SEMA News - May 2009

Sign Up Now to Participate in SEMA Show Priority Booth Space Selection

To participate in the 2009 SEMA Show priority booth space selection, agreements and deposits must be received by Friday, May 8.

With the 2009 SEMA Show five months away, more than 400 industry-leading manufacturers have already signed on for the opportunity to connect with buyers, builders, designers and suppliers from around the world.

Exhibitors are encouraged to take advantage of this year’s expanded freight program, providing free drayage to exhibitors with 1,000 lbs. or less of freight that is transported to the Show in their personal vehicles.Questions? Contact ConvExx Show Management at exhibit@convexx.com or call 702/450-7662, ext. 120.

The Return of Ultra-Light Drag Racing for a Good Cause

Racers and onlookers crowd around the finish line in anticipation at the 2008 SEMA Pinewood Drag Race.

The race, held in conjunction with the 2009 SEMA Installation Banquet & Gala Fundraiser, was established last year to raise money for children’s charities Childhelp and Victory Junction Gang Camp. Last year’s derby raised approximately $40,000 for the two charities.

The racetrack was purchased with proceeds from the vehicle exhibits displayed in the light-truck area of the 2008 SEMA Show. The racetrack will replace the two tracks used at last year’s event, which were donated to the charities.

The races will be held prior to the SEMA Installation Banquet & Gala Fundraiser, where the 2009 SEMA Hall of Fame inductees will be announced.

To sponsor a child at the SEMA Pinewood Drag Race, presented by eBay Motors, visit click here. For questions about the Pinewood Drag Races and the SEMA Installation Banquet & Gala Fundraiser, contact Lisa Moreno at 909/396-0289, ext. 105 or lisam@sema.org.

Top 10 New Off-Road/4-Wheel Drive Products

SEMA used a new digital tracking method for the 2008 SEMA Show New Products Showcase, allowing buyers to scan product barcodes with a keyfob and receive product details via printout or e-mail. There were 107 new products entered in the Best New Off-Road/4-Wheel Drive Product category. The following are the top 10. See all of the products entered into the New Products Showcase at www.semadigital.com.

	Auto Meter 25/8-Inch Through-the-Dial LED Gauges, www.autometer.com, 866/248-6356
	Delta Tech Industries HID Jeep/UTV Light Bar www.deltalights.com, 714/577-8028
	Skyjacker Suspensions 2009 Ford F-150 6-Inch Lift www.skyjacker.com, 318/388-0816
	ARB 4x4 Accessories Competition Snatch Block 9000 www.arbusa.com, 866/293-9078
	Rescue Tape Rescue Tape www.rescuetape.com, 877/847-2628
	Drew Technologies DashDAQ www.dashdaq.com, 734/222-5228
	Bulldog Winch 8-Piece 8,000-lb. WLL Rigging Kit www.bulldogwinch.com, 623/581-0121
	Warrior Products Jeep Rear Corner Cover Up With LED www.warriorproducts.com, 888/220-6861
	Daystar Products Synthetic Rope Winch Rollers www.daystarweb.com, 800/595-7659
	Hi-Lift Jack Co. Hi-Lift Adjustable Tube Mount www.hi-lift.com, 812/384-4441

FAST FACTS

	Media veteran Brian Medford was named online content manager for AutoTraderClassics.com. He joins Cox Communications following his employment with Omix-Ada. Medford has managed print and editorial duties for restoration mail-order giants YearOne and Mustangs Unlimited. AutoTrader.com, Atlanta, GA; 888/512-0094.
	Standards Testing Laboratories received the Tire Industry Supplier of the Year Award during the 2009 Tire Technology Expo Gala Dinner in Hamburg, Germany. Standard’s Vice President of Marketing Cheryl Schnuth accepted the award, which recognizes excellence and new endeavors in the field. Standards Testing Laboratories, Massillon, OH; 330/833-8548.
	Century Truck Caps, a division of the Truck Accessory Group (TAG), announced a financial restructuring plan aimed at the growth and stability of the Century brand. TAG Vice President of Sales, Marketing & Business Development Dennis DeLeonard will work with TAG National Marketing Director Joel Ayres and TAG Sales Managers Mike Sanford and John Stethem to extend Century’s distribution. Truck Accessory Group, Milton, PA; 800/326-5337.
	The Kasey Kahne Foundation and the Sonoma (California) Chapter of Speedway Children’s Charities have partnered for a fundraiser where one race fan will win a custom-built chopper at the 2009 Toyota/Save Mart 350 NASCAR Sprint Cup Series weekend at Infineon Raceway, June 19–21. The red-and-white chopper up for raffle was built for Kahne by Orange County Choppers. Kahne will pull the winning raffle ticket in the Wine Country Winner’s Circle at Infineon Raceway on Sunday, June 21 (Father’s Day).

Race car designer Frank Kurtis was the winner of the 2009 Justice Brothers–Shav Glick Award presented at the NASCAR Auto Club 500 at the Auto Club Speedway in Fontana, California. Kurtis’s son Arlen accepted the award. Among his motorsports innovations, Kurtis—founder of Kurtis Kraft—designed the V8 front-wheel-drive Novi Governor Special, which set a track record of 133.944 mph at Indy in 1946.

HandiGate selected SS Sales & Marketing Inc. as its sales representative for the West Coast. HandiGate is a tailgate ramp system developed by an ATV enthusiast. SS Sales & Marketing Inc., Murrieta, CA; 951/677-3116.

Automotive advertising veteran Max Butler was named marketing vice president of Global Vehicles USA. He joins Global Vehicles following 17 years of Saturn marketing for three advertising agencies in Atlanta. Global Vehicles USA is the distributor for Indian automaker Mahindra & Mahindra. Global Vehicles USA, Alpharetta, GA; 770/753-4441.

Several automobile manufacturers and suppliers have formed the GENIVI Alliance, a nonprofit organization committed to driving the development and broad adoption of an open source in-vehicle infotainment (IVI) reference platform. The founding members include BMW Group, Delphi, General Motors Corp., Intel, Magneti Marelli, PSA Peugeot Citroën, Visteon Corp. and Wind River. Alliance members are collaborating to create a shared GENIVI platform to accelerate the pace at which automakers can deliver new solutions.

