SEMA News—February 2022

LEGISLATIVE AND TECHNICAL AFFAIRS

Law & Order

By Stuart Gosswein

FEDERAL UPDATE
Tarriffs
Photo credit: Shutterstock.com

Steel and Aluminum Tariffs: The United States and the European Union (EU) have agreed to end a three-year dispute over steel and aluminum tariffs. Effective January 1, 2022, the United States no longer imposed 25% tariffs on steel (sheets, bars, tubes, etc.) and 10% on aluminum and is instead using a quota system for those imports from EU countries. The agreement will also apply to derivative products made in the EU and subject to the tariffs, such as steel bumper stampings. The Trump administration imposed the metal tariffs in 2018 under Section 232 of U.S. trade law, citing that dependence on foreign sources posed a national security threat. Argentina, Australia, Brazil and South Korea were excluded based on quotas, and Canada and Mexico were eventually excluded based on the United States–Mexico–Canada Agreement. Although the tariffs have been imposed worldwide, a primary issue to be addressed is global over-production of the metals, especially by China.

RPM Act: The Recognizing the Protection of Motorsports Act (RPM Act; H.R. 3281 and
S. 2736) clarifies that it is legal under the Clean Air Act to make emissions-related changes to convert a street vehicle into a dedicated race car. If enacted into law, it will also confirm that it is legal to produce, market and install racing equipment. SEMA’s efforts to pass the RPM Act are backed by unprecedented grassroots support in the 2021–2022 session of Congress, as enthusiasts and industry have sent more than 1.5 million letters in support of the bill to members of Congress, leading to a rapid expansion of co-sponsors. H.R. 3281 has 112 co-sponsors (88 Republicans and 25 Democrats), and S. 2736 has 22 co-sponsors (15 Republicans and seven Democrats). The letters that enthusiasts and businesses have sent in support of the RPM Act through www.saveourracecars.com are being noticed on Capitol Hill and continue to make a difference, but there’s more that you can do to pass the RPM Act:

  • Sign a letter to your lawmakers on company letterhead. Email erics@sema.org for a template and for more information.
  • Post about the RPM Act on your company’s social-media accounts using the digital assets toolkit: https://sites.sema.org/rpmtools.
  • Become a member of SEMA and learn more about SEMA’s Political Action Committee (SEMA PAC) at www.semapac.com. SEMA PAC allows SEMA members to support the lawmakers who stand up for the industry in Washington.

Infrastructure Bill Signed Into Law: In early November, President Biden signed the bipartisan “Infrastructure Investment and Jobs Act” (IIJA) into law. The IIJA represents a historic investment in infrastructure after similar efforts failed in previous years. The law will help address deteriorating roads, bridges, tunnels and ports that have been neglected across the country and have contributed to supply chain bottlenecks in recent months.

The IIJA provides $550 billion in new funding over five years for all modes of transportation, water, power and energy, public lands, and broadband. Highlights include:

  • $110 billion to repair highways, bridges, and roads
  • $39 billion to expand and modernize public transit systems
  • $7.5 billion for electric vehicle charging infrastructure
  • $65 billion to update and expand the power grid
  • $66 billion to improve passenger and freight rail service
  • $15.6 billion for the Highway Safety Improvement Program
  • $42 billion in new spending for ports and airports
  • $47 billion in infrastructure upgrades to address climate change and cyberattacks
  • $65 billion for broadband infrastructure and development

The law also directs the National Highway Traffic Safety Administration to issue several rules to promote vehicle safety for new vehicles. These include mandating that all new vehicles have monitoring systems to detect drunk drivers as early as 2026; rear-seat reminders to alert parents if a child is left in the back seat as early as 2025; and automatic emergency braking and lane departure warnings, although no date was set for this rule. Most automakers joined a voluntary agreement under the Obama administration to install automatic emergency braking equipment on a majority of their models by September 2022.

Employee Retention Tax Credit: A provision in the recently signed IIJA eliminated the Employee Retention Tax Credit (ERTC) for the fourth quarter of 2021, moving the deadline for eligible wages up to September 30 from December 31. The ERTC was a COVID-19 economic-relief program that was enacted in 2020 and expanded in 2021, offering a refundable tax credit of 70% of up to $10,000 in wages per quarter paid by an eligible employer in 2021 to encourage businesses impacted by COVID-19 to keep employees on their payroll. This means the 2021 tax credit was potentially $21,000 per employee ($7,000 for each quarter). Companies with 500 or fewer employees can file a 2021 claim if they have experienced a 20% or more decline of gross receipts in a quarter compared to the same quarter in 2019. Employers claim the ERTC by withholding payroll taxes for qualified employee wages.

STATE UPDATE

New York—Exhaust Noise: New York Governor Kathy Hochul signed into law a bill that allows law enforcement to issue larger fines for motorists operating vehicles that have had their mufflers and catalytic converters removed. SEMA was successful in advocating for several amendments to the original proposal, including the removal of provisions that would have limited motor vehicles to 60 dB of exhaust noise, mandated a fixed $1,000 fine for violations, and equipped police cars with sound meters to enforce the law.

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