration Surcharge: Legislation authorizing a county or municipality to impose an annual surcharge for the registration of a motor vehicle was considered by the Senate Budget and Taxation Committee without a vote being taken. The bill, opposed by SEMA, provides for a surcharge of up to $20 per year and requires that revenue from the surcharge be used for transportation development purposes. The measure makes no special exception for hobby cars, such as street rods and historic vehicles, that constitute a small portion of the vehicle fleet, are infrequently operated and are deserving of lower taxes and fees.
Maryland Emissions Tests: Legislation requiring a vehicle emissions-inspection facility, at the request of the owner of a vehicle that has failed an on-board diagnostics test, to immediately conduct an exhaust emissions test of the vehicle at no cost to the owner was considered by the House Environmental Matters Committee. If enacted, this bill would effectively give an owner two chances to pass an emissions test. The committee has not yet voted on the bill.
New Jersey Emissions Exemption: SEMA is supporting legislation to require the motor vehicle commission to issue exempt certificates for motor vehicles not required to be inspected. Under current law, motorcycles, registered historic motor vehicles, motor vehicles designated as collector vehicles and certain diesel-powered passenger motor vehicles built before the ’97 model year are exempt from emissions inspections and equipment inspections. As exempt motor vehicles are not subject to inspection, no certificates of approval are issued for them to display. On occasion, the operators of these exempt vehicles are stopped by law enforcement because there is no certificate of approval affixed to their windshields. The bill would eliminate that problem by requiring the motor vehicle commission to issue certificates of exemption for display on these vehicles.
New Jersey Restoration Shops: A SEMA-supported bill has been reintroduced to exempt shops in the business of restoring antique or classic motor vehicles from the requirement that they provide a written estimate for anticipated repairs, including the price for parts or labor charges. Under current regulations, an automotive repair dealer who fails to provide a customer a written estimated price to complete the repair prior to commencing work for compensation can be found to be in violation of the consumer fraud law. The legislation defines “antique or classic motor vehicle” as any motor vehicle that is at least 25 years old and that is owned as a collector’s item and used solely for exhibition and educational purposes by the owner.
Ohio Historical Vehicles: SEMA-supported legislation to amend the state’s current law defining historical motor vehicles to permit their use on public roads to and from a location where maintenance is performed was signed into law by Governor John Kasich. The new law allows motorists the opportunity to have their historical vehicles serviced or repaired without the threat of being cited by law enforcement for violation of the motor vehicle code.
Tennessee Antique Vehicles: Legislation to allow counties to exempt owners of antique motor vehicles from the privilege tax was approved by the Tennessee House and Senate. Under the bill, the county may also require only a one-time payment of the tax. According to the state, the average amount of the one-time tax imposed would be $43.10. In Tennessee, an “antique motor 
vehicle” is a motor vehicle more than 25 years old with a nonmodified engine and body that is used for participation in, or transportation to and from, club activities, exhibits, tours, parades and similar uses as a collector’s item; on the highways for the purpose of selling, testing the operation of or obtaining repairs to or maintenance; and for general transportation only on Saturday and Sunday. The bill will now be sent to Governor Bill Haslam for his signature and enactment into law.
Washington Collectible Vehicles: A bill supported by SEMA to exempt collectible vehicles of any age from emissions testing was approved by the Senate Transportation Committee. Having already been approved by the House, the bill now moves to the Senate floor for a vote by all members. The measure defines a collectible vehicle as “a vehicle of unique or rare design, of limited production, and an object of curiosity that is maintained primarily for use in car club activities, exhibitions, parades, or other functions of public interest or for a private collection, and is used only infrequently for other purposes.” The legislation requires that the vehicle have collectible-vehicle or classic-automobile insurance coverage that restricts the collectible-vehicle mileage or use, or both, and requires the owner to have another vehicle for personal use.
West Virginia Remote Starters: Legislation to provide that a motor vehicle that has been started by use of a remote starter when the vehicle is locked is not an “unattended vehicle” and not in violation of the law was approved by the House Roads and Transportation Committee. The bill will now be considered by the House Judiciary Committee. Under current West Virginia law, no person driving or in charge of a motor vehicle may permit it to stand unattended without first stopping the engine, locking the ignition, removing the key and effectively setting the brake. The measure would ensure that a motor vehicle that has been started by use of a remote starter when the vehicle is locked is not an unattended vehicle, and owners would not be guilty of a misdemeanor and subject to a fine.