Mickey Thompson Performance Tires & Wheels is a sponsor of the ORSCA Outlaw 10.5 Racing Class. Mickey Thompson’s Buy Now bonus program will award $5,000 to the 2009 Outlaw 10.5 Class championship team for using Mickey Thompson racing tires and displaying the Buy Now program decal on its vehicles. Mickey Thompson Performance Tires & Wheels, Stow, OH; 330/928-9092.

The website for the Global Automotive Aftermarket Symposium (GAAS) was redesigned to include improved attendee features, such as a speaker spotlight section, multimedia page and a direct link to register for hotel accommodations. The GAAS is an educational industry conference for senior-level executives and is supported by several automotive trade associations, including SEMA. The net proceeds from the event help fund scholarships for students planning for careers in the automotive aftermarket. GAAS is set for Wednesday and Thursday, May 6 and 7, at the Hyatt Regency O’Hare near Chicago.

Bassforms appointed new representative firms to cover the United States for its fiberglass enclosures. The firms are David Lee Marketing, End Result, RDS Sales and Marketing, Dynamic Marketing, J&S Marketing, Preferred Marketing and KLM Marketing. Bassforms, Newport Beach, CA; 877/4-NICE-BOX.

National Sprint Car Hall of Fame member Emmett Hahn will be the grand marshall of the 14th Annual Budweiser Oval Nationals, November 6–8, at the Perris Auto Speedway. Hahn is a former champion driver who currently runs the American Sprint Car Series sanctioning body and promotes the well-known Chili Bowl for Midgets every January.

PPG Industries appointed Domenic Brusco senior manager, industry relations, for North America Automotive Refinish. Brusco will be the company’s lead liaison for industry stakeholders, and he will work with industry leaders to identify and seek solutions to business challenges that face the automotive aftermarket industry. Brusco joined PPG in 1988 as a refinish territory manager in Boston, Massachusetts. PPG Industries, Strongsville, OH; 440/572-2800.

Mentoring

By Terry Kohl

The “Mentoring” section of SEMA News collects advice from some of the best mentoring minds in the automotive world on an array of topics of importance to the specialty-equipment industry.

Topic: How do you see the global financial challenges affecting the aftermarket?

The re-tooling of consumer attitudes toward vehicles (fuel economy, environment) combined with the entrepreneurial style of “growth in spite of ourselves” will continue to catch up with operators who don’t recognize trends and run too close to the financial edge. This will result in continued consolidation at the retail, WD and manufacturer levels and may well rewrite the basic dynamics of our businesses.
—Jon Wyly, Vice President e-Commerce and Affiliate Business, Keystone Automotive Operations

Research and development usually suffer during these periods because companies are funding other things, such as payroll, health insurance and taxes. Savvy retailers need to show how the fewest dollars can make the biggest change in existing vehicles. Now is the time to step up direct mailings, open houses and cruise nights in order to compete for our share of ever-tightening budgets.
—John Julis , J & J Marketing

International financial markets have a direct affect on our domestic stock market. Lean, efficiently run companies have the opportunity to survive when managed properly. Seeking new markets for products and services is critical to the success or failure of any provider. Get involved with trade organizations that work hard at identifying and defining emerging international markets.
—Sam Memmolo, President , SRM Marketing Services Inc.

Those companies that are heavily leveraged without access to cash and those companies that have failed to diversify their marketing will suffer the most. Everything will look ugly for a while, and then we will rebloom, with sweeter fruits for our efforts. This process will allow new ideas to prosper in a more open and healthy environment.
—Doug Dwyer, Executive Vice President, Schiefer Media Inc.

There may be some opportunities but, on the whole, consumers are holding on to their money. We’ll get through it, but be prepared for some bumpy roads ahead. On a more positive note, once the economy does pick up, there will be a whole lot of consumers with pent-up desires to modify their vehicles, so the industry should get a good shot in the arm.
—Bill Groak, Account Supervisor, Pacific Communications Group

SEMA News - May 2009

SEMA SPY PHOTOS

The images and information included in “Spy Photos” are supplied by the shooters at Brenda Priddy & Co. “Spy Photos” are also included each week in SEMA eNews, the association’s electronic newsletter. To receive your copy of SEMA eNews, e-mail eNews@sema.org.

Cadillac CTS-V Coupe When it Hits: Production for the V-series should start next summer when the regular coupe begins rolling out of the Lansing Grand River plant in Michigan. What Priddy Says: With GM axing its High Performance Vehicle Operations, the future of V-series Cadillacs was uncertain. These new photos show that the V-series coupe is alive and well.
BMW 6 Series Soft-Top When it Hits: The official word from BMW is a release date of 2010. What Priddy Says: The new coupe and cabrio will be available as 630, 650 and 635d models, with outputs of 272, 367 and 286 hp.
GMC’s New Terrain When it Hits: Production is slated for the third or fourth quarter of 2009, with an official debut later this year. What Priddy Says: Carrying badges indicating an all-wheel-drive variant, the Terrain will essentially replace the Pontiac Torrent and share the Theta chassis with Chevy’s Equinox.
F-250 Harley-Davidson When it Hits: The new 2010 Ford Harley-Davidson F-250 Super Duty is expected to debut before the August gathering of Harleys in Sturgis, South Dakota. What Priddy Says: The 3/4-ton Harley F-250 gets its muscle from a 362hp V10 that delivers 457 lb.-ft. of torque. Inside, the Harley look and feel extends to the black leather seats, door panels and center console. Photos Copyright Brenda Priddy & Company. Reuse or reproduction without the copyright holder’s consent is prohibited.

SEMA News - May 2009

Media’s Interest in Legislation...

…and the Potential Opportunity This Presents to Local Businesses

Each day, new laws are being considered that may significantly impact your business. In addition to making your voice heard with elected officials, you can use pending legislation as a timely news hook to position yourself as an expert resource with the local media.

Stories that deal with exhaust-noise issues, street-rod titling or old-car scrappage schemes are likely to be of interest to reporters in your hometown. As an established business person, you serve a valuable role for the media and can help advance the industry’s position on these issues while also generating positive coverage for your company.

