SEMA News - August 2009

LEGISLATIVE AND TECHNICAL AFFAIRS

By Steve McDonald

Law and Order

Law and Order is an update of some of the most recent federal and state legislative and regulatory issues that could potentially impact the automotive specialty-equipment industry. These include issues affecting small-business owners and their employees.

California

Emissions Tests

SEMA-opposed legislation to require annual smog check inspections for vehicles 15 years old and older was held in the California Assembly Appropriations Committee and is essentially dead for the year. The bill would also have required that funds generated through the additional inspection fees be deposited into an account that could have been used to scrap older cars. Pre-1976 motor vehicles would have remained exempt under the measure. SEMA launched a statewide lobbying campaign to oppose the bill.

Scrappage

SEMA is opposing a California Air Resources Board (CARB) proposal to spend roughly $30 million annually to augment the state’s existing vehicle scrappage program. The proposal would provide incentives for vehicles not currently eligible under the Consumer Assistance Program by removing the existing requirements that vehicles be subject to and fail smog check to participate. CARB is specifically targeting for scrappage pre-1976 vehicles that are not currently required to undergo smog check inspections. According to CARB, allowing vehicles that are not currently undergoing registration or that have passed their smog check to participate greatly expands the vehicle population that can be retired. Participants would receive $1,000 per vehicle or $1,500 per vehicle if they meet low-income requirements. The proposal would also establish a pilot voucher program in the south coast and San Joaquin Valley air basins that targets the highest-emitting vehicles and requires their replacement with newer, cleaner vehicles. Consumers would retire their vehicles at participating dismantlers, receiving an immediate compensation of $1,000 to $1,500 for vehicle retirement. Consumers could then redeem their vouchers at participating car dealerships toward the purchase of replacement vehicles. CARB is proposing that the voucher compensation be $2,000 or $2,500 per vehicle, depending on income level.

Michigan

Inoperable Vehicles

A version of SEMA-model legislation has been reintroduced in the Michigan State Legislature that would outlaw local zoning ordinances that prohibit the hobby of collecting and restoring motor vehicles. Junked, wrecked or inoperable vehicles (including parts cars) stored on private property could still require screening from public view by fencing, vegetation or other means. The bill has been referred to the Senate Committee on Local, Urban and State Affairs.

Ohio

Street Rods/Customs

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 has been reintroduced in the Ohio State Legislature. 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.

Oregon

Aftermarket Parts

The Oregon House of Representatives approved an alternative to legislation that originally sought to prohibit the sale and distribution of aftermarket motor vehicle parts if alternatives are available that “decrease greenhouse gas emissions from motor vehicles.” Under the alternative, negotiated between SEMA and the Oregon Department of Environmental Quality, the bill would only give the department authority to adopt the present California certification process for aftermarket emissions-related parts, allowing parts manufacturers to meet one uniform standard rather than a patchwork of multiple state standards. The amended legislation will also incorporate a California law that requires state regulators to develop a tire fuel-efficiency program for passenger-car and light-truck replacement tires. As in California, Oregon will include a SEMA-drafted provision to exempt limited-production tires (15,000 or less annually), deep-tread snow tires, limited-use spares, motorcycle tires and tires manufactured for use on off-road vehicles. The bill is now being considered by the Oregon Senate.

Texas

Street Rods/Customs

SEMA-model legislation to create a vehicle registration classification for street rods, custom vehicles and replicas and provide for special license plates for these vehicles did not receive a vote by the Texas House of Representatives before the legislature’s crossover deadline. The crossover deadline requires legislation to be approved by a certain date by at least one of the legislative chambers, House or Senate. Bills must be approved by both the House and Senate in order to be sent to the governor and enacted into law.

FEDERAL UPDATE

Vehicle Scrappage

SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program.

After months of contentious debate, Congress passed “cash for clunkers” legislation that will pay consumers to scrap cars and trucks that get 18 miles per gallon or less in exchange for a cash voucher to buy a new car. The one-year program is primarily intended to spur car sales, but lawmakers insisted on including a scrappage component. Consumers will receive either $3,500 or $4,500, depending on the fuel economy improvement of the new vehicle. SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program. This provision serves to safeguard vehicles that may possess unique historic or aesthetic value qualities and are irreplaceable to hobbyists as a source of restoration parts. The law allows all parts to be recycled except the engine. SEMA and other aftermarket associations convinced lawmakers to permit the drivetrain to be recycled if the transmission, driveshaft or rear end are sold as separate parts. The vehicle scrappage program primarily targets SUVs, pickups and minivans, since most passenger cars manufactured during the last 25 years get more than the 18 mpg combined city/highway requirement. SEMA maintained that a better environmental approach would have been to support vehicle repairs, installation of specialty equipment to reduce emissions and increase fuel economy, and engine recycling.

Fuel Economy and CO2 Emissions

The Obama administration will set tough, new fuel-economy standards for model-year (MY) 2012-2016 cars and trucks and will simultaneously reduce carbon dioxide (CO2) emissions through a national standard. The decision ends years of debate between California, the federal government and the automakers over who can regulate CO2 emissions. Fuel economy and CO2 emissions are directly related, since CO2 is released in proportion to the amount of carbon-based fuel that is burned. In 2007, the Bush administration blocked implementation of a California CO2 rule that had been adopted by 13 other states. California will now rewrite its CO2 rule to match the national standard. The National Highway Traffic Safety Administration (NHTSA) will set Corporate Average Fuel Economy (CAFE) standards for MY 2012-2016 vehicles that nearly match CO2 emission standards adopted by California. The EPA will also establish corresponding CO2 emissions standards using its authority under the Clean Air Act. The average CAFE rating will be 35.5 mpg in 2016, based on a combined 39 mpg rating for passenger cars and 30 mpg for light trucks. The EPA will set a CO2 emissions standard of 250 grams per mile for vehicles sold in 2016, roughly equivalent to 35.5 mpg.

Health Care Reform

SEMA is working in an alliance with the National Federation of Independent Business and the Small Business Coalition for Affordable Healthcare to enact legislation that will reduce skyrocketing premiums and protect small companies from costly mandates.

Small-Business Credit Relief

The U.S. Small Business Administration will provide a 100% guarantee on America’s Recovery Capital (ARC) loans, a $255 million program established under the Recovery Act of 2009. The program will provide interest-free, deferred-payment loans of up to $35,000 to established for-profit small businesses that need short-term help making principal and interest payments on existing debt such as credit card obligations, capital leases and notes payable to vendors/suppliers. Repayment of the loan principal begins 12 months after the final disbursement and extends over a five-year period. The program will last until September 2010 or until the $255 million has been spent, whichever comes first. ARC loans are provided by commercial lenders, not the SBA.

OHV Access to Public Lands

A House subcommittee held a hearing on a SEMA-opposed bill called the Northern Rockies Ecosystem Protection Act, which would designate as wilderness 19 million acres of land in Idaho, Montana, Wyoming, Oregon and Washington. By law, roads and motorized vehicles are generally prohibited in wilderness areas. The issue is consequential to SEMA members, since off-roaders would have less riding areas in the region and potentially less demand for off-highway (OHV) equipment. SEMA contends that the legislation is overly broad in scope and does not reflect the views of local communities and stakeholders on how the land should be managed.

SEMA News - August 2009

LEGISLATIVE AND TECHNICAL AFFAIRS

By Steve McDonald

Law and Order

Law and Order is an update of some of the most recent federal and state legislative and regulatory issues that could potentially impact the automotive specialty-equipment industry. These include issues affecting small-business owners and their employees.

California

Emissions Tests

SEMA-opposed legislation to require annual smog check inspections for vehicles 15 years old and older was held in the California Assembly Appropriations Committee and is essentially dead for the year. The bill would also have required that funds generated through the additional inspection fees be deposited into an account that could have been used to scrap older cars. Pre-1976 motor vehicles would have remained exempt under the measure. SEMA launched a statewide lobbying campaign to oppose the bill.

Scrappage

SEMA is opposing a California Air Resources Board (CARB) proposal to spend roughly $30 million annually to augment the state’s existing vehicle scrappage program. The proposal would provide incentives for vehicles not currently eligible under the Consumer Assistance Program by removing the existing requirements that vehicles be subject to and fail smog check to participate. CARB is specifically targeting for scrappage pre-1976 vehicles that are not currently required to undergo smog check inspections. According to CARB, allowing vehicles that are not currently undergoing registration or that have passed their smog check to participate greatly expands the vehicle population that can be retired. Participants would receive $1,000 per vehicle or $1,500 per vehicle if they meet low-income requirements. The proposal would also establish a pilot voucher program in the south coast and San Joaquin Valley air basins that targets the highest-emitting vehicles and requires their replacement with newer, cleaner vehicles. Consumers would retire their vehicles at participating dismantlers, receiving an immediate compensation of $1,000 to $1,500 for vehicle retirement. Consumers could then redeem their vouchers at participating car dealerships toward the purchase of replacement vehicles. CARB is proposing that the voucher compensation be $2,000 or $2,500 per vehicle, depending on income level.

