SEMA News—April 2015
LEGISLATIVE AND TECHNICAL AFFAIRS
By Steve McDonald
Law and Order
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.
California Chemical Warnings: The California Office of Environmental Health Hazard Assessment is proposing new requirements on product manufacturers and various other business entities under Proposition 65, the California law requiring warnings in the presence of certain chemicals. Under Prop 65, a manufacturer, producer, packager, importer or distributor of a product that causes consumers to be exposed to a listed chemical is required to provide a warning. Currently, a Prop 65 warning must be given prior to the time of anticipated exposure, but under the new rule, the warning must be given prior to sale, imposing new burdens on website and catalog retailers. The new rule also lists 12 chemicals that a manufacturer would have to identify by name in its Prop 65 warning.
Connecticut Property Tax: Legislation to lower the property tax on many older vehicles has been introduced. Under the bill, the personal property tax on vehicles eight years old and older would be changed to a flat tax of $100 per year for vehicles between eight and 10 years old with an assessed value of less than $10,000 and $50 per year for vehicles 10 years old and older with an assessed value of less than $8,000. Antique, rare and special-interest vehicles may be negatively affected by the bill. These vehicles are currently valued at a $500 assessment, which results in a reduced tax.
Hawaii Exhaust Systems: SEMA-opposed legislation to prohibit the use, sale or installation of an exhaust system “that has been changed or modified from the factory design so as to increase the volume or audibility of the explosions within the vehicle’s motor” was reintroduced in Hawaii. The bill would also require safety-inspection stations to perform a test to ensure that a vehicle conforms to the law. Fines for noncompliance would range from $100 to $500 for each offense. However, the measure provides no procedure by which vehicles would be tested and does not provide inspection stations with decibel readings on factory-installed exhaust systems.
Hawaii Registration Fees: Legislation has been introduced in Hawaii to reduce annual registration fees from $45 to $25. Separate legislation seeks to reduce the state vehicle weight tax by 1 cent per pound and reduces the flat rate for vehicles more than 10,000 lbs. from $300 to $150.
Iowa Single License Plate: A bill has been introduced to provide for the issuance of a single license plate for motor vehicles originally manufactured with a front bumper that sits 24 in. or less from the ground. Separate legislation would allow a single plate for motor vehicles originally manufactured without a bracket, device or other means to display and secure a plate on the front of the vehicle.
Iowa Nitrous Oxide: A version of SEMA-model legislation to permit motor vehicles equipped with nitrous-oxide systems has been introduced. Under the bill, the system must be disconnected when the vehicle is operated on public highways. Written as a compromise to outright bans, the measure seeks to better protect public road safety while ensuring legitimate off-road uses of nitrous-oxide systems.
Kentucky Property Tax: The legislature is proposing a new valuation procedure 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 currently assessed as high-value collectibles. This measure instead provides three options for assessing the value of these vehicles, including allowing an administrator to conduct an assessment of the vehicle to determine the correct value, which would be reduced by 10% for each year thereafter.
Maryland Single Plate: Legislation has been reintroduced to require the issuance of only a single license plate for all motor vehicles. A second bill provides that historic vehicles and street rods may display only the rear plate if the front plate is stored inside the vehicle. The House Environment and Transportation Committee will consider both bills.
Minnesota Miles Traveled Tax: Legislation to mandate payment of a “recoupment” surcharge of up to $95 has been introduced in Minnesota. The surcharge would be calculated to levy the highest tax on owners of the most fuel-efficient vehicles. Separate legislation requires the state to take steps to implement a vehicle mileage user fee to tax drivers on actual miles driven. Both bills seek to penalize national efforts to create a more fuel-efficient vehicle fleet by taxing drivers based on fuel economy. As gas tax revenues decrease due to hybrid and electric-vehicle ownership, states are looking for new sources of funding for pet projects.
Nebraska Single Plate: Legislation has been introduced in the Nebraska Legislature to provide for the issuance of a single license plate for passenger cars that were not originally equipped with a bracket on the front of the vehicle to display a license plate. Under the bill, a license decal would be issued with the single plate and displayed on the driver’s side of the windshield. Owners who request a single license plate and license decal would be charged an additional nonrefundable fee of $100 in addition to the cost of the decal.