The first step in this effort is to get involved. Join the SEMA Action Network (SAN). Since its inception in 1997, the SAN has become a potent force in advocating on behalf of the automotive community. Membership is free and provides timely action alerts regarding hobby and industry-related legislation. The alerts include simple, easy-to-read notices with tips on how to communicate with elected officials.

Even industry expert Rob Kinnan, editor of Hot Rod magazine, is a SAN member and encourages his readers to join. Visit www.semasan.com to join and learn more about the program.

SAN alerts are tailored to businesses and enthusiasts and can help industry professionals such as you further your media-relations efforts. Here are just a few easy tips:

Develop a relationship. Read your local newspaper, and watch your local news stations. If a story has already been written about proposed legislation, send the reporter a note acknowledging the story. Commend the reporter if the story has touched on the industry’s key points, and educate the reporter on the “opposing” side of the story if it was not mentioned. The note will allow you to serve as a friendly resource and aid in building and maintaining a positive relationship with the local media.

Submit a Letter to the Editor. Draft a formal letter to the editor. Most newspapers have a section where they print letters from readers regarding articles that have appeared. To increase the likelihood that your letter will be published, inquire about any guidelines in advance. Word counts and formats vary from publication to publication.

Consider a pitch. If you find that your local media has not reported on an issue, pitch the story to them. Use the legislative alert and key message points provided by SAN as the basis for the pitch. Be sure to review the legislative alert carefully, and be prepared for the reporter to ask about the opposing viewpoint. Also, be strategic about who you decide to pitch. Research previous stories covered and be familiar with the reporter’s writing style. Steer clear of anyone who may be controversial.

Be resourceful. As you communicate with the media on these issues, remember to position yourself as a resource. You can do more than assist as a local industry expert. If you have eye-catching project vehicles or a shop filled with accessories, you can offer your store as a location for television interviews. You can also utilize SEMA and direct reporters to the association, if they are looking for a national spokesperson, seeking research or searching for trend information.

Utilize SEMA. SEMA members can contact the association’s public relations department for help and information on how to work with local media and generate a public relations plan. To learn more, e-mail: pr@sema.org.

	Aftermarket News—February 2009 “Cash for Clunkers Legislation Withdrawn From Senate Stimulus” SEMA recently successfully opposed a “Cash for Clunkers” bill that would have given a cash voucher to purchase a newer vehicle to any person who traded in an older car. This was a key federal issue, considered as part of the federal economic stimulus package. It was reported in newspapers across the country, including The Wall Street Journal and The New York Times. Most reporters are looking for local angles on this national story. This is where you come in. As a local business person and industry expert, a simple call or letter to your hometown newspaper would likely generate interest and additional calls.
	Aftermarket Business—February 2009 “SEMA Urges Action Against Oregon Bill That Prohibits Sale of Aftermarket Parts” The most important thing to do when an issue comes up in your state is to contact your local elected officials. But a story in the paper communicating the industry’s position is helpful, too, since it may spark hundreds of others to take action as well. When state issues arise, such as this one in Oregon, it’s an opportunity for businesses to take action. Use the same key messages from the SAN action alert to craft a letter to your newspapers and TV stations and encourage them to do a story on the issue.
	Hot Rod—January 2009 Hot Rod Editor Rob Kinnan recognizes the value of the SAN and encourages his readers to join the group. Members are alerted about pending bills that may impact the automotive hobby.
	TheCabin.Net —March 6, 2009 “Proposed Ordinance Could Restrict ‘Shade Tree Mechanics’” In the town of Conway, Arkansas, an ordinance was proposed that provided that “…no person shall park, store, leave or permit the parking, storing or leaving of any motor vehicle, and/or trailer of any kind, which is wrecked or inoperable, whether attended or not, upon any private property within the city…” and would consider any car left unattended after 72 hours as abandoned. News outlets in Arkansas, both print and TV, reported on this ordinance, giving local businesses a great opportunity to respond and develop a relationship with the reporters.

SEMA News - May 2009

Media’s Interest in Legislation...

…and the Potential Opportunity This Presents to Local Businesses

Each day, new laws are being considered that may significantly impact your business. In addition to making your voice heard with elected officials, you can use pending legislation as a timely news hook to position yourself as an expert resource with the local media.

Stories that deal with exhaust-noise issues, street-rod titling or old-car scrappage schemes are likely to be of interest to reporters in your hometown. As an established business person, you serve a valuable role for the media and can help advance the industry’s position on these issues while also generating positive coverage for your company.

The first step in this effort is to get involved. Join the SEMA Action Network (SAN). Since its inception in 1997, the SAN has become a potent force in advocating on behalf of the automotive community. Membership is free and provides timely action alerts regarding hobby and industry-related legislation. The alerts include simple, easy-to-read notices with tips on how to communicate with elected officials.

Even industry expert Rob Kinnan, editor of Hot Rod magazine, is a SAN member and encourages his readers to join. Visit www.semasan.com to join and learn more about the program.

SAN alerts are tailored to businesses and enthusiasts and can help industry professionals such as you further your media-relations efforts. Here are just a few easy tips:

Develop a relationship. Read your local newspaper, and watch your local news stations. If a story has already been written about proposed legislation, send the reporter a note acknowledging the story. Commend the reporter if the story has touched on the industry’s key points, and educate the reporter on the “opposing” side of the story if it was not mentioned. The note will allow you to serve as a friendly resource and aid in building and maintaining a positive relationship with the local media.

Submit a Letter to the Editor. Draft a formal letter to the editor. Most newspapers have a section where they print letters from readers regarding articles that have appeared. To increase the likelihood that your letter will be published, inquire about any guidelines in advance. Word counts and formats vary from publication to publication.

Consider a pitch. If you find that your local media has not reported on an issue, pitch the story to them. Use the legislative alert and key message points provided by SAN as the basis for the pitch. Be sure to review the legislative alert carefully, and be prepared for the reporter to ask about the opposing viewpoint. Also, be strategic about who you decide to pitch. Research previous stories covered and be familiar with the reporter’s writing style. Steer clear of anyone who may be controversial.

