SEMA News - May 2010 

U.S. Manufacturers to Be Matched With Buyers From the World’s Largest, Fastest-Growing Automotive Market

By Linda Spencer

The specialty-equipment market in China today is strikingly similar to the U.S. market in the early days of the car customizing scene during the ’50s and ‘60s. As had been the case 40 to 50 years ago in the United States, the laws and regulations governing the industry in China are just being written; the distribution system is still being established; and the knowledge and skill levels of installers, distributors and consumers are on a sharp learning curve. Even so, the excitement for the future is high among stakeholders. There are positive signs in the Chinese economy. A now definable and growing so-called middle class is currently estimated at 100–150 million people. Strong car sales exceeded the sales volume of the United States in 2009, and China has become the world’s third-largest market for luxury goods behind Japan and the United States. SEMA has therefore created a unique program designed to assist its members in exploring the sales potential for their products in China.

The SEMA China Business Development Conference will be held September 23–26 in Beijing in conjunction with the China International Auto Parts Expo (CIAPE). Utilizing a one-on-one, appointment-based approach, the conference is a low-cost way for SEMA members to explore business potential in China and connect with the leading players in the market. U.S. manufacturers will be paired with relevant decision-making-level Chinese buyers in up to a dozen private, pre-scheduled meetings. The program includes exclusive networking events and a VIP tour of CIAPE.

Registration for the event is now available here. A single, low fee provides each exhibitor with a private meeting space, meeting furniture and equipment, a professional interpreter, most meals and hotel accommodations for the duration of the event. The only cost not included is airfare.

“The Chinese vehicle customization market is in its infancy, but it’s quickly growing,” said Chris Kersting, SEMA president and CEO. “It presents the single biggest potential opportunity for members looking to expand overseas. Given that the market is still early in development, we have built a low-cost program that is high in potential return.”

The SEMA China Business Development Conference enjoys the endorsement of CIAPE and the Chinese government.
“We welcome SEMA members to participate in the first SEMA China Business Development Conference,” said Rengui Li, CIAPE chairman. “SEMA manufacturers will discover that there is a high demand for vehicle accessorization and tuning in China. Participants will hear directly from Chinese buyers and learn how they can succeed in the country.”

Now is the time for savvy international companies to explore what promises to be the world’s largest specialty-equipment market. On October 1, 2008, the Chinese national government approved the legal installation and marketing of 506 automotive parts and accessories, though, the use of many other products is still in limbo. Many are technically illegal but are often installed on vehicles. The Chinese Ministry of Commerce (MOFCOM) has been a strong supporter of liberalizing regulations regarding specialty-equipment products and has been working for the last three years with the relevant Chinese ministries to legalize the installation and use of a wide range of specialty products.

“MOFCOM supports the growth of the automotive specialty-equipment market in China,” said Zhi Luxun, deputy director general of the department of mechanic, electronic and high-tech industry for the Ministry of Commerce. “MOFCOM has been working with the relevant agencies in China to continue the process begun several years ago to open this market. There is definitely a desire among Chinese consumers to personalize their vehicles, and the expected further law changes will enable this industry to grow here in China.”

	Participants in the SEMA China Business Development Conference, to be held September 23–26, 2010, in conjunction with the China International Auto Parts Expo, will have the chance to network with Chinese buyers and distributors, in addition to attending private, pre-arranged, one-on-one meetings with key Chinese retailers and wholesalers.

China is already the third-largest export market in the world. U.S. exports of goods to China totaled $71.5 billion for the year in 2008. There is substantial market potential for all goods, but the potential for automotive-related products specifically is huge. With only 10 cars per 1,000 people (compared to 940 per 1,000 in the United States), all of the world’s major car companies are making large investments in the Chinese market and are counting on sales there to bolster weak sales elsewhere in the world. While foreign companies for a wide variety of brands are increasingly familiar with the sales potential in such coastal cities as Beijing, Shanghai and Guangzhou, the possibilities extend well beyond those sites. China has nearly 100 cities with populations exceeding 1 million people, and there are 10 cities the size of New York. It’s these other cities—growing at an average 11% annually—that are expected to generate the greatest potential for sales.