FEDERAL UPDATE
Tax Reform: Leaders of the U.S. House Ways and Means Committee released the “Tax Reform Act of 2014,” a comprehensive set of recommendations for simplifying the corporate and individual tax codes. The proposals stem from a series of bipartisan workshops held in 2013 with stakeholders, academics and the general public. Recommendations include a top corporate tax rate of 25% to be phased in over five years, a permanent research-and-development (R&D) tax credit, making permanent enhanced Section 179 expensing for small businesses and a repeal of “last in, first out” rules with transition rules. The proposals are viewed as a starting point for meaningful action in 2015, since Congress is not expected to address tax reform in an election year. Nevertheless, SEMA is urging Congress to address temporary tax provisions that expired in 2013, such as the R&D tax credit.
Corporate Average Fuel Economy (CAFE) Standards for Trucks: President Obama ordered the National Highway Traffic Safety Administration (NHTSA) and the EPA to strengthen the fuel-economy standards for medium- and heavy-duty trucks. The current standards were developed in 2011 and are designed to reduce emissions from 9% to 23% between model-year ’14 and model-year ’18. In crafting new standards for model-year ’19 and beyond, the government intends to work with truck manufacturers and other stakeholders to take advantage of available technological innovations such as engine and powertrain efficiency improvements, aerodynamics, weight reduction, improved tire rolling resistance, hybridization and automatic engine shutdown. A proposed rule is scheduled to be issued in 2015.
Greenhouse Gases: The U.S. Supreme Court heard arguments in a case that pits a dozen states and a number of industrial groups against the EPA on whether the agency has the authority to regulate greenhouse gases from stationary sources. The court ruled in 2007 that carbon dioxide, the primary greenhouse gas element, was a pollutant under the Clean Air Act and that the EPA had a duty to regulate the gas. The EPA subsequently issued new tailpipe emissions standards to reduce carbon emissions by establishing greenhouse gas levels tied to increases in the CAFE standards. The lawsuit hinges on whether the EPA has legal authority to limit its permit program to the very largest stationary-source emitters (such as refineries, steel mills, chemical and cement plants) when a plain reading of the law suggests that it would have the unintended effect of also applying to thousands of other small-
source emitters.
Driver Distraction: The NHTSA held a public meeting on developing guidelines covering aftermarket devices that risk driver distraction. In 2013, the NHTSA issued Phase 1 guidelines for devices installed in new vehicles that require drivers to take their eyes off the road and hands off the wheel. Under the guidelines, certain functions, such as inputting an address into a navigation system, text messaging, dialing a phone number or browsing the Internet will be disabled until the vehicle is in park, while operations requiring less than two seconds and one hand to achieve will be permitted. The agency is now moving forward with Phase 2 guidelines for aftermarket equipment/software.
Airbags: The NHTSA issued a technical report evaluating the fatality-reducing effectiveness of curtain and side airbags in the front seats of light-duty vehicles. As of model-year ’11, 85% of new cars, light trucks and vans were equipped with curtains plus torso bags for drivers and right-front passengers, and about 45% of these vehicles included curtains that deploy in rollover crashes. Analysis of crash data shows a significant fatality reduction for all four types of curtain and side airbags in near-side impacts for drivers and right-front passengers: curtains plus torso bags, 31.3%; combination head/torso bags, 24.8%; curtains only, 16.4%; and torso bags only, 7.8%. Rollover curtains also demonstrated a significant benefit in first-event rollovers, with an estimated fatality reduction around 41%.
Vehicle-to-Vehicle Communications: The NHTSA plans to require installation of vehicle-to-vehicle communications technology in new cars. A wireless chip would allow connected cars to communicate over a special wireless frequency called Dedicated Short-Range Communications (DSRC). The DSRC system operates in a fashion similar to the Wi-Fi used in personal computers. Vehicles would transmit a 360-degree status report to other connected vehicles within the immediate vicinity. The current 
technology would transmit location, speed and direction data 10 times per second. Computers in the cars would be able to respond to an impending crash by sending an alert to the driver (flashing message, audible warning, rumbling seat or steering wheel). The NHTSA intends to issue a final rule for requiring the equipment on new cars by the end of 2016.
Health-Care Law: The Obama Administration delayed the requirement for businesses with 50–99 employees to offer health-care coverage. Mid-sized firms will now have until January 1, 2016, to comply with the law’s obligation to offer coverage or pay a penalty. The so-called “employer mandate” was originally scheduled to take effect on January 1, 2014, but had already been delayed one year. Large businesses with more than 100 employees will still be required to offer health insurance on January 1, 2015, or face a penalty of $2,000 for each full-time worker, minus the first 30 full-time employees. Until 2016, however, the companies must offer coverage to only 70% of their full-time workers rather than the law’s 95% threshold. Businesses with 49 or fewer employees are not required to offer health-care coverage for their employees. SEMA has compiled comprehensive health-care information at www.SEMA.org/healthcare.