Michigan

Inoperable Vehicles

A version of SEMA-model legislation has been reintroduced in the Michigan State Legislature that would outlaw local zoning ordinances that prohibit the hobby of collecting and restoring motor vehicles. Junked, wrecked or inoperable vehicles (including parts cars) stored on private property could still require screening from public view by fencing, vegetation or other means. The bill has been referred to the Senate Committee on Local, Urban and State Affairs.

Ohio

Street Rods/Customs

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 has been reintroduced in the Ohio State Legislature. 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.

Oregon

Aftermarket Parts

The Oregon House of Representatives approved an alternative to legislation that originally sought to prohibit the sale and distribution of aftermarket motor vehicle parts if alternatives are available that “decrease greenhouse gas emissions from motor vehicles.” Under the alternative, negotiated between SEMA and the Oregon Department of Environmental Quality, the bill would only give the department authority to adopt the present California certification process for aftermarket emissions-related parts, allowing parts manufacturers to meet one uniform standard rather than a patchwork of multiple state standards. The amended legislation will also incorporate a California law that requires state regulators to develop a tire fuel-efficiency program for passenger-car and light-truck replacement tires. As in California, Oregon will include a SEMA-drafted provision to exempt limited-production tires (15,000 or less annually), deep-tread snow tires, limited-use spares, motorcycle tires and tires manufactured for use on off-road vehicles. The bill is now being considered by the Oregon Senate.

Texas

Street Rods/Customs

SEMA-model legislation to create a vehicle registration classification for street rods, custom vehicles and replicas and provide for special license plates for these vehicles did not receive a vote by the Texas House of Representatives before the legislature’s crossover deadline. The crossover deadline requires legislation to be approved by a certain date by at least one of the legislative chambers, House or Senate. Bills must be approved by both the House and Senate in order to be sent to the governor and enacted into law.

FEDERAL UPDATE

Vehicle Scrappage

SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program.

After months of contentious debate, Congress passed “cash for clunkers” legislation that will pay consumers to scrap cars and trucks that get 18 miles per gallon or less in exchange for a cash voucher to buy a new car. The one-year program is primarily intended to spur car sales, but lawmakers insisted on including a scrappage component. Consumers will receive either $3,500 or $4,500, depending on the fuel economy improvement of the new vehicle. SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program. This provision serves to safeguard vehicles that may possess unique historic or aesthetic value qualities and are irreplaceable to hobbyists as a source of restoration parts. The law allows all parts to be recycled except the engine. SEMA and other aftermarket associations convinced lawmakers to permit the drivetrain to be recycled if the transmission, driveshaft or rear end are sold as separate parts. The vehicle scrappage program primarily targets SUVs, pickups and minivans, since most passenger cars manufactured during the last 25 years get more than the 18 mpg combined city/highway requirement. SEMA maintained that a better environmental approach would have been to support vehicle repairs, installation of specialty equipment to reduce emissions and increase fuel economy, and engine recycling.

Fuel Economy and CO2 Emissions

The Obama administration will set tough, new fuel-economy standards for model-year (MY) 2012-2016 cars and trucks and will simultaneously reduce carbon dioxide (CO2) emissions through a national standard. The decision ends years of debate between California, the federal government and the automakers over who can regulate CO2 emissions. Fuel economy and CO2 emissions are directly related, since CO2 is released in proportion to the amount of carbon-based fuel that is burned. In 2007, the Bush administration blocked implementation of a California CO2 rule that had been adopted by 13 other states. California will now rewrite its CO2 rule to match the national standard. The National Highway Traffic Safety Administration (NHTSA) will set Corporate Average Fuel Economy (CAFE) standards for MY 2012-2016 vehicles that nearly match CO2 emission standards adopted by California. The EPA will also establish corresponding CO2 emissions standards using its authority under the Clean Air Act. The average CAFE rating will be 35.5 mpg in 2016, based on a combined 39 mpg rating for passenger cars and 30 mpg for light trucks. The EPA will set a CO2 emissions standard of 250 grams per mile for vehicles sold in 2016, roughly equivalent to 35.5 mpg.

Health Care Reform

SEMA is working in an alliance with the National Federation of Independent Business and the Small Business Coalition for Affordable Healthcare to enact legislation that will reduce skyrocketing premiums and protect small companies from costly mandates.

Small-Business Credit Relief

The U.S. Small Business Administration will provide a 100% guarantee on America’s Recovery Capital (ARC) loans, a $255 million program established under the Recovery Act of 2009. The program will provide interest-free, deferred-payment loans of up to $35,000 to established for-profit small businesses that need short-term help making principal and interest payments on existing debt such as credit card obligations, capital leases and notes payable to vendors/suppliers. Repayment of the loan principal begins 12 months after the final disbursement and extends over a five-year period. The program will last until September 2010 or until the $255 million has been spent, whichever comes first. ARC loans are provided by commercial lenders, not the SBA.

OHV Access to Public Lands

A House subcommittee held a hearing on a SEMA-opposed bill called the Northern Rockies Ecosystem Protection Act, which would designate as wilderness 19 million acres of land in Idaho, Montana, Wyoming, Oregon and Washington. By law, roads and motorized vehicles are generally prohibited in wilderness areas. The issue is consequential to SEMA members, since off-roaders would have less riding areas in the region and potentially less demand for off-highway (OHV) equipment. SEMA contends that the legislation is overly broad in scope and does not reflect the views of local communities and stakeholders on how the land should be managed.

SEMA News - August 2009

LEGISLATIVE AND TECHNICAL AFFAIRS

By Steve McDonald

Law and Order

Law and Order is an update of some of the most recent federal and state legislative and regulatory issues that could potentially impact the automotive specialty-equipment industry. These include issues affecting small-business owners and their employees.

California

Emissions Tests

SEMA-opposed legislation to require annual smog check inspections for vehicles 15 years old and older was held in the California Assembly Appropriations Committee and is essentially dead for the year. The bill would also have required that funds generated through the additional inspection fees be deposited into an account that could have been used to scrap older cars. Pre-1976 motor vehicles would have remained exempt under the measure. SEMA launched a statewide lobbying campaign to oppose the bill.

Scrappage

SEMA is opposing a California Air Resources Board (CARB) proposal to spend roughly $30 million annually to augment the state’s existing vehicle scrappage program. The proposal would provide incentives for vehicles not currently eligible under the Consumer Assistance Program by removing the existing requirements that vehicles be subject to and fail smog check to participate. CARB is specifically targeting for scrappage pre-1976 vehicles that are not currently required to undergo smog check inspections. According to CARB, allowing vehicles that are not currently undergoing registration or that have passed their smog check to participate greatly expands the vehicle population that can be retired. Participants would receive $1,000 per vehicle or $1,500 per vehicle if they meet low-income requirements. The proposal would also establish a pilot voucher program in the south coast and San Joaquin Valley air basins that targets the highest-emitting vehicles and requires their replacement with newer, cleaner vehicles. Consumers would retire their vehicles at participating dismantlers, receiving an immediate compensation of $1,000 to $1,500 for vehicle retirement. Consumers could then redeem their vouchers at participating car dealerships toward the purchase of replacement vehicles. CARB is proposing that the voucher compensation be $2,000 or $2,500 per vehicle, depending on income level.

Michigan

Inoperable Vehicles

A version of SEMA-model legislation has been reintroduced in the Michigan State Legislature that would outlaw local zoning ordinances that prohibit the hobby of collecting and restoring motor vehicles. Junked, wrecked or inoperable vehicles (including parts cars) stored on private property could still require screening from public view by fencing, vegetation or other means. The bill has been referred to the Senate Committee on Local, Urban and State Affairs.

Ohio

Street Rods/Customs

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 has been reintroduced in the Ohio State Legislature. 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.

Oregon

Aftermarket Parts

The Oregon House of Representatives approved an alternative to legislation that originally sought to prohibit the sale and distribution of aftermarket motor vehicle parts if alternatives are available that “decrease greenhouse gas emissions from motor vehicles.” Under the alternative, negotiated between SEMA and the Oregon Department of Environmental Quality, the bill would only give the department authority to adopt the present California certification process for aftermarket emissions-related parts, allowing parts manufacturers to meet one uniform standard rather than a patchwork of multiple state standards. The amended legislation will also incorporate a California law that requires state regulators to develop a tire fuel-efficiency program for passenger-car and light-truck replacement tires. As in California, Oregon will include a SEMA-drafted provision to exempt limited-production tires (15,000 or less annually), deep-tread snow tires, limited-use spares, motorcycle tires and tires manufactured for use on off-road vehicles. The bill is now being considered by the Oregon Senate.