Be resourceful. As you communicate with the media on these issues, remember to position yourself as a resource. You can do more than assist as a local industry expert. If you have eye-catching project vehicles or a shop filled with accessories, you can offer your store as a location for television interviews. You can also utilize SEMA and direct reporters to the association, if they are looking for a national spokesperson, seeking research or searching for trend information.

Utilize SEMA. SEMA members can contact the association’s public relations department for help and information on how to work with local media and generate a public relations plan. To learn more, e-mail: pr@sema.org.

	Aftermarket News—February 2009 “Cash for Clunkers Legislation Withdrawn From Senate Stimulus” SEMA recently successfully opposed a “Cash for Clunkers” bill that would have given a cash voucher to purchase a newer vehicle to any person who traded in an older car. This was a key federal issue, considered as part of the federal economic stimulus package. It was reported in newspapers across the country, including The Wall Street Journal and The New York Times. Most reporters are looking for local angles on this national story. This is where you come in. As a local business person and industry expert, a simple call or letter to your hometown newspaper would likely generate interest and additional calls.
	Aftermarket Business—February 2009 “SEMA Urges Action Against Oregon Bill That Prohibits Sale of Aftermarket Parts” The most important thing to do when an issue comes up in your state is to contact your local elected officials. But a story in the paper communicating the industry’s position is helpful, too, since it may spark hundreds of others to take action as well. When state issues arise, such as this one in Oregon, it’s an opportunity for businesses to take action. Use the same key messages from the SAN action alert to craft a letter to your newspapers and TV stations and encourage them to do a story on the issue.
	Hot Rod—January 2009 Hot Rod Editor Rob Kinnan recognizes the value of the SAN and encourages his readers to join the group. Members are alerted about pending bills that may impact the automotive hobby.
	TheCabin.Net —March 6, 2009 “Proposed Ordinance Could Restrict ‘Shade Tree Mechanics’” In the town of Conway, Arkansas, an ordinance was proposed that provided that “…no person shall park, store, leave or permit the parking, storing or leaving of any motor vehicle, and/or trailer of any kind, which is wrecked or inoperable, whether attended or not, upon any private property within the city…” and would consider any car left unattended after 72 hours as abandoned. News outlets in Arkansas, both print and TV, reported on this ordinance, giving local businesses a great opportunity to respond and develop a relationship with the reporters.

SEMA News - May 2009
SEMA LEGISLATIVE AND TECHNICAL AFFAIRS

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.

STATE UPDATE

California

Annual Inspections: Legislation has been reintroduced in the California Assembly to require annual smog-check inspections for vehicles 15 years old and older. The bill would also require that funds generated through the additional inspection fees be deposited into an account that can be used to scrap older cars. In 2004, a new law was enacted in California to require the lifetime testing of all ’76 and newer model-year vehicles. Pre-’76 motor vehicles would remain exempt under this bill. SEMA succeeded in defeating this measure in the previous two legislative sessions.

New Jersey

Street Rods/Customs: SEMA-model legislation that would create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the New Jersey Senate Transportation Committee. 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 the body of the vehicle most closely resembles.

New York

Historic Vehicles: SEMA-supported legislation has been reintroduced in the New York Assembly to provide that historical-vehicle owners pay only a one-time registration fee of $100 upon initial registration. The bill has been referred to the New York Assembly Transportation Committee for consideration. The $100 one-time fee would replace the current annual fee of $23.

Tennessee

Antique Vehicles: SEMA-supported legislation has been introduced in the Tennessee Legislature that would amend the state’s current law defining antique motor vehicles to permit use of these vehicles for general transportation purposes. Under current Tennessee law, use of antique vehicles is strictly limited to club activities, exhibits, tours and for general transportation only on Saturday and Sunday.

Utah

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle titling and registration classification for street rods and custom vehicles has been approved by the Utah House of Representatives. 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. Under the bill, kit cars and replica vehicles will be assigned certificates of title bearing the same model-year designations as the production vehicles they most closely resemble. The bill now moves to the Utah Senate for consideration.

Washington

Scrappage: On the heels of the defeat of a U.S. Congressional proposal to create a national cash-for-clunkers program, SEMA helped turn back an effort in the Washington Legislature that would have implemented a vehicle scrappage program for passenger vehicles more than 15 years old. Under the bill, qualifying vehicles would have had to be registered for a 24-month period and be in satisfactory operating condition. Replacement vehicles purchased under the plan would have been required to have an EPA highway gasoline mileage rating of at least 30 mpg. Participants in the program were to be granted a sales-tax exemption for the first $2,000 of tax paid on the purchase price. All trade-in vehicles would have been destroyed, regardless of their historical value or collector interest.

West Virginia

Inoperable Vehicles: For the fourth time, a bill has been introduced in West Virginia that would further restrict the ability of state vehicle hobbyists from maintaining inoperable vehicles on private property. The bill would redefine “abandoned motor vehicles” to include vehicles or vehicle parts that are either unlicensed or inoperable, or both, are not in an enclosed building and have remained on private property for more than 30 days. Under current law, the abandoned vehicle law applies primarily to vehicles on public property. The bill would make violation a misdemeanor offense punishable by substantial fines, community service and jail. SEMA has defeated all previous versions of this measure.

Wyoming

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the Wyoming Legislature and signed into law by Governor Dave Freudenthal. The new law 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 law allows kit cars and replica vehicles to be assigned certificates of title bearing the same model-year designation as the production vehicles they most closely resemble.

FEDERAL UPDATE

Economic Stimulus Tax Breaks: The $787 billion stimulus bill that President Obama signed into law earlier this year contains several provisions of direct benefit to SEMA members and their workers. Highlights include:

Bonus Depreciation: It extends a bonus depreciation already in effect, permitting businesses to immediately write off 50% of the cost of new equipment purchased in 2009.

Enhanced Small-Business Expensing: It extends a small-business expensing provision, allowing small businesses to write off up to $250,000 of capital expenditures made during 2009 rather than recovering the costs over time through depreciation.

Five-Year Carryback: Small businesses with gross receipts of $15 million or less can carry back net operating losses for five years instead of two years. Example: A business that currently is losing money may apply these losses to a previous profitable year and then claim a refund for taxes paid that year.