New Hampshire Antique Trucks: Pro-hobby legislation to include trucks more than 25 years old (regardless of weight) in the definition of eligible “antique motor vehicles” has been introduced. The bill provides the option for the owners of older trucks to take advantage of the many accommodations available to antique motor vehicles. Under state law, the annual registration fee for antique motor vehicles is only $6. In addition, antiques are inspected only every two years, can use year-of-manufacture license plates and are exempted from certain equipment requirements.
New York Single Plate: Legislation to authorize the owner of a motor vehicle to display a single license plate on the rear of the vehicle for a $50 annual fee was reintroduced. The bill will be considered by the Assembly Transportation Committee. The funds collected under the bill would be used to help provide emergency services.
Oregon Miles-Traveled Tax: The state legislature has introduced a bill to convert its current voluntary vehicle miles-traveled (VMT) tax program to a mandatory program. The mandatory program would apply to all high-mileage vehicles that have a rating of 55 miles per gallon or better. These high-mileage vehicles would not pay the gas tax that would apply to all other vehicles. Under the bill, owners could choose to pay a flat annual fee in lieu of a fee based on actual miles driven if a vehicle is subject to the mandatory VMT.
Oregon Ethanol: SEMA is supporting legislation to remove the requirement that all gasoline offered for sale in the state contain a percentage of ethanol. Currently, the state requires that “a retail dealer, nonretail dealer or wholesale dealer may not sell or offer for sale gasoline unless the gasoline contains 10% ethanol by volume.” The bill recognizes that, while the current ethanol mandate does not apply to fuel used in antique, all-terrain and racing vehicles, there has been an inability to obtain unblended gasoline for engines that may be damaged by ethanol.
Pennsylvania Emissions Inspection: Legislation has been introduced in Pennsylvania to extend the emissions-inspection exemption for five years after the model year. Current law exempts only new vehicles that have less than 5,000 miles on their odometer for one year after their first registration.
Virginia Exhaust Systems: Senate legislation to exempt antique motor vehicles from the requirement that they have exhaust systems of a type installed as standard factory equipment or comparable to that designed as standard factory equipment was approved by the full Senate with an amendment. The measure now moves to the House Transportation Committee for consideration. Under the amendment, the bill would apply only to antique vehicles manufactured prior to 1950 containing engines comparable to those designed as standard factory equipment for use on that vehicle.
Virginia Registration: The House Transportation Committee tabled a bill to provide that vehicle registrations would be permanent unless the vehicle ownership or the address where the vehicle is principally garaged changes. Under the measure, the fee for issuance of a permanent vehicle registration would be the same as that previously charged for a two-year registration. It is unclear whether the bill will receive a committee vote prior to legislative adjournment.
Virginia Single Plate: Legislation to provide for the issuance of a single license plate for motor vehicles whose original design does not provide for display of a front plate was tabled by a Transportation subcommittee. Under the bill, the issuance of a second plate would be optional for the vehicle owner. It is unclear whether the bill will receive a committee vote prior to legislative adjournment.
Vermont Titles: SEMA is supporting legislation to ease the burden on hobbyists by requiring the state, upon the owner’s request, to issue titles for vehicles not currently required to be titled in Vermont. These vehicles would include those 15 years old and older. The bill seeks to expand the out-of-state market for older motor vehicles and enhance their value to collectors.
Washington Single Plate: Legislation has been introduced in Washington to allow the issuance of only a single rear-mounted license plate at the option of the vehicle owner. The bill, if enacted into law, would take effect on January 1, 2016.
West Virginia Exhaust Systems: West Virginia has issued a proposal to make it a criminal offense to disturb the peace. Included in the definition of disturbing the peace is the “noise from an exhaust system of any vehicle that is not equipped or constructed so as to prevent any disturbing or unreasonably loud noise.” Vehicle owners convicted of a violation would be fined up to $1,000 per occurrence, confined up to six months in jail or both. SEMA supports competing legislation that would allow vehicle hobbyists to install and use aftermarket exhaust systems that meet a 95-decibel limit under a fair and predictable test.