Texas

Street Rods/Customs

SEMA-model legislation to create a vehicle registration classification for street rods, custom vehicles and replicas and provide for special license plates for these vehicles did not receive a vote by the Texas House of Representatives before the legislature’s crossover deadline. The crossover deadline requires legislation to be approved by a certain date by at least one of the legislative chambers, House or Senate. Bills must be approved by both the House and Senate in order to be sent to the governor and enacted into law.

FEDERAL UPDATE

Vehicle Scrappage

SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program.

After months of contentious debate, Congress passed “cash for clunkers” legislation that will pay consumers to scrap cars and trucks that get 18 miles per gallon or less in exchange for a cash voucher to buy a new car. The one-year program is primarily intended to spur car sales, but lawmakers insisted on including a scrappage component. Consumers will receive either $3,500 or $4,500, depending on the fuel economy improvement of the new vehicle. SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program. This provision serves to safeguard vehicles that may possess unique historic or aesthetic value qualities and are irreplaceable to hobbyists as a source of restoration parts. The law allows all parts to be recycled except the engine. SEMA and other aftermarket associations convinced lawmakers to permit the drivetrain to be recycled if the transmission, driveshaft or rear end are sold as separate parts. The vehicle scrappage program primarily targets SUVs, pickups and minivans, since most passenger cars manufactured during the last 25 years get more than the 18 mpg combined city/highway requirement. SEMA maintained that a better environmental approach would have been to support vehicle repairs, installation of specialty equipment to reduce emissions and increase fuel economy, and engine recycling.

Fuel Economy and CO2 Emissions

The Obama administration will set tough, new fuel-economy standards for model-year (MY) 2012-2016 cars and trucks and will simultaneously reduce carbon dioxide (CO2) emissions through a national standard. The decision ends years of debate between California, the federal government and the automakers over who can regulate CO2 emissions. Fuel economy and CO2 emissions are directly related, since CO2 is released in proportion to the amount of carbon-based fuel that is burned. In 2007, the Bush administration blocked implementation of a California CO2 rule that had been adopted by 13 other states. California will now rewrite its CO2 rule to match the national standard. The National Highway Traffic Safety Administration (NHTSA) will set Corporate Average Fuel Economy (CAFE) standards for MY 2012-2016 vehicles that nearly match CO2 emission standards adopted by California. The EPA will also establish corresponding CO2 emissions standards using its authority under the Clean Air Act. The average CAFE rating will be 35.5 mpg in 2016, based on a combined 39 mpg rating for passenger cars and 30 mpg for light trucks. The EPA will set a CO2 emissions standard of 250 grams per mile for vehicles sold in 2016, roughly equivalent to 35.5 mpg.

Health Care Reform

SEMA is working in an alliance with the National Federation of Independent Business and the Small Business Coalition for Affordable Healthcare to enact legislation that will reduce skyrocketing premiums and protect small companies from costly mandates.

Small-Business Credit Relief

The U.S. Small Business Administration will provide a 100% guarantee on America’s Recovery Capital (ARC) loans, a $255 million program established under the Recovery Act of 2009. The program will provide interest-free, deferred-payment loans of up to $35,000 to established for-profit small businesses that need short-term help making principal and interest payments on existing debt such as credit card obligations, capital leases and notes payable to vendors/suppliers. Repayment of the loan principal begins 12 months after the final disbursement and extends over a five-year period. The program will last until September 2010 or until the $255 million has been spent, whichever comes first. ARC loans are provided by commercial lenders, not the SBA.

OHV Access to Public Lands

A House subcommittee held a hearing on a SEMA-opposed bill called the Northern Rockies Ecosystem Protection Act, which would designate as wilderness 19 million acres of land in Idaho, Montana, Wyoming, Oregon and Washington. By law, roads and motorized vehicles are generally prohibited in wilderness areas. The issue is consequential to SEMA members, since off-roaders would have less riding areas in the region and potentially less demand for off-highway (OHV) equipment. SEMA contends that the legislation is overly broad in scope and does not reflect the views of local communities and stakeholders on how the land should be managed.

SEMA News - August 2009

LEGISLATIVE AND TECHNICAL AFFAIRS

By Steve McDonald

Law and Order

Law and Order is an update of some of the most recent federal and state legislative and regulatory issues that could potentially impact the automotive specialty-equipment industry. These include issues affecting small-business owners and their employees.

California

Emissions Tests

SEMA-opposed legislation to require annual smog check inspections for vehicles 15 years old and older was held in the California Assembly Appropriations Committee and is essentially dead for the year. The bill would also have required that funds generated through the additional inspection fees be deposited into an account that could have been used to scrap older cars. Pre-1976 motor vehicles would have remained exempt under the measure. SEMA launched a statewide lobbying campaign to oppose the bill.

Scrappage

SEMA is opposing a California Air Resources Board (CARB) proposal to spend roughly $30 million annually to augment the state’s existing vehicle scrappage program. The proposal would provide incentives for vehicles not currently eligible under the Consumer Assistance Program by removing the existing requirements that vehicles be subject to and fail smog check to participate. CARB is specifically targeting for scrappage pre-1976 vehicles that are not currently required to undergo smog check inspections. According to CARB, allowing vehicles that are not currently undergoing registration or that have passed their smog check to participate greatly expands the vehicle population that can be retired. Participants would receive $1,000 per vehicle or $1,500 per vehicle if they meet low-income requirements. The proposal would also establish a pilot voucher program in the south coast and San Joaquin Valley air basins that targets the highest-emitting vehicles and requires their replacement with newer, cleaner vehicles. Consumers would retire their vehicles at participating dismantlers, receiving an immediate compensation of $1,000 to $1,500 for vehicle retirement. Consumers could then redeem their vouchers at participating car dealerships toward the purchase of replacement vehicles. CARB is proposing that the voucher compensation be $2,000 or $2,500 per vehicle, depending on income level.

Michigan

Inoperable Vehicles

A version of SEMA-model legislation has been reintroduced in the Michigan State Legislature that would outlaw local zoning ordinances that prohibit the hobby of collecting and restoring motor vehicles. Junked, wrecked or inoperable vehicles (including parts cars) stored on private property could still require screening from public view by fencing, vegetation or other means. The bill has been referred to the Senate Committee on Local, Urban and State Affairs.

Ohio

Street Rods/Customs

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 has been reintroduced in the Ohio State Legislature. 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.

Oregon

Aftermarket Parts

The Oregon House of Representatives approved an alternative to legislation that originally sought to prohibit the sale and distribution of aftermarket motor vehicle parts if alternatives are available that “decrease greenhouse gas emissions from motor vehicles.” Under the alternative, negotiated between SEMA and the Oregon Department of Environmental Quality, the bill would only give the department authority to adopt the present California certification process for aftermarket emissions-related parts, allowing parts manufacturers to meet one uniform standard rather than a patchwork of multiple state standards. The amended legislation will also incorporate a California law that requires state regulators to develop a tire fuel-efficiency program for passenger-car and light-truck replacement tires. As in California, Oregon will include a SEMA-drafted provision to exempt limited-production tires (15,000 or less annually), deep-tread snow tires, limited-use spares, motorcycle tires and tires manufactured for use on off-road vehicles. The bill is now being considered by the Oregon Senate.

Texas

Street Rods/Customs

SEMA-model legislation to create a vehicle registration classification for street rods, custom vehicles and replicas and provide for special license plates for these vehicles did not receive a vote by the Texas House of Representatives before the legislature’s crossover deadline. The crossover deadline requires legislation to be approved by a certain date by at least one of the legislative chambers, House or Senate. Bills must be approved by both the House and Senate in order to be sent to the governor and enacted into law.

FEDERAL UPDATE

Vehicle Scrappage

SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program.

After months of contentious debate, Congress passed “cash for clunkers” legislation that will pay consumers to scrap cars and trucks that get 18 miles per gallon or less in exchange for a cash voucher to buy a new car. The one-year program is primarily intended to spur car sales, but lawmakers insisted on including a scrappage component. Consumers will receive either $3,500 or $4,500, depending on the fuel economy improvement of the new vehicle. SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program. This provision serves to safeguard vehicles that may possess unique historic or aesthetic value qualities and are irreplaceable to hobbyists as a source of restoration parts. The law allows all parts to be recycled except the engine. SEMA and other aftermarket associations convinced lawmakers to permit the drivetrain to be recycled if the transmission, driveshaft or rear end are sold as separate parts. The vehicle scrappage program primarily targets SUVs, pickups and minivans, since most passenger cars manufactured during the last 25 years get more than the 18 mpg combined city/highway requirement. SEMA maintained that a better environmental approach would have been to support vehicle repairs, installation of specialty equipment to reduce emissions and increase fuel economy, and engine recycling.