Payroll Tax Credit: For 2009 and 2010, the new law provides a refundable tax credit of up to $400 for working individuals and $800 for working families, phasing out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 couples). The Treasury Department adjusted the withholding tables so that the tax credit will be included in payroll checks.

Sales-Tax Deduction for Vehicle Purchases: The new law allows consumers to take a federal deduction for state and local sales/excise taxes paid on the purchase of a new car, light truck, recreational vehicle or motorcycle through 2009. This deduction is phased out for taxpayers with an adjusted gross income in excess of $125,000 ($250,000 for couples) and applies to car loans up to $49,500.

Postage Increase: Starting May 11, 2009, the cost of a first-class stamp will rise by $.02 to $.44 for the first ounce and $.17 for each additional ounce. Other increases include: large envelopes at $.88 for the first ounce; parcels at $1.22 for the first ounce; and postcards at $0.28. Under a 2006 law, annual postal increases may not exceed the rate of inflation. Annual price adjustments for first-class mail and periodicals occur in May, and increases for other shipping services occur in January.

SEMA News - May 2009
SEMA LEGISLATIVE AND TECHNICAL AFFAIRS

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.

STATE UPDATE

California

Annual Inspections: Legislation has been reintroduced in the California Assembly to require annual smog-check inspections for vehicles 15 years old and older. The bill would also require that funds generated through the additional inspection fees be deposited into an account that can be used to scrap older cars. In 2004, a new law was enacted in California to require the lifetime testing of all ’76 and newer model-year vehicles. Pre-’76 motor vehicles would remain exempt under this bill. SEMA succeeded in defeating this measure in the previous two legislative sessions.

New Jersey

Street Rods/Customs: SEMA-model legislation that would create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the New Jersey Senate Transportation Committee. 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 the body of the vehicle most closely resembles.

New York

Historic Vehicles: SEMA-supported legislation has been reintroduced in the New York Assembly to provide that historical-vehicle owners pay only a one-time registration fee of $100 upon initial registration. The bill has been referred to the New York Assembly Transportation Committee for consideration. The $100 one-time fee would replace the current annual fee of $23.

Tennessee

Antique Vehicles: SEMA-supported legislation has been introduced in the Tennessee Legislature that would amend the state’s current law defining antique motor vehicles to permit use of these vehicles for general transportation purposes. Under current Tennessee law, use of antique vehicles is strictly limited to club activities, exhibits, tours and for general transportation only on Saturday and Sunday.

Utah

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle titling and registration classification for street rods and custom vehicles has been approved by the Utah House of Representatives. 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. Under the bill, kit cars and replica vehicles will be assigned certificates of title bearing the same model-year designations as the production vehicles they most closely resemble. The bill now moves to the Utah Senate for consideration.

Washington

Scrappage: On the heels of the defeat of a U.S. Congressional proposal to create a national cash-for-clunkers program, SEMA helped turn back an effort in the Washington Legislature that would have implemented a vehicle scrappage program for passenger vehicles more than 15 years old. Under the bill, qualifying vehicles would have had to be registered for a 24-month period and be in satisfactory operating condition. Replacement vehicles purchased under the plan would have been required to have an EPA highway gasoline mileage rating of at least 30 mpg. Participants in the program were to be granted a sales-tax exemption for the first $2,000 of tax paid on the purchase price. All trade-in vehicles would have been destroyed, regardless of their historical value or collector interest.

West Virginia

Inoperable Vehicles: For the fourth time, a bill has been introduced in West Virginia that would further restrict the ability of state vehicle hobbyists from maintaining inoperable vehicles on private property. The bill would redefine “abandoned motor vehicles” to include vehicles or vehicle parts that are either unlicensed or inoperable, or both, are not in an enclosed building and have remained on private property for more than 30 days. Under current law, the abandoned vehicle law applies primarily to vehicles on public property. The bill would make violation a misdemeanor offense punishable by substantial fines, community service and jail. SEMA has defeated all previous versions of this measure.

Wyoming

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the Wyoming Legislature and signed into law by Governor Dave Freudenthal. The new law 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 law allows kit cars and replica vehicles to be assigned certificates of title bearing the same model-year designation as the production vehicles they most closely resemble.

FEDERAL UPDATE

Economic Stimulus Tax Breaks: The $787 billion stimulus bill that President Obama signed into law earlier this year contains several provisions of direct benefit to SEMA members and their workers. Highlights include:

Bonus Depreciation: It extends a bonus depreciation already in effect, permitting businesses to immediately write off 50% of the cost of new equipment purchased in 2009.

Enhanced Small-Business Expensing: It extends a small-business expensing provision, allowing small businesses to write off up to $250,000 of capital expenditures made during 2009 rather than recovering the costs over time through depreciation.

Five-Year Carryback: Small businesses with gross receipts of $15 million or less can carry back net operating losses for five years instead of two years. Example: A business that currently is losing money may apply these losses to a previous profitable year and then claim a refund for taxes paid that year.

Payroll Tax Credit: For 2009 and 2010, the new law provides a refundable tax credit of up to $400 for working individuals and $800 for working families, phasing out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 couples). The Treasury Department adjusted the withholding tables so that the tax credit will be included in payroll checks.

Sales-Tax Deduction for Vehicle Purchases: The new law allows consumers to take a federal deduction for state and local sales/excise taxes paid on the purchase of a new car, light truck, recreational vehicle or motorcycle through 2009. This deduction is phased out for taxpayers with an adjusted gross income in excess of $125,000 ($250,000 for couples) and applies to car loans up to $49,500.

Postage Increase: Starting May 11, 2009, the cost of a first-class stamp will rise by $.02 to $.44 for the first ounce and $.17 for each additional ounce. Other increases include: large envelopes at $.88 for the first ounce; parcels at $1.22 for the first ounce; and postcards at $0.28. Under a 2006 law, annual postal increases may not exceed the rate of inflation. Annual price adjustments for first-class mail and periodicals occur in May, and increases for other shipping services occur in January.

SEMA News - May 2009
SEMA LEGISLATIVE AND TECHNICAL AFFAIRS

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.