In a recent report entitled “Doing Business in China: 2009 Country Commercial Guide for U.S. Companies,” U.S. government officials noted that “…China often lacks predictability in its business environment. A transparent and consistent body of laws and regulations would make the Chinese market more predictable. However, China’s current legal and regulatory system can be opaque, inconsistent and often arbitrary. Implementation of the law is inconsistent. Lack of effective Chinese government protection of intellectual property rights is a particularly damaging issue for many American companies—both those that operate in China and those that do not have had their products stolen by Chinese companies.”

The SEMA China Business Development Conference, coupled with research by companies, can assist in a careful and deliberate entry into the Chinese market to help avoid the common pitfalls befalling U.S. companies, including intellectual property rights violations, neglecting to properly vet local business partners or customers and being unaware of Chinese laws.

Additional details about the SEMA CIAPE China Business Development Conference are available here. Broader resources for SEMA members interested in expanding their overseas sales or for additional information on the SEMA CIAPE China Business Development Conference are available by contacting Linda Spencer.  

 

SEMA News - May 2010 

U.S. Manufacturers to Be Matched With Buyers From the World’s Largest, Fastest-Growing Automotive Market

By Linda Spencer

The specialty-equipment market in China today is strikingly similar to the U.S. market in the early days of the car customizing scene during the ’50s and ‘60s. As had been the case 40 to 50 years ago in the United States, the laws and regulations governing the industry in China are just being written; the distribution system is still being established; and the knowledge and skill levels of installers, distributors and consumers are on a sharp learning curve. Even so, the excitement for the future is high among stakeholders. There are positive signs in the Chinese economy. A now definable and growing so-called middle class is currently estimated at 100–150 million people. Strong car sales exceeded the sales volume of the United States in 2009, and China has become the world’s third-largest market for luxury goods behind Japan and the United States. SEMA has therefore created a unique program designed to assist its members in exploring the sales potential for their products in China.

The SEMA China Business Development Conference will be held September 23–26 in Beijing in conjunction with the China International Auto Parts Expo (CIAPE). Utilizing a one-on-one, appointment-based approach, the conference is a low-cost way for SEMA members to explore business potential in China and connect with the leading players in the market. U.S. manufacturers will be paired with relevant decision-making-level Chinese buyers in up to a dozen private, pre-scheduled meetings. The program includes exclusive networking events and a VIP tour of CIAPE.

Registration for the event is now available here. A single, low fee provides each exhibitor with a private meeting space, meeting furniture and equipment, a professional interpreter, most meals and hotel accommodations for the duration of the event. The only cost not included is airfare.

“The Chinese vehicle customization market is in its infancy, but it’s quickly growing,” said Chris Kersting, SEMA president and CEO. “It presents the single biggest potential opportunity for members looking to expand overseas. Given that the market is still early in development, we have built a low-cost program that is high in potential return.”

The SEMA China Business Development Conference enjoys the endorsement of CIAPE and the Chinese government.
“We welcome SEMA members to participate in the first SEMA China Business Development Conference,” said Rengui Li, CIAPE chairman. “SEMA manufacturers will discover that there is a high demand for vehicle accessorization and tuning in China. Participants will hear directly from Chinese buyers and learn how they can succeed in the country.”

Now is the time for savvy international companies to explore what promises to be the world’s largest specialty-equipment market. On October 1, 2008, the Chinese national government approved the legal installation and marketing of 506 automotive parts and accessories, though, the use of many other products is still in limbo. Many are technically illegal but are often installed on vehicles. The Chinese Ministry of Commerce (MOFCOM) has been a strong supporter of liberalizing regulations regarding specialty-equipment products and has been working for the last three years with the relevant Chinese ministries to legalize the installation and use of a wide range of specialty products.

“MOFCOM supports the growth of the automotive specialty-equipment market in China,” said Zhi Luxun, deputy director general of the department of mechanic, electronic and high-tech industry for the Ministry of Commerce. “MOFCOM has been working with the relevant agencies in China to continue the process begun several years ago to open this market. There is definitely a desire among Chinese consumers to personalize their vehicles, and the expected further law changes will enable this industry to grow here in China.”