Fuel Economy and CO2 Emissions

The Obama administration will set tough, new fuel-economy standards for model-year (MY) 2012-2016 cars and trucks and will simultaneously reduce carbon dioxide (CO2) emissions through a national standard. The decision ends years of debate between California, the federal government and the automakers over who can regulate CO2 emissions. Fuel economy and CO2 emissions are directly related, since CO2 is released in proportion to the amount of carbon-based fuel that is burned. In 2007, the Bush administration blocked implementation of a California CO2 rule that had been adopted by 13 other states. California will now rewrite its CO2 rule to match the national standard. The National Highway Traffic Safety Administration (NHTSA) will set Corporate Average Fuel Economy (CAFE) standards for MY 2012-2016 vehicles that nearly match CO2 emission standards adopted by California. The EPA will also establish corresponding CO2 emissions standards using its authority under the Clean Air Act. The average CAFE rating will be 35.5 mpg in 2016, based on a combined 39 mpg rating for passenger cars and 30 mpg for light trucks. The EPA will set a CO2 emissions standard of 250 grams per mile for vehicles sold in 2016, roughly equivalent to 35.5 mpg.

Health Care Reform

SEMA is working in an alliance with the National Federation of Independent Business and the Small Business Coalition for Affordable Healthcare to enact legislation that will reduce skyrocketing premiums and protect small companies from costly mandates.

Small-Business Credit Relief

The U.S. Small Business Administration will provide a 100% guarantee on America’s Recovery Capital (ARC) loans, a $255 million program established under the Recovery Act of 2009. The program will provide interest-free, deferred-payment loans of up to $35,000 to established for-profit small businesses that need short-term help making principal and interest payments on existing debt such as credit card obligations, capital leases and notes payable to vendors/suppliers. Repayment of the loan principal begins 12 months after the final disbursement and extends over a five-year period. The program will last until September 2010 or until the $255 million has been spent, whichever comes first. ARC loans are provided by commercial lenders, not the SBA.

OHV Access to Public Lands

A House subcommittee held a hearing on a SEMA-opposed bill called the Northern Rockies Ecosystem Protection Act, which would designate as wilderness 19 million acres of land in Idaho, Montana, Wyoming, Oregon and Washington. By law, roads and motorized vehicles are generally prohibited in wilderness areas. The issue is consequential to SEMA members, since off-roaders would have less riding areas in the region and potentially less demand for off-highway (OHV) equipment. SEMA contends that the legislation is overly broad in scope and does not reflect the views of local communities and stakeholders on how the land should be managed.

SEMA News - August 2009

LEGISLATIVE AND TECHNICAL AFFAIRS

By Steve McDonald

Law and Order

Law and Order is an update of some of the most recent federal and state legislative and regulatory issues that could potentially impact the automotive specialty-equipment industry. These include issues affecting small-business owners and their employees.

California

Emissions Tests

SEMA-opposed legislation to require annual smog check inspections for vehicles 15 years old and older was held in the California Assembly Appropriations Committee and is essentially dead for the year. The bill would also have required that funds generated through the additional inspection fees be deposited into an account that could have been used to scrap older cars. Pre-1976 motor vehicles would have remained exempt under the measure. SEMA launched a statewide lobbying campaign to oppose the bill.

Scrappage

SEMA is opposing a California Air Resources Board (CARB) proposal to spend roughly $30 million annually to augment the state’s existing vehicle scrappage program. The proposal would provide incentives for vehicles not currently eligible under the Consumer Assistance Program by removing the existing requirements that vehicles be subject to and fail smog check to participate. CARB is specifically targeting for scrappage pre-1976 vehicles that are not currently required to undergo smog check inspections. According to CARB, allowing vehicles that are not currently undergoing registration or that have passed their smog check to participate greatly expands the vehicle population that can be retired. Participants would receive $1,000 per vehicle or $1,500 per vehicle if they meet low-income requirements. The proposal would also establish a pilot voucher program in the south coast and San Joaquin Valley air basins that targets the highest-emitting vehicles and requires their replacement with newer, cleaner vehicles. Consumers would retire their vehicles at participating dismantlers, receiving an immediate compensation of $1,000 to $1,500 for vehicle retirement. Consumers could then redeem their vouchers at participating car dealerships toward the purchase of replacement vehicles. CARB is proposing that the voucher compensation be $2,000 or $2,500 per vehicle, depending on income level.

Michigan

Inoperable Vehicles

A version of SEMA-model legislation has been reintroduced in the Michigan State Legislature that would outlaw local zoning ordinances that prohibit the hobby of collecting and restoring motor vehicles. Junked, wrecked or inoperable vehicles (including parts cars) stored on private property could still require screening from public view by fencing, vegetation or other means. The bill has been referred to the Senate Committee on Local, Urban and State Affairs.

Ohio

Street Rods/Customs

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 has been reintroduced in the Ohio State Legislature. 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.

Oregon

Aftermarket Parts

The Oregon House of Representatives approved an alternative to legislation that originally sought to prohibit the sale and distribution of aftermarket motor vehicle parts if alternatives are available that “decrease greenhouse gas emissions from motor vehicles.” Under the alternative, negotiated between SEMA and the Oregon Department of Environmental Quality, the bill would only give the department authority to adopt the present California certification process for aftermarket emissions-related parts, allowing parts manufacturers to meet one uniform standard rather than a patchwork of multiple state standards. The amended legislation will also incorporate a California law that requires state regulators to develop a tire fuel-efficiency program for passenger-car and light-truck replacement tires. As in California, Oregon will include a SEMA-drafted provision to exempt limited-production tires (15,000 or less annually), deep-tread snow tires, limited-use spares, motorcycle tires and tires manufactured for use on off-road vehicles. The bill is now being considered by the Oregon Senate.

Texas

Street Rods/Customs

SEMA-model legislation to create a vehicle registration classification for street rods, custom vehicles and replicas and provide for special license plates for these vehicles did not receive a vote by the Texas House of Representatives before the legislature’s crossover deadline. The crossover deadline requires legislation to be approved by a certain date by at least one of the legislative chambers, House or Senate. Bills must be approved by both the House and Senate in order to be sent to the governor and enacted into law.

FEDERAL UPDATE

Vehicle Scrappage

SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program.

After months of contentious debate, Congress passed “cash for clunkers” legislation that will pay consumers to scrap cars and trucks that get 18 miles per gallon or less in exchange for a cash voucher to buy a new car. The one-year program is primarily intended to spur car sales, but lawmakers insisted on including a scrappage component. Consumers will receive either $3,500 or $4,500, depending on the fuel economy improvement of the new vehicle. SEMA convinced lawmakers to include a provision that excludes vehicles of model-year 1983 and earlier from the scope of the scrappage program. This provision serves to safeguard vehicles that may possess unique historic or aesthetic value qualities and are irreplaceable to hobbyists as a source of restoration parts. The law allows all parts to be recycled except the engine. SEMA and other aftermarket associations convinced lawmakers to permit the drivetrain to be recycled if the transmission, driveshaft or rear end are sold as separate parts. The vehicle scrappage program primarily targets SUVs, pickups and minivans, since most passenger cars manufactured during the last 25 years get more than the 18 mpg combined city/highway requirement. SEMA maintained that a better environmental approach would have been to support vehicle repairs, installation of specialty equipment to reduce emissions and increase fuel economy, and engine recycling.

Fuel Economy and CO2 Emissions

The Obama administration will set tough, new fuel-economy standards for model-year (MY) 2012-2016 cars and trucks and will simultaneously reduce carbon dioxide (CO2) emissions through a national standard. The decision ends years of debate between California, the federal government and the automakers over who can regulate CO2 emissions. Fuel economy and CO2 emissions are directly related, since CO2 is released in proportion to the amount of carbon-based fuel that is burned. In 2007, the Bush administration blocked implementation of a California CO2 rule that had been adopted by 13 other states. California will now rewrite its CO2 rule to match the national standard. The National Highway Traffic Safety Administration (NHTSA) will set Corporate Average Fuel Economy (CAFE) standards for MY 2012-2016 vehicles that nearly match CO2 emission standards adopted by California. The EPA will also establish corresponding CO2 emissions standards using its authority under the Clean Air Act. The average CAFE rating will be 35.5 mpg in 2016, based on a combined 39 mpg rating for passenger cars and 30 mpg for light trucks. The EPA will set a CO2 emissions standard of 250 grams per mile for vehicles sold in 2016, roughly equivalent to 35.5 mpg.

Health Care Reform

SEMA is working in an alliance with the National Federation of Independent Business and the Small Business Coalition for Affordable Healthcare to enact legislation that will reduce skyrocketing premiums and protect small companies from costly mandates.

Small-Business Credit Relief

The U.S. Small Business Administration will provide a 100% guarantee on America’s Recovery Capital (ARC) loans, a $255 million program established under the Recovery Act of 2009. The program will provide interest-free, deferred-payment loans of up to $35,000 to established for-profit small businesses that need short-term help making principal and interest payments on existing debt such as credit card obligations, capital leases and notes payable to vendors/suppliers. Repayment of the loan principal begins 12 months after the final disbursement and extends over a five-year period. The program will last until September 2010 or until the $255 million has been spent, whichever comes first. ARC loans are provided by commercial lenders, not the SBA.