STATE UPDATE

California

Annual Inspections: Legislation has been reintroduced in the California Assembly to require annual smog-check inspections for vehicles 15 years old and older. The bill would also require that funds generated through the additional inspection fees be deposited into an account that can be used to scrap older cars. In 2004, a new law was enacted in California to require the lifetime testing of all ’76 and newer model-year vehicles. Pre-’76 motor vehicles would remain exempt under this bill. SEMA succeeded in defeating this measure in the previous two legislative sessions.

New Jersey

Street Rods/Customs: SEMA-model legislation that would create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the New Jersey Senate Transportation Committee. 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 the body of the vehicle most closely resembles.

New York

Historic Vehicles: SEMA-supported legislation has been reintroduced in the New York Assembly to provide that historical-vehicle owners pay only a one-time registration fee of $100 upon initial registration. The bill has been referred to the New York Assembly Transportation Committee for consideration. The $100 one-time fee would replace the current annual fee of $23.

Tennessee

Antique Vehicles: SEMA-supported legislation has been introduced in the Tennessee Legislature that would amend the state’s current law defining antique motor vehicles to permit use of these vehicles for general transportation purposes. Under current Tennessee law, use of antique vehicles is strictly limited to club activities, exhibits, tours and for general transportation only on Saturday and Sunday.

Utah

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle titling and registration classification for street rods and custom vehicles has been approved by the Utah House of Representatives. 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. Under the bill, kit cars and replica vehicles will be assigned certificates of title bearing the same model-year designations as the production vehicles they most closely resemble. The bill now moves to the Utah Senate for consideration.

Washington

Scrappage: On the heels of the defeat of a U.S. Congressional proposal to create a national cash-for-clunkers program, SEMA helped turn back an effort in the Washington Legislature that would have implemented a vehicle scrappage program for passenger vehicles more than 15 years old. Under the bill, qualifying vehicles would have had to be registered for a 24-month period and be in satisfactory operating condition. Replacement vehicles purchased under the plan would have been required to have an EPA highway gasoline mileage rating of at least 30 mpg. Participants in the program were to be granted a sales-tax exemption for the first $2,000 of tax paid on the purchase price. All trade-in vehicles would have been destroyed, regardless of their historical value or collector interest.

West Virginia

Inoperable Vehicles: For the fourth time, a bill has been introduced in West Virginia that would further restrict the ability of state vehicle hobbyists from maintaining inoperable vehicles on private property. The bill would redefine “abandoned motor vehicles” to include vehicles or vehicle parts that are either unlicensed or inoperable, or both, are not in an enclosed building and have remained on private property for more than 30 days. Under current law, the abandoned vehicle law applies primarily to vehicles on public property. The bill would make violation a misdemeanor offense punishable by substantial fines, community service and jail. SEMA has defeated all previous versions of this measure.

Wyoming

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the Wyoming Legislature and signed into law by Governor Dave Freudenthal. The new law 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 law allows kit cars and replica vehicles to be assigned certificates of title bearing the same model-year designation as the production vehicles they most closely resemble.

FEDERAL UPDATE

Economic Stimulus Tax Breaks: The $787 billion stimulus bill that President Obama signed into law earlier this year contains several provisions of direct benefit to SEMA members and their workers. Highlights include:

Bonus Depreciation: It extends a bonus depreciation already in effect, permitting businesses to immediately write off 50% of the cost of new equipment purchased in 2009.

Enhanced Small-Business Expensing: It extends a small-business expensing provision, allowing small businesses to write off up to $250,000 of capital expenditures made during 2009 rather than recovering the costs over time through depreciation.

Five-Year Carryback: Small businesses with gross receipts of $15 million or less can carry back net operating losses for five years instead of two years. Example: A business that currently is losing money may apply these losses to a previous profitable year and then claim a refund for taxes paid that year.

Payroll Tax Credit: For 2009 and 2010, the new law provides a refundable tax credit of up to $400 for working individuals and $800 for working families, phasing out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 couples). The Treasury Department adjusted the withholding tables so that the tax credit will be included in payroll checks.

Sales-Tax Deduction for Vehicle Purchases: The new law allows consumers to take a federal deduction for state and local sales/excise taxes paid on the purchase of a new car, light truck, recreational vehicle or motorcycle through 2009. This deduction is phased out for taxpayers with an adjusted gross income in excess of $125,000 ($250,000 for couples) and applies to car loans up to $49,500.

Postage Increase: Starting May 11, 2009, the cost of a first-class stamp will rise by $.02 to $.44 for the first ounce and $.17 for each additional ounce. Other increases include: large envelopes at $.88 for the first ounce; parcels at $1.22 for the first ounce; and postcards at $0.28. Under a 2006 law, annual postal increases may not exceed the rate of inflation. Annual price adjustments for first-class mail and periodicals occur in May, and increases for other shipping services occur in January.

SEMA News - May 2009
SEMA LEGISLATIVE AND TECHNICAL AFFAIRS

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.

STATE UPDATE

California

Annual Inspections: Legislation has been reintroduced in the California Assembly to require annual smog-check inspections for vehicles 15 years old and older. The bill would also require that funds generated through the additional inspection fees be deposited into an account that can be used to scrap older cars. In 2004, a new law was enacted in California to require the lifetime testing of all ’76 and newer model-year vehicles. Pre-’76 motor vehicles would remain exempt under this bill. SEMA succeeded in defeating this measure in the previous two legislative sessions.

New Jersey

Street Rods/Customs: SEMA-model legislation that would create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the New Jersey Senate Transportation Committee. 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 the body of the vehicle most closely resembles.

New York

Historic Vehicles: SEMA-supported legislation has been reintroduced in the New York Assembly to provide that historical-vehicle owners pay only a one-time registration fee of $100 upon initial registration. The bill has been referred to the New York Assembly Transportation Committee for consideration. The $100 one-time fee would replace the current annual fee of $23.

Tennessee

Antique Vehicles: SEMA-supported legislation has been introduced in the Tennessee Legislature that would amend the state’s current law defining antique motor vehicles to permit use of these vehicles for general transportation purposes. Under current Tennessee law, use of antique vehicles is strictly limited to club activities, exhibits, tours and for general transportation only on Saturday and Sunday.

