SEMA News—January 2023

LEGISLATIVE AND TECHNICAL AFFAIRS

Law and Order

By Daniel Ingber

FEDERAL UPDATE

RPM ActRPM Act: At the time of publication, the U.S. Senate Environment and Public Works (EPW) Committee and the U.S. House Energy & Commerce Committee are negotiating on the Recognizing the Protection of Motorsports Act (RPM Act) for potential consideration at the end of the 2021–2022 session of Congress. RPM Act updates will be forthcoming in the next issue. The RPM Act is bipartisan, pro-motorsports, pro-business legislation that clarifies it is legal under the Clean Air Act (CAA) to make emissions-related changes to convert a street vehicle into a dedicated race car. The bill, if enacted into law, would also confirm that it is legal to produce, market and install racing equipment. In 2015, the U.S. Environmental Protection Agency (EPA) issued a draft rule stating that such conversions were illegal, as were products used to make the conversions. The EPA withdrew the draft rule following a huge, SEMA-led public outcry but still stands by this controversial interpretation of the CAA. The legislation (H.R. 3281/S. 2736) is sponsored by Representatives Patrick McHenry (R-NC) and Raul Ruiz (D-CA) and Senators Richard Burr (R-NC) and Jon Tester (D-MT). The RPM Act has more than 165 bipartisan co-sponsors, making it one of the most broadly supported bills in Congress.

Section 301 Tariffs: The Office of the U.S. Trade Representative (USTR) requested comments from interested parties on the Section 301 tariffs as part of the statutorily required four-year review process. The review covers tariffs on all four Lists, as Lists 1 and 2 were implemented more than four years ago and Lists 3 and 4a are considered modifications of these actions. USTR said it is seeking “public comments on the effectiveness of the actions in achieving the objectives of the investigation, other actions that could be taken, and the effects of such actions on the United States economy, including consumers.” The docket for comments will close on January 17. In 2018, the USTR instituted a Section 301 investigation of Chinese trade practices and imposed $50 billion in tariffs on a variety of goods on Lists 1 and 2, including miscellaneous metal and rubber parts. After China responded with retaliatory tariffs, the United States imposed the additional List 3 and 4a tariffs. The List 3 tariffs apply to most auto parts.

Off-Road Trails Near Moab: SEMA submitted comments to the U.S. Bureau of Land Management (BLM) on its draft update to the travel-management plan for the Labyrinth Rims/Gemini Bridges Special Recreation Management Area near Moab, Utah. SEMA and the off-road community support Alternative A, which is the status quo. SEMA and other off-road groups oppose the other three alternatives (B, C and D) since they would close up to 40% of current off-road trails. The travel management area covers more than 300,000 acres of BLM-managed land in portions of Grand County, Utah, and includes highly valued OHV trails that draw outdoor enthusiasts from around the world. SEMA criticized the BLM’s plan for failing to consider opening more OHV routes since motorized recreation in the area has almost doubled since the last travel-management plan was adopted in 2008. SEMA underscored the value of motorized recreation both in terms of its economic impact to the region and importance in providing OHV access to individuals and families. SEMA also noted that camping is a critical component of the area’s recreational experience, and camping issues were not adequately addressed in the BLM’s plans.

Independent Contractor Reclassification: The Biden administration proposed a more stringent test for determining when companies must count independent contractors as employees. The U.S. Department of Labor (DOL) previously withdrew a 2021 Trump administration rule that made it easier for companies to classify more workers as independent contractors. Under the Fair Labor Standards Act (FLSA), employees are eligible for certain protections such as minimum wage, medical leave and overtime pay that are not required for contractors. The proposed rule would apply the test that was used before the 2021 rule to determine how a worker should be classified. The proposed test will consider six factors: the nature and degree of the worker’s control over the work, the worker’s opportunity for profit or loss based on personal initiative or investment, investments by the worker and the employer, the degree of permanence of the working relationship, the extent to which the work performed is an integral part of the employer’s business, and the degree of skill and initiative exhibited by the worker. The rule would also apply a totality-of-the-circumstances analysis of the economic reality test when considering the whole activity, an approach that could make it easier to define a gig worker as an employee.

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