OHV Access to Public Lands

A House subcommittee held a hearing on a SEMA-opposed bill called the Northern Rockies Ecosystem Protection Act, which would designate as wilderness 19 million acres of land in Idaho, Montana, Wyoming, Oregon and Washington. By law, roads and motorized vehicles are generally prohibited in wilderness areas. The issue is consequential to SEMA members, since off-roaders would have less riding areas in the region and potentially less demand for off-highway (OHV) equipment. SEMA contends that the legislation is overly broad in scope and does not reflect the views of local communities and stakeholders on how the land should be managed.

SEMA News - August 2009

By Stuart Gosswein

Small-Business Issues Vital In Legislative Debate

Lawmakers are seeking to enact legislation in 2009 that would fundamentally reform how Americans gain access to the nation’s health care system. A number of Congressional committees are now tackling the tough job of writing the legislation this summer, with a goal of completing action in both the House and Senate this fall. SEMA is taking this opportunity to identify some of the major issues being debated.

Overview

Two national problems have stoked the political pressure for reform. First, about 46 million Americans have no health insurance—either because their employer does not offer coverage, they are unemployed and cannot afford an individual plan, or they simply chose not to be insured. An individual who is uninsured may actually impose a higher cost on the health care system than someone who has coverage, since the uninsured usually forego preventive medicine and may ultimately end up in the emergency room, where treatment costs are at a premium. Second, health care premiums have skyrocketed about 113% for small firms over the past 10 years. An estimated 27 million small-business owners, employees and dependents are now uninsured. Additionally, small businesses pay an average of 18% more in health insurance premiums for the same benefits provided to big businesses.

SEMA Survey

Earlier this year, a SEMA-member survey provided a clear message that the nation’s health care system is broken. While recognizing the need for reform, the survey results also cautioned that any solutions must be affordable and not impose costly employer mandates. The results were reported in SEMA News May 2009.

Can Reforms Be Enacted?

Unlike in years past, the major players in the health care debate are willing to talk—politicians, health care providers, insurance companies, drug companies, big and small businesses and individuals. Reasons vary but include the realization that the current system is unsustainable, the number of uninsured is increasing, and there are profits to be made by providing care to the uninsured. In fact, the players are at the table to protect their vested individual interests. The insurance companies will benefit if the 46 million uninsured become customers. The insurance companies also want to make sure that there is an even playing field. For example, if the government offers a competing insurance plan under “play or pay,” that program could siphon off some of the better customers and leave some insurance companies with higher-risk participants and increased premium rates.

How Will Health Care Reform Contain Rising Costs?

Cost containment focuses on four main areas: providers, insurance companies, preventive medicine and market reforms.

Health Care Providers: Hospitals, doctors and other health care providers will be pushed to work within a standardized electronic paperwork system. “Health IT” is the catchphrase for reducing the costs and inefficiencies of the current paper-based system. However, an electronic system will need to have security and privacy safeguards, and it will need to be phased in to accommodate computer and software costs. There will also be efforts to better manage chronic disease, which accounts for 75% of overall health care spending. Reducing the incidence of misdiagnosis, unnecessary tests and treatment through more rigorous medical oversight and quality control can also take costs out of the system.

Health Insurance Companies: Private health care insurance companies are currently losing customers due to spiraling premiums. Lawmakers want to bring 46 million Americans into the system by leveling the playing field. Mechanisms may include preventing insurers from denying coverage to individuals or charging excessive premiums based on pre-existing conditions, health status, genetic information or similar criteria. Lawmakers want to limit excessive variations in premium prices for the same policy and have premiums that are based on community ratings and actuarial tables. Limits could also be placed on a company’s administrative and marketing costs and profits when compared to the percentage of funds spent on medical care.

Disease Prevention: It goes without saying that large amounts of money can be saved if people embrace healthier lifestyles, so an emphasis will be placed on promoting preventive medicine. Fewer resources may be needed if there is access to regular health checkups rather than emergency-room visits. This approach will include programs to promote smoking secession, proper diet, exercise and to provide low-cost routine health screening, including conducting such programs in the workplace.

Market Reforms: Correcting defects and biases in the marketplace for health insurance is another key aspect of reform. For years, SEMA and other groups have sought passage of legislation to create Small Business Health Plans that would enable small businesses to band together, form a larger risk pool and purchase insurance across state lines. Under the current system, large companies and trade unions have access to national plans, but most small businesses are forced to buy from insurance providers in their home states, turning them into captive customers who receive less coverage for higher prices. Forming national or regional health care insurance “exchanges” is gaining acceptance as a means to make it easier for customers to understand the types of coverage that are available, compare prices and build larger, more stable risk pools. Allowing policies to be portable as Americans move or change jobs is also crucial.

Who Pays for Reform?

Employer “Pay or Play”: The nation’s current employer-based system will be retained. Americans either will have access to health insurance through their employers or be required to purchase their own policies. Both options have ramifications for the employer. Lawmakers will likely pursue a “pay or play” approach whereby companies offer a qualifying amount of health insurance (paying all or a portion of the worker’s premiums) or pay a payroll tax for a federal health insurance fund similar to Medicare. The tax could be staggered based on a company’s size and revenue, and small employers could be exempted. SEMA’s health care survey provides guidance on this topic. SEMA members support the current voluntary approach to providing coverage but overwhelmingly oppose mandates such as pay or play. They also support tax credits and other mechanisms that would help enable employers to provide coverage.

Taxing Individuals: Under current law, workers are not taxed on the value of health insurance provided by the employer. Lawmakers may subject all or some of that money to income tax as a means to fund the federal health program. It would also have the benefit of making individuals more aware of the insurance costs borne by the employer and providing an incentive to become more engaged in health care decisions. Lawmakers are also looking at increasing taxes on popular products often associated with national health problems. Frequent targets are excise taxes for distilled spirits, beer, some types of wine and for sugar-sweetened beverages such as soft drinks. Another proposal is to add a disability-insurance tax on all workers’ paychecks. Similar to long-term care insurance, the program would address critical flaws in the current system by creating a large risk pool and guaranteeing disability coverage for all Americans.

Individual Mandate: Lawmakers will likely require individuals to buy a qualifying level of health insurance in the same fashion that motorists must have auto insurance. Compliance may be phased in over time. Enforcement would likely occur at points of contact between individuals and the government (e.g. taxes, applications for licenses, etc.) based on proof of enrollment in a personal plan, an employer-based plan or through the proposed federally run plan. In theory, an individual mandate should reduce insurance premiums by bringing into the system more young, healthy people who currently are not covered by insurance. An individual mandate would likely require subsidies for lower-income individuals.

Public Insurance: Creation of a federal health insurance plan that would compete for subscribers with private health insurance plans has been one of the most controversial aspects of the health care reform debate. Many fear that it would potentially undermine the extensive system of private insurance now in place and head America toward a single-payer system—the single payer being the federal government. More public funds may be used to pay for services provided in private hospitals and doctors’ offices as a result of reform. However, very few reformers in Congress are seeking full “socialized medicine” or a government takeover of hospitals and medical practices.

Reform Challenges: Assuming that reforms are enacted into law, success will require hard work. For example, Massachusetts embarked on the same course in 2006 and achieved initial success. However, reducing barriers to care and improving affordability have recently proven problematic, as one in five adults have reported difficulties in finding a doctor who will take a new patient or who will accept the provider reimbursement rate for payment. People who can’t find a participating physician—even when they now have the ability to pay—end up back in the local emergency room. The nation will face a similar challenge as it attempts to incorporate 46 million Americans into the current system without creating supply-and-demand rationing and as it converts to a preventive care system.

Enacting legislation to help SEMA-member businesses gain access to affordable coverage has been a top priority for a number of years. Toward that goal, SEMA has worked on Capitol Hill through the Small Business Coalition for Affordable Healthcare and with the National Federation of Independent Businesses. SEMA will vigorously support those measures in Congress aimed at containing the overall cost of health care to SEMA members.

SEMA News - August 2009

By Stuart Gosswein

Small-Business Issues Vital In Legislative Debate

Lawmakers are seeking to enact legislation in 2009 that would fundamentally reform how Americans gain access to the nation’s health care system. A number of Congressional committees are now tackling the tough job of writing the legislation this summer, with a goal of completing action in both the House and Senate this fall. SEMA is taking this opportunity to identify some of the major issues being debated.

Overview

Two national problems have stoked the political pressure for reform. First, about 46 million Americans have no health insurance—either because their employer does not offer coverage, they are unemployed and cannot afford an individual plan, or they simply chose not to be insured. An individual who is uninsured may actually impose a higher cost on the health care system than someone who has coverage, since the uninsured usually forego preventive medicine and may ultimately end up in the emergency room, where treatment costs are at a premium. Second, health care premiums have skyrocketed about 113% for small firms over the past 10 years. An estimated 27 million small-business owners, employees and dependents are now uninsured. Additionally, small businesses pay an average of 18% more in health insurance premiums for the same benefits provided to big businesses.