Utah

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle titling and registration classification for street rods and custom vehicles has been approved by the Utah House of Representatives. 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. Under the bill, kit cars and replica vehicles will be assigned certificates of title bearing the same model-year designations as the production vehicles they most closely resemble. The bill now moves to the Utah Senate for consideration.

Washington

Scrappage: On the heels of the defeat of a U.S. Congressional proposal to create a national cash-for-clunkers program, SEMA helped turn back an effort in the Washington Legislature that would have implemented a vehicle scrappage program for passenger vehicles more than 15 years old. Under the bill, qualifying vehicles would have had to be registered for a 24-month period and be in satisfactory operating condition. Replacement vehicles purchased under the plan would have been required to have an EPA highway gasoline mileage rating of at least 30 mpg. Participants in the program were to be granted a sales-tax exemption for the first $2,000 of tax paid on the purchase price. All trade-in vehicles would have been destroyed, regardless of their historical value or collector interest.

West Virginia

Inoperable Vehicles: For the fourth time, a bill has been introduced in West Virginia that would further restrict the ability of state vehicle hobbyists from maintaining inoperable vehicles on private property. The bill would redefine “abandoned motor vehicles” to include vehicles or vehicle parts that are either unlicensed or inoperable, or both, are not in an enclosed building and have remained on private property for more than 30 days. Under current law, the abandoned vehicle law applies primarily to vehicles on public property. The bill would make violation a misdemeanor offense punishable by substantial fines, community service and jail. SEMA has defeated all previous versions of this measure.

Wyoming

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the Wyoming Legislature and signed into law by Governor Dave Freudenthal. The new law 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 law allows kit cars and replica vehicles to be assigned certificates of title bearing the same model-year designation as the production vehicles they most closely resemble.

FEDERAL UPDATE

Economic Stimulus Tax Breaks: The $787 billion stimulus bill that President Obama signed into law earlier this year contains several provisions of direct benefit to SEMA members and their workers. Highlights include:

Bonus Depreciation: It extends a bonus depreciation already in effect, permitting businesses to immediately write off 50% of the cost of new equipment purchased in 2009.

Enhanced Small-Business Expensing: It extends a small-business expensing provision, allowing small businesses to write off up to $250,000 of capital expenditures made during 2009 rather than recovering the costs over time through depreciation.

Five-Year Carryback: Small businesses with gross receipts of $15 million or less can carry back net operating losses for five years instead of two years. Example: A business that currently is losing money may apply these losses to a previous profitable year and then claim a refund for taxes paid that year.

Payroll Tax Credit: For 2009 and 2010, the new law provides a refundable tax credit of up to $400 for working individuals and $800 for working families, phasing out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 couples). The Treasury Department adjusted the withholding tables so that the tax credit will be included in payroll checks.

Sales-Tax Deduction for Vehicle Purchases: The new law allows consumers to take a federal deduction for state and local sales/excise taxes paid on the purchase of a new car, light truck, recreational vehicle or motorcycle through 2009. This deduction is phased out for taxpayers with an adjusted gross income in excess of $125,000 ($250,000 for couples) and applies to car loans up to $49,500.

Postage Increase: Starting May 11, 2009, the cost of a first-class stamp will rise by $.02 to $.44 for the first ounce and $.17 for each additional ounce. Other increases include: large envelopes at $.88 for the first ounce; parcels at $1.22 for the first ounce; and postcards at $0.28. Under a 2006 law, annual postal increases may not exceed the rate of inflation. Annual price adjustments for first-class mail and periodicals occur in May, and increases for other shipping services occur in January.

SEMA News - May 2009
SEMA LEGISLATIVE AND TECHNICAL AFFAIRS

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.

STATE UPDATE

California

Annual Inspections: Legislation has been reintroduced in the California Assembly to require annual smog-check inspections for vehicles 15 years old and older. The bill would also require that funds generated through the additional inspection fees be deposited into an account that can be used to scrap older cars. In 2004, a new law was enacted in California to require the lifetime testing of all ’76 and newer model-year vehicles. Pre-’76 motor vehicles would remain exempt under this bill. SEMA succeeded in defeating this measure in the previous two legislative sessions.

New Jersey

Street Rods/Customs: SEMA-model legislation that would create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the New Jersey Senate Transportation Committee. 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 the body of the vehicle most closely resembles.

New York

Historic Vehicles: SEMA-supported legislation has been reintroduced in the New York Assembly to provide that historical-vehicle owners pay only a one-time registration fee of $100 upon initial registration. The bill has been referred to the New York Assembly Transportation Committee for consideration. The $100 one-time fee would replace the current annual fee of $23.

Tennessee

Antique Vehicles: SEMA-supported legislation has been introduced in the Tennessee Legislature that would amend the state’s current law defining antique motor vehicles to permit use of these vehicles for general transportation purposes. Under current Tennessee law, use of antique vehicles is strictly limited to club activities, exhibits, tours and for general transportation only on Saturday and Sunday.

Utah

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle titling and registration classification for street rods and custom vehicles has been approved by the Utah House of Representatives. 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. Under the bill, kit cars and replica vehicles will be assigned certificates of title bearing the same model-year designations as the production vehicles they most closely resemble. The bill now moves to the Utah Senate for consideration.

Washington

Scrappage: On the heels of the defeat of a U.S. Congressional proposal to create a national cash-for-clunkers program, SEMA helped turn back an effort in the Washington Legislature that would have implemented a vehicle scrappage program for passenger vehicles more than 15 years old. Under the bill, qualifying vehicles would have had to be registered for a 24-month period and be in satisfactory operating condition. Replacement vehicles purchased under the plan would have been required to have an EPA highway gasoline mileage rating of at least 30 mpg. Participants in the program were to be granted a sales-tax exemption for the first $2,000 of tax paid on the purchase price. All trade-in vehicles would have been destroyed, regardless of their historical value or collector interest.

West Virginia

Inoperable Vehicles: For the fourth time, a bill has been introduced in West Virginia that would further restrict the ability of state vehicle hobbyists from maintaining inoperable vehicles on private property. The bill would redefine “abandoned motor vehicles” to include vehicles or vehicle parts that are either unlicensed or inoperable, or both, are not in an enclosed building and have remained on private property for more than 30 days. Under current law, the abandoned vehicle law applies primarily to vehicles on public property. The bill would make violation a misdemeanor offense punishable by substantial fines, community service and jail. SEMA has defeated all previous versions of this measure.

Wyoming

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles was approved by the Wyoming Legislature and signed into law by Governor Dave Freudenthal. The new law 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 law allows kit cars and replica vehicles to be assigned certificates of title bearing the same model-year designation as the production vehicles they most closely resemble.

FEDERAL UPDATE

Economic Stimulus Tax Breaks: The $787 billion stimulus bill that President Obama signed into law earlier this year contains several provisions of direct benefit to SEMA members and their workers. Highlights include:

Bonus Depreciation: It extends a bonus depreciation already in effect, permitting businesses to immediately write off 50% of the cost of new equipment purchased in 2009.

Enhanced Small-Business Expensing: It extends a small-business expensing provision, allowing small businesses to write off up to $250,000 of capital expenditures made during 2009 rather than recovering the costs over time through depreciation.

Five-Year Carryback: Small businesses with gross receipts of $15 million or less can carry back net operating losses for five years instead of two years. Example: A business that currently is losing money may apply these losses to a previous profitable year and then claim a refund for taxes paid that year.

Payroll Tax Credit: For 2009 and 2010, the new law provides a refundable tax credit of up to $400 for working individuals and $800 for working families, phasing out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 couples). The Treasury Department adjusted the withholding tables so that the tax credit will be included in payroll checks.

Sales-Tax Deduction for Vehicle Purchases: The new law allows consumers to take a federal deduction for state and local sales/excise taxes paid on the purchase of a new car, light truck, recreational vehicle or motorcycle through 2009. This deduction is phased out for taxpayers with an adjusted gross income in excess of $125,000 ($250,000 for couples) and applies to car loans up to $49,500.

Postage Increase: Starting May 11, 2009, the cost of a first-class stamp will rise by $.02 to $.44 for the first ounce and $.17 for each additional ounce. Other increases include: large envelopes at $.88 for the first ounce; parcels at $1.22 for the first ounce; and postcards at $0.28. Under a 2006 law, annual postal increases may not exceed the rate of inflation. Annual price adjustments for first-class mail and periodicals occur in May, and increases for other shipping services occur in January.

SEMA News - May 2009
SEMA LEGISLATIVE AND TECHNICAL AFFAIRS

Health Care Reform Takes Center Stage

SEMA Members Agree the Solution Must Be Affordable

By Stuart Gosswein

SEMA members expressed a strong desire to provide access to high-quality health care benefits to their workers, even though it was a financial strain on their small business to do so, especially under current economic conditions.

Under the current system, nearly 27 million small-business owners, employees and dependents are left uninsured. Skyrocketing premiums have made it especially difficult for specialty-automotive companies to offer health care coverage to their employees. Enacting legislation to help SEMA-member businesses gain access to affordable coverage remains a top priority for the association—especially during these times of economic uncertainty.

“The SEMA member survey provides valuable insight into the health care dilemma faced by small businesses,” said Steve McDonald, SEMA’s vice president of government affairs. “SEMA members want to ensure that their employees have access to quality coverage while cautioning that there is no one-size-fits-all answer. More than any other, one point revealed in the survey results is abundantly clear: In the midst of the current economic downturn, the solution must be affordable.”

Nearly all SEMA members are small businesses. As of early 2009, 25% of SEMA-member companies participating in the survey provided health insurance and paid the entire premium. Another 47% asked the worker to pay a portion of the premium, while 28% provided no health care coverage. Since SEMA last surveyed its members on this question in 2005, there’s been a continued trend toward requiring the worker to help pay the premium. Companies also took other steps to reduce premiums, such as seeking reduced coverage and increased deductibles.

Last year, insurance premiums rose at an annual rate of 10% and beyond for more than 50% of respondent companies. For those companies that provided coverage, 27% of respondents paid an average premium of $3,000–$5,000 per employee per year, while 36% paid more than $5,000 per year.

The survey indicated a willingness to work within the current employer-based system or transfer health insurance responsibilities to individuals. The key message was that any solution needed to be affordable and could not impose costly mandates on the employer.

The survey showed that federal health care tax credits to employers would be a powerful incentive for increasing health insurance coverage. Nearly 41% of the respondents agreed that a federal tax credit of $2,000 per employee would make it financially possible for their companies to voluntarily cover 60% of the premiums. Another 43% already provide at least 60% coverage. There was also widespread support for permitting small businesses to band together to pool risk, reduce insurance premiums and level the playing field between large and small companies in the health care market.

In contrast, SEMA members generally opposed a national pay-or-play policy with mandates on employers to provide certain defined health care benefits to their workers or pay into a government insurance plan that would. Sixty-six percent of the respondents were opposed to the government defining the kind of health care coverage an employer must provide or the percent of premiums that an employer must pay under a pay-or-play system. Under proposed legislation, small businesses could be exempt from such a system, but their workers could be required to purchase insurance on their own through an individual mandate.

SEMA members expressed a strong desire to provide access to high-quality health care benefits to their workers, even though it was a financial strain on their small business to do so, especially under current economic conditions. SEMA members criticized the government and insurance companies for not doing enough to control health care costs and expressed frustration, confusion and uncertainty over the exact reasons why premiums have been rising so quickly.

SEMA is a member of the Small Business Coalition for Affordable Healthcare, the nation’s leading coalition dedicated to increasing access and affordability of health insurance for the largest segment of the uninsured—small-business owners, employees and their dependents. Congress is expected to begin debating reform legislation in the near future. President Obama has indicated that he wants to expand the current employer-based system and implement other structural reforms to promote market-based competition, reduce costs and simplify paperwork.

“SEMA welcomes the current opportunity to provide a national solution for access to affordable care,” said McDonald. “We remain enthused about legislation that would establish state or nationwide health insurance purchasing pools offering small businesses a wide range of health plan choices.

SEMA will also work to promote other comprehensive reforms to provide quality, value and competition.”

For more information about the survey, please contact Stuart Gosswein at stuartg@sema.org.

A Roadmap to Enacting Reform

Legislation must be