	Participants in the SEMA China Business Development Conference, to be held September 23–26, 2010, in conjunction with the China International Auto Parts Expo, will have the chance to network with Chinese buyers and distributors, in addition to attending private, pre-arranged, one-on-one meetings with key Chinese retailers and wholesalers.

China is already the third-largest export market in the world. U.S. exports of goods to China totaled $71.5 billion for the year in 2008. There is substantial market potential for all goods, but the potential for automotive-related products specifically is huge. With only 10 cars per 1,000 people (compared to 940 per 1,000 in the United States), all of the world’s major car companies are making large investments in the Chinese market and are counting on sales there to bolster weak sales elsewhere in the world. While foreign companies for a wide variety of brands are increasingly familiar with the sales potential in such coastal cities as Beijing, Shanghai and Guangzhou, the possibilities extend well beyond those sites. China has nearly 100 cities with populations exceeding 1 million people, and there are 10 cities the size of New York. It’s these other cities—growing at an average 11% annually—that are expected to generate the greatest potential for sales.

In a recent report entitled “Doing Business in China: 2009 Country Commercial Guide for U.S. Companies,” U.S. government officials noted that “…China often lacks predictability in its business environment. A transparent and consistent body of laws and regulations would make the Chinese market more predictable. However, China’s current legal and regulatory system can be opaque, inconsistent and often arbitrary. Implementation of the law is inconsistent. Lack of effective Chinese government protection of intellectual property rights is a particularly damaging issue for many American companies—both those that operate in China and those that do not have had their products stolen by Chinese companies.”

The SEMA China Business Development Conference, coupled with research by companies, can assist in a careful and deliberate entry into the Chinese market to help avoid the common pitfalls befalling U.S. companies, including intellectual property rights violations, neglecting to properly vet local business partners or customers and being unaware of Chinese laws.

Additional details about the SEMA CIAPE China Business Development Conference are available here. Broader resources for SEMA members interested in expanding their overseas sales or for additional information on the SEMA CIAPE China Business Development Conference are available by contacting Linda Spencer.  

 

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.

STATE UPDATE

Colorado

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.

Kansas

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.

Michigan

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.

Nebraska

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.

Ohio

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.

Oklahoma

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.

Utah

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.

Washington

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.  

FEDERAL UPDATE

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.  

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.

STATE UPDATE

Colorado

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.

Kansas

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.

Michigan

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.

Nebraska

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.

Ohio

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.

Oklahoma

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.

Utah

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.

Washington

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.  

FEDERAL UPDATE

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.  

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.

STATE UPDATE

Colorado

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.

Kansas

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.

Michigan

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.

Nebraska

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.

Ohio

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.

Oklahoma

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.

Utah

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.

Washington

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.  

FEDERAL UPDATE

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.  

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.

STATE UPDATE

Colorado

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.

Kansas

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.

Michigan

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.

Nebraska

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.

Ohio

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.

Oklahoma

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.

Utah

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.

Washington

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.  

FEDERAL UPDATE

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.  

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.

STATE UPDATE

Colorado

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.

Kansas

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.

Michigan

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.

Nebraska

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.

Ohio

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.

Oklahoma

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.

Utah

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.

Washington

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.  

FEDERAL UPDATE

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.  

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.

STATE UPDATE

Colorado

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.

Kansas

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.

Michigan

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.

Nebraska

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.

Ohio

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.

Oklahoma

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.

Utah

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.

Washington

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.  

FEDERAL UPDATE

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.  

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.

STATE UPDATE

Colorado

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.

Kansas

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.

Michigan

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.

Nebraska

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.

Ohio

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.

Oklahoma

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.

Utah

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.

Washington

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.  

FEDERAL UPDATE

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.  

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.

STATE UPDATE

Colorado

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.

Kansas

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.

Michigan

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.

Nebraska

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.

Ohio

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.

Oklahoma

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.

Utah

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.

Washington

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.  

FEDERAL UPDATE

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.