SEMA Survey

Earlier this year, a SEMA-member survey provided a clear message that the nation’s health care system is broken. While recognizing the need for reform, the survey results also cautioned that any solutions must be affordable and not impose costly employer mandates. The results were reported in SEMA News May 2009.

Can Reforms Be Enacted?

Unlike in years past, the major players in the health care debate are willing to talk—politicians, health care providers, insurance companies, drug companies, big and small businesses and individuals. Reasons vary but include the realization that the current system is unsustainable, the number of uninsured is increasing, and there are profits to be made by providing care to the uninsured. In fact, the players are at the table to protect their vested individual interests. The insurance companies will benefit if the 46 million uninsured become customers. The insurance companies also want to make sure that there is an even playing field. For example, if the government offers a competing insurance plan under “play or pay,” that program could siphon off some of the better customers and leave some insurance companies with higher-risk participants and increased premium rates.

How Will Health Care Reform Contain Rising Costs?

Cost containment focuses on four main areas: providers, insurance companies, preventive medicine and market reforms.

Health Care Providers: Hospitals, doctors and other health care providers will be pushed to work within a standardized electronic paperwork system. “Health IT” is the catchphrase for reducing the costs and inefficiencies of the current paper-based system. However, an electronic system will need to have security and privacy safeguards, and it will need to be phased in to accommodate computer and software costs. There will also be efforts to better manage chronic disease, which accounts for 75% of overall health care spending. Reducing the incidence of misdiagnosis, unnecessary tests and treatment through more rigorous medical oversight and quality control can also take costs out of the system.

Health Insurance Companies: Private health care insurance companies are currently losing customers due to spiraling premiums. Lawmakers want to bring 46 million Americans into the system by leveling the playing field. Mechanisms may include preventing insurers from denying coverage to individuals or charging excessive premiums based on pre-existing conditions, health status, genetic information or similar criteria. Lawmakers want to limit excessive variations in premium prices for the same policy and have premiums that are based on community ratings and actuarial tables. Limits could also be placed on a company’s administrative and marketing costs and profits when compared to the percentage of funds spent on medical care.

Disease Prevention: It goes without saying that large amounts of money can be saved if people embrace healthier lifestyles, so an emphasis will be placed on promoting preventive medicine. Fewer resources may be needed if there is access to regular health checkups rather than emergency-room visits. This approach will include programs to promote smoking secession, proper diet, exercise and to provide low-cost routine health screening, including conducting such programs in the workplace.

Market Reforms: Correcting defects and biases in the marketplace for health insurance is another key aspect of reform. For years, SEMA and other groups have sought passage of legislation to create Small Business Health Plans that would enable small businesses to band together, form a larger risk pool and purchase insurance across state lines. Under the current system, large companies and trade unions have access to national plans, but most small businesses are forced to buy from insurance providers in their home states, turning them into captive customers who receive less coverage for higher prices. Forming national or regional health care insurance “exchanges” is gaining acceptance as a means to make it easier for customers to understand the types of coverage that are available, compare prices and build larger, more stable risk pools. Allowing policies to be portable as Americans move or change jobs is also crucial.

Who Pays for Reform?

Employer “Pay or Play”: The nation’s current employer-based system will be retained. Americans either will have access to health insurance through their employers or be required to purchase their own policies. Both options have ramifications for the employer. Lawmakers will likely pursue a “pay or play” approach whereby companies offer a qualifying amount of health insurance (paying all or a portion of the worker’s premiums) or pay a payroll tax for a federal health insurance fund similar to Medicare. The tax could be staggered based on a company’s size and revenue, and small employers could be exempted. SEMA’s health care survey provides guidance on this topic. SEMA members support the current voluntary approach to providing coverage but overwhelmingly oppose mandates such as pay or play. They also support tax credits and other mechanisms that would help enable employers to provide coverage.

Taxing Individuals: Under current law, workers are not taxed on the value of health insurance provided by the employer. Lawmakers may subject all or some of that money to income tax as a means to fund the federal health program. It would also have the benefit of making individuals more aware of the insurance costs borne by the employer and providing an incentive to become more engaged in health care decisions. Lawmakers are also looking at increasing taxes on popular products often associated with national health problems. Frequent targets are excise taxes for distilled spirits, beer, some types of wine and for sugar-sweetened beverages such as soft drinks. Another proposal is to add a disability-insurance tax on all workers’ paychecks. Similar to long-term care insurance, the program would address critical flaws in the current system by creating a large risk pool and guaranteeing disability coverage for all Americans.

Individual Mandate: Lawmakers will likely require individuals to buy a qualifying level of health insurance in the same fashion that motorists must have auto insurance. Compliance may be phased in over time. Enforcement would likely occur at points of contact between individuals and the government (e.g. taxes, applications for licenses, etc.) based on proof of enrollment in a personal plan, an employer-based plan or through the proposed federally run plan. In theory, an individual mandate should reduce insurance premiums by bringing into the system more young, healthy people who currently are not covered by insurance. An individual mandate would likely require subsidies for lower-income individuals.

Public Insurance: Creation of a federal health insurance plan that would compete for subscribers with private health insurance plans has been one of the most controversial aspects of the health care reform debate. Many fear that it would potentially undermine the extensive system of private insurance now in place and head America toward a single-payer system—the single payer being the federal government. More public funds may be used to pay for services provided in private hospitals and doctors’ offices as a result of reform. However, very few reformers in Congress are seeking full “socialized medicine” or a government takeover of hospitals and medical practices.

Reform Challenges: Assuming that reforms are enacted into law, success will require hard work. For example, Massachusetts embarked on the same course in 2006 and achieved initial success. However, reducing barriers to care and improving affordability have recently proven problematic, as one in five adults have reported difficulties in finding a doctor who will take a new patient or who will accept the provider reimbursement rate for payment. People who can’t find a participating physician—even when they now have the ability to pay—end up back in the local emergency room. The nation will face a similar challenge as it attempts to incorporate 46 million Americans into the current system without creating supply-and-demand rationing and as it converts to a preventive care system.

Enacting legislation to help SEMA-member businesses gain access to affordable coverage has been a top priority for a number of years. Toward that goal, SEMA has worked on Capitol Hill through the Small Business Coalition for Affordable Healthcare and with the National Federation of Independent Businesses. SEMA will vigorously support those measures in Congress aimed at containing the overall cost of health care to SEMA members.

SEMA News - August 2009

By Stuart Gosswein

Small-Business Issues Vital In Legislative Debate

Lawmakers are seeking to enact legislation in 2009 that would fundamentally reform how Americans gain access to the nation’s health care system. A number of Congressional committees are now tackling the tough job of writing the legislation this summer, with a goal of completing action in both the House and Senate this fall. SEMA is taking this opportunity to identify some of the major issues being debated.

Overview

Two national problems have stoked the political pressure for reform. First, about 46 million Americans have no health insurance—either because their employer does not offer coverage, they are unemployed and cannot afford an individual plan, or they simply chose not to be insured. An individual who is uninsured may actually impose a higher cost on the health care system than someone who has coverage, since the uninsured usually forego preventive medicine and may ultimately end up in the emergency room, where treatment costs are at a premium. Second, health care premiums have skyrocketed about 113% for small firms over the past 10 years. An estimated 27 million small-business owners, employees and dependents are now uninsured. Additionally, small businesses pay an average of 18% more in health insurance premiums for the same benefits provided to big businesses.

SEMA Survey

Earlier this year, a SEMA-member survey provided a clear message that the nation’s health care system is broken. While recognizing the need for reform, the survey results also cautioned that any solutions must be affordable and not impose costly employer mandates. The results were reported in SEMA News May 2009.

Can Reforms Be Enacted?

Unlike in years past, the major players in the health care debate are willing to talk—politicians, health care providers, insurance companies, drug companies, big and small businesses and individuals. Reasons vary but include the realization that the current system is unsustainable, the number of uninsured is increasing, and there are profits to be made by providing care to the uninsured. In fact, the players are at the table to protect their vested individual interests. The insurance companies will benefit if the 46 million uninsured become customers. The insurance companies also want to make sure that there is an even playing field. For example, if the government offers a competing insurance plan under “play or pay,” that program could siphon off some of the better customers and leave some insurance companies with higher-risk participants and increased premium rates.

How Will Health Care Reform Contain Rising Costs?

Cost containment focuses on four main areas: providers, insurance companies, preventive medicine and market reforms.

Health Care Providers: Hospitals, doctors and other health care providers will be pushed to work within a standardized electronic paperwork system. “Health IT” is the catchphrase for reducing the costs and inefficiencies of the current paper-based system. However, an electronic system will need to have security and privacy safeguards, and it will need to be phased in to accommodate computer and software costs. There will also be efforts to better manage chronic disease, which accounts for 75% of overall health care spending. Reducing the incidence of misdiagnosis, unnecessary tests and treatment through more rigorous medical oversight and quality control can also take costs out of the system.