West Virginia Taxes: A bill to increase property taxes paid by owners of antique motor vehicles was reintroduced. Under the bill, each of these cars would have an assessed value of $5,000 for purposes of the tax, regardless of their actual value, thereby affecting antique vehicle owners whose cars are worth less than $5,000. The House Roads and Transportation Committee will consider the bill. West Virginia law defines an “antique motor vehicle” to mean any motor vehicle that is more than 25 years old and is owned solely as a collector’s item.
Wyoming Single Plate: The full House of Representatives approved legislation by an overwhelming 52–8 vote to provide for the issuance of a single license plate for motor vehicles that were not originally equipped with a display bracket on the front of the vehicle. The bill now moves to the Senate for consideration. If enacted into law, the single-plate allowance would take effect on July 1, 2015.
E15 Ethanol: SEMA is working to enact legislation that would cap the amount of ethanol blended into gasoline at 10% and eliminate the Renewable Fuel Standard’s (RFS) corn-based ethanol requirement. The Renewable Fuel Standard Reform Act would protect consumers by repealing the EPA regulation that permitted fuel to be blended with ethanol at up to 15%. The bill would also eliminate an RFS mandate that 15 billion gallons of corn-based ethanol be blended into the U.S. fuel supply each year from 2015 through 2022. The RFS did not take into consideration the fact that ethanol can cause metal corrosion and dissolve certain plastics and rubbers, especially in older cars that were not constructed with ethanol-resistant materials. SEMA has joined with more than 50 other organizations from the auto/boat industries as well as the food, energy and environmental communities to support passage of the legislation.
Small-Business Regulatory Burdens: The U.S. House of Representatives passed legislation to expand the Regulatory Flexibility Act (RFA) and provide small businesses with a larger say in how federal government agencies draft regulations. Under the bill, federal agencies would be required to consider reasonably foreseeable indirect economic impacts on small businesses. Agencies would also be required to offer regulatory alternatives to minimize any significant economic impact. The U.S. Small Business Administration would be required to issue rules on how federal agencies are to comply with the RFA. Rules issued by federal agencies would be subject to judicial review to ensure compliance with RFA requirements. The bill has been sent to the Senate for consideration.
TPMS Survey: The National Highway Traffic Safety Administration (NHTSA) will be conducting a public survey on the tire-pressure monitoring system (TPMS) rule. The equipment is intended to warn drivers of significant underinflation of tires installed on light-duty vehicles. The safety standard was phased in between 2005 and 2007. A 2011 study found that the equipment was 55.6% effective in preventing severe underinflation. However, the study also demonstrated that the equipment was less effective in older vehicles. The NHTSA intends to focus attention on the operational status of TPMS in the vehicle fleet as well as consumer knowledge, attitudes and awareness of these systems and the causes and costs of TPMS malfunctions.
Copper in Brake Pads: The EPA reached an accord with states and industry associations representing the automakers and major suppliers to reduce the amount of copper used in motor-vehicle brake pads. Copper amounts will be reduced to less than 5% by 2021 and 0.5% by 2025. The voluntary agreement also seeks to reduce the amount of mercury, lead, cadmium, asbestiform fibers and chromium-6 salts in motor vehicle brake pads. California and Washington have already passed requirements to reduce these materials in brake pads.
New-Car Braking Systems: As part of its five-star New Car Assessment Program, the NHTSA intends to add two automatic emergency braking systems to its list of recommended safety features. The so-called “Stars on Cars” label is posted on new-car windows and seeks to provide consumers with safety information when comparison shopping. The five-star rating system reflects performance tests for frontal, side and rollover crashworthiness. It also includes information on whether autos have advanced safety features such as lane-departure and forward-collision warning systems. The emergency “automatic braking” and “dynamic braking” systems are found on many new vehicles. They sense an impending crash and apply the brakes if they are not in use or apply them more fully if already in use in advance of an impending crash. The NHTSA does not intend to mandate the installation of the technology on all new vehicles at this time.