Health Insurance Companies: Private health care insurance companies are currently losing customers due to spiraling premiums. Lawmakers want to bring 46 million Americans into the system by leveling the playing field. Mechanisms may include preventing insurers from denying coverage to individuals or charging excessive premiums based on pre-existing conditions, health status, genetic information or similar criteria. Lawmakers want to limit excessive variations in premium prices for the same policy and have premiums that are based on community ratings and actuarial tables. Limits could also be placed on a company’s administrative and marketing costs and profits when compared to the percentage of funds spent on medical care.

Disease Prevention: It goes without saying that large amounts of money can be saved if people embrace healthier lifestyles, so an emphasis will be placed on promoting preventive medicine. Fewer resources may be needed if there is access to regular health checkups rather than emergency-room visits. This approach will include programs to promote smoking secession, proper diet, exercise and to provide low-cost routine health screening, including conducting such programs in the workplace.

Market Reforms: Correcting defects and biases in the marketplace for health insurance is another key aspect of reform. For years, SEMA and other groups have sought passage of legislation to create Small Business Health Plans that would enable small businesses to band together, form a larger risk pool and purchase insurance across state lines. Under the current system, large companies and trade unions have access to national plans, but most small businesses are forced to buy from insurance providers in their home states, turning them into captive customers who receive less coverage for higher prices. Forming national or regional health care insurance “exchanges” is gaining acceptance as a means to make it easier for customers to understand the types of coverage that are available, compare prices and build larger, more stable risk pools. Allowing policies to be portable as Americans move or change jobs is also crucial.

Who Pays for Reform?

Employer “Pay or Play”: The nation’s current employer-based system will be retained. Americans either will have access to health insurance through their employers or be required to purchase their own policies. Both options have ramifications for the employer. Lawmakers will likely pursue a “pay or play” approach whereby companies offer a qualifying amount of health insurance (paying all or a portion of the worker’s premiums) or pay a payroll tax for a federal health insurance fund similar to Medicare. The tax could be staggered based on a company’s size and revenue, and small employers could be exempted. SEMA’s health care survey provides guidance on this topic. SEMA members support the current voluntary approach to providing coverage but overwhelmingly oppose mandates such as pay or play. They also support tax credits and other mechanisms that would help enable employers to provide coverage.

Taxing Individuals: Under current law, workers are not taxed on the value of health insurance provided by the employer. Lawmakers may subject all or some of that money to income tax as a means to fund the federal health program. It would also have the benefit of making individuals more aware of the insurance costs borne by the employer and providing an incentive to become more engaged in health care decisions. Lawmakers are also looking at increasing taxes on popular products often associated with national health problems. Frequent targets are excise taxes for distilled spirits, beer, some types of wine and for sugar-sweetened beverages such as soft drinks. Another proposal is to add a disability-insurance tax on all workers’ paychecks. Similar to long-term care insurance, the program would address critical flaws in the current system by creating a large risk pool and guaranteeing disability coverage for all Americans.

Individual Mandate: Lawmakers will likely require individuals to buy a qualifying level of health insurance in the same fashion that motorists must have auto insurance. Compliance may be phased in over time. Enforcement would likely occur at points of contact between individuals and the government (e.g. taxes, applications for licenses, etc.) based on proof of enrollment in a personal plan, an employer-based plan or through the proposed federally run plan. In theory, an individual mandate should reduce insurance premiums by bringing into the system more young, healthy people who currently are not covered by insurance. An individual mandate would likely require subsidies for lower-income individuals.

Public Insurance: Creation of a federal health insurance plan that would compete for subscribers with private health insurance plans has been one of the most controversial aspects of the health care reform debate. Many fear that it would potentially undermine the extensive system of private insurance now in place and head America toward a single-payer system—the single payer being the federal government. More public funds may be used to pay for services provided in private hospitals and doctors’ offices as a result of reform. However, very few reformers in Congress are seeking full “socialized medicine” or a government takeover of hospitals and medical practices.

Reform Challenges: Assuming that reforms are enacted into law, success will require hard work. For example, Massachusetts embarked on the same course in 2006 and achieved initial success. However, reducing barriers to care and improving affordability have recently proven problematic, as one in five adults have reported difficulties in finding a doctor who will take a new patient or who will accept the provider reimbursement rate for payment. People who can’t find a participating physician—even when they now have the ability to pay—end up back in the local emergency room. The nation will face a similar challenge as it attempts to incorporate 46 million Americans into the current system without creating supply-and-demand rationing and as it converts to a preventive care system.

Enacting legislation to help SEMA-member businesses gain access to affordable coverage has been a top priority for a number of years. Toward that goal, SEMA has worked on Capitol Hill through the Small Business Coalition for Affordable Healthcare and with the National Federation of Independent Businesses. SEMA will vigorously support those measures in Congress aimed at containing the overall cost of health care to SEMA members.

SEMA News - August 2009

Agri-Cover (ACI) Autolock Electric Roll Tarp Agri-Cover announces the release of the all-new Autolock electric tarp system. AutoLock’s exclusive dual-drive system consists of a high-strength Kevlar driveline and 3-inch aluminum roll tube that work together to provide a powerful front and rear drive system. Agri-Cover (ACI) 800/233-4655
Applied Chemical Specialties HyperKühl SuperCoolant Applied Chemical Specialties introduces HyperKühl SuperCoolant, a unique new coolant additive that it claims can reduce engine-operating temperatures by up to 20 degrees Fahrenheit. It also provides 100% corrosion and electrolysis protection for all metals in a cooling system—particularly high-dollar, sensitive aluminum radiators. SuperCoolant was awarded a 2008 Global Media Award for being one of this year’s best new products. Applied Chemical Specialties 847/477-9262
Air Flow Research (AFR) Small-Block Ford Head AFR is proud to introduce a new version of its small-block Ford head with 72cc combustion chambers for large-cubic-inch or forced-induction applications. In addition, all AFR small-block Ford heads now come with lightweight 8mm bead-lock valves and lightweight Pacaloy valve springs. Air Flow Research (AFR) 877/235-4466
Ansani Designs Toyota Tundra Fiberglass Light Pod Bumper Insert Ansani Designs now offers a fiberglass front bumper insert for 2007-current Toyota Tundras. This insert is a direct replacement for the factory urethane section. The Ansani Designs piece includes three molded light pods for 8-inch KC Rally 800 auxiliary lights. Ansani Designs 480/323-0504
TruXedo Products Now Available for the ’04–’06 Jeep Wrangler Rubicon TruXedo is pleased to announce the shipment of the Lo Pro QT and Lo Pro QT Harley-Davidson Edition tonneau covers for the ’04–’06 Jeep Wrangler Rubicon. The TruXedo custom application is specially designed for Jeeps with a half-cab conversion. TruXedo 877/878-9336
BedSlide (A Brand of IFW) BedSlide According to BedSlide, its product is the only accessory that turns the largest cargo space—the back of the pickup truck—into easily accessed and organized compartments. With just the turn of the latch and a pull on the handle, the BedSlide rolls all of the cargo out. BedSlide (A Brand of IFW) 888/807-0099
Slime Slime Safety Spair A flat tire, dead battery or minor medical emergency is no longer a problem with the Safety Spair, a 36-piece roadside essentials kit that includes jumper cables, a first-aid kit, triangle reflectors, tire-pressure gauge and Slime tire sealant packed in a cordura nylon case. A one-touch button on the Safety Spair injects sealant into the tire, seals the puncture and reinflates the tire in as little as seven minutes, according to the company Slime 888/45-SLIME
Cernium Corporation Mobile Video Intelligence Surveillance System Cernium Corporation introduces what it claims is the world’s first mobile video intelligence surveillance system that notifies users of events via their mobile device, e-mail or personal Archerfish portal. Access live video from Archerfish SmartPortal and view from any web-enabled PC, PDA or mobile device. Cernium Corporation 703/483-3367
Daystar Dash Panels The best-selling Daystar dash and switch panels for the Jeep Wrangler TJ, JK and Hummer H3 are now available in camouflage. They feature a main tray that is suitable for mounting a GPS unit, or they can be used as convenient storage for cell phones, sunglasses, MP3 players and other small items. Daystar 800/595-7659
CelCat International LTD Maxx Fuel According to the manufacturer, Maxx Fuel’s simple design allows for easy installation on most engines. The device is mounted near the engine and connected to the engine’s air intake with a rubber hose. Once installed, the Maxx Fuel system delivers small amounts of cerium oxide via the air induction system of the engine into the combustion chamber. The cerium oxide acts as a catalyst inside the combustion chamber, enhancing burn efficiency. The net result is a cleaner, better-performing engine. CelCat International LTD 618/531-8054
Hunter Engineering Company TPMSpecs Database According to the company, Hunter’s TPMSpecs database takes the frustration out of servicing TPMS wheels by organizing and condensing more than 110 unique OE TPMS procedures into an easy-to-understand, tech-friendly format. TPMSpecs provides the sensor type, tools needed, service procedures and any special instructions based on the specific vehicle being serviced. Hunter Engineering Company 800/448-6848
Kicker Performance Audio Upgrades for Mustangs Kicker Performance Audio system upgrades are now available for purchase for most Ford Mustang models exclusively through Shelby Performance Parts dealers nationwide. According to the company, these true plug-and-play upgrades are significantly louder and clearer than stock Mustang systems, dramatically improving low-, mid- and high-frequency response. The subwoofer upgrade is only half the size of a Mustang’s stock sub, reducing subwoofer weight by 60% while remarkably improving audio output. The sub enclosure also vastly increases cargo space by fitting snugly against the inner trunk wall. Kicker 800/256-5425
Superchips Market Release of ’07–’09 GM 2.0L Turbo Coverage According to Superchips, the all-new GM Gas Flashpaq (PN 2865) is the first programmer available for the 2.0L turbo, delivering Superchips tuning for improved drivability and performance. Coverage includes the ’08–’09 Cobalt SS, ’07–’09 Solstice GXP, ’07–’09 Sky Redline and ’08–’09 HHR SS. Superchips 888/227-2447
Toyo Tires M647 Premium Drive Tire Toyo Tires introduces the M647 premium drive tire, designed for local and long-haul highway applications. The newest product in an extensive line of tires for commercial trucks. The M647 has a deep, 30/32-inch tread that provides improved wear and long service life. Toyo Tires West Coast: 800/442-8696 East Coast: 888/444-8696
OK Spark USA Sparkplug Sensor OK Spark USA proudly introduces its revolutionary OK Spark brand sparkplug sensor. This tool detects both voltage and spark without having to remove the sparkplug. Winner of three SEMA Global Media awards, this sturdy handheld sparkplug and maintenance diagnostic tool “sees” inside the cylinder head to look for an electrical arc, verifying that the plug is igniting while under compression. OK Spark USA 866/OK-SPARK
Rostra Precision Controls Custom-Designed Hands-Free Car Kits Featuring Bluetooth The ConVerse car kit allows calls to route through the vehicle’s existing stereo system, providing the driver with the highest quality sound. Full duplex digital signal processing allows both parties to converse simultaneously, and the system will easily pair up to 10 phones. Rostra Precision Controls Inc. 800/782-3379

SEMA News - August 2009

Agri-Cover (ACI) Autolock Electric Roll Tarp Agri-Cover announces the release of the all-new Autolock electric tarp system. AutoLock’s exclusive dual-drive system consists of a high-strength Kevlar driveline and 3-inch aluminum roll tube that work together to provide a powerful front and rear drive system. Agri-Cover (ACI) 800/233-4655
Applied Chemical Specialties HyperKühl SuperCoolant Applied Chemical Specialties introduces HyperKühl SuperCoolant, a unique new coolant additive that it claims can reduce engine-operating temperatures by up to 20 degrees Fahrenheit. It also provides 100% corrosion and electrolysis protection for all metals in a cooling system—particularly high-dollar, sensitive aluminum radiators. SuperCoolant was awarded a 2008 Global Media Award for being one of this year’s best new products. Applied Chemical Specialties 847/477-9262
Air Flow Research (AFR) Small-Block Ford Head AFR is proud to introduce a new version of its small-block Ford head with 72cc combustion chambers for large-cubic-inch or forced-induction applications. In addition, all AFR small-block Ford heads now come with lightweight 8mm bead-lock valves and lightweight Pacaloy valve springs. Air Flow Research (AFR) 877/235-4466
Ansani Designs Toyota Tundra Fiberglass Light Pod Bumper Insert Ansani Designs now offers a fiberglass front bumper insert for 2007-current Toyota Tundras. This insert is a direct replacement for the factory urethane section. The Ansani Designs piece includes three molded light pods for 8-inch KC Rally 800 auxiliary lights. Ansani Designs 480/323-0504
TruXedo Products Now Available for the ’04–’06 Jeep Wrangler Rubicon TruXedo is pleased to announce the shipment of the Lo Pro QT and Lo Pro QT Harley-Davidson Edition tonneau covers for the ’04–’06 Jeep Wrangler Rubicon. The TruXedo custom application is specially designed for Jeeps with a half-cab conversion. TruXedo 877/878-9336
BedSlide (A Brand of IFW) BedSlide According to BedSlide, its product is the only accessory that turns the largest cargo space—the back of the pickup truck—into easily accessed and organized compartments. With just the turn of the latch and a pull on the handle, the BedSlide rolls all of the cargo out. BedSlide (A Brand of IFW) 888/807-0099
Slime Slime Safety Spair A flat tire, dead battery or minor medical emergency is no longer a problem with the Safety Spair, a 36-piece roadside essentials kit that includes jumper cables, a first-aid kit, triangle reflectors, tire-pressure gauge and Slime tire sealant packed in a cordura nylon case. A one-touch button on the Safety Spair injects sealant into the tire, seals the puncture and reinflates the tire in as little as seven minutes, according to the company Slime 888/45-SLIME
Cernium Corporation Mobile Video Intelligence Surveillance System Cernium Corporation introduces what it claims is the world’s first mobile video intelligence surveillance system that notifies users of events via their mobile device, e-mail or personal Archerfish portal. Access live video from Archerfish SmartPortal and view from any web-enabled PC, PDA or mobile device. Cernium Corporation 703/483-3367
Daystar Dash Panels The best-selling Daystar dash and switch panels for the Jeep Wrangler TJ, JK and Hummer H3 are now available in camouflage. They feature a main tray that is suitable for mounting a GPS unit, or they can be used as convenient storage for cell phones, sunglasses, MP3 players and other small items. Daystar 800/595-7659
CelCat International LTD Maxx Fuel According to the manufacturer, Maxx Fuel’s simple design allows for easy installation on most engines. The device is mounted near the engine and connected to the engine’s air intake with a rubber hose. Once installed, the Maxx Fuel system delivers small amounts of cerium oxide via the air induction system of the engine into the combustion chamber. The cerium oxide acts as a catalyst inside the combustion chamber, enhancing burn efficiency. The net result is a cleaner, better-performing engine. CelCat International LTD 618/531-8054
Hunter Engineering Company TPMSpecs Database According to the company, Hunter’s TPMSpecs database takes the frustration out of servicing TPMS wheels by organizing and condensing more than 110 unique OE TPMS procedures into an easy-to-understand, tech-friendly format. TPMSpecs provides the sensor type, tools needed, service procedures and any special instructions based on the specific vehicle being serviced. Hunter Engineering Company 800/448-6848
Kicker Performance Audio Upgrades for Mustangs Kicker Performance Audio system upgrades are now available for purchase for most Ford Mustang models exclusively through Shelby Performance Parts dealers nationwide. According to the company, these true plug-and-play upgrades are significantly louder and clearer than stock Mustang systems, dramatically improving low-, mid- and high-frequency response. The subwoofer upgrade is only half the size of a Mustang’s stock sub, reducing subwoofer weight by 60% while remarkably improving audio output. The sub enclosure also vastly increases cargo space by fitting snugly against the inner trunk wall. Kicker 800/256-5425
Superchips Market Release of ’07–’09 GM 2.0L Turbo Coverage According to Superchips, the all-new GM Gas Flashpaq (PN 2865) is the first programmer available for the 2.0L turbo, delivering Superchips tuning for improved drivability and performance. Coverage includes the ’08–’09 Cobalt SS, ’07–’09 Solstice GXP, ’07–’09 Sky Redline and ’08–’09 HHR SS. Superchips 888/227-2447
Toyo Tires M647 Premium Drive Tire Toyo Tires introduces the M647 premium drive tire, designed for local and long-haul highway applications. The newest product in an extensive line of tires for commercial trucks. The M647 has a deep, 30/32-inch tread that provides improved wear and long service life. Toyo Tires West Coast: 800/442-8696 East Coast: 888/444-8696
OK Spark USA Sparkplug Sensor OK Spark USA proudly introduces its revolutionary OK Spark brand sparkplug sensor. This tool detects both voltage and spark without having to remove the sparkplug. Winner of three SEMA Global Media awards, this sturdy handheld sparkplug and maintenance diagnostic tool “sees” inside the cylinder head to look for an electrical arc, verifying that the plug is igniting while under compression. OK Spark USA 866/OK-SPARK
Rostra Precision Controls Custom-Designed Hands-Free Car Kits Featuring Bluetooth The ConVerse car kit allows calls to route through the vehicle’s existing stereo system, providing the driver with the highest quality sound. Full duplex digital signal processing allows both parties to converse simultaneously, and the system will easily pair up to 10 phones. Rostra Precision Controls Inc. 800/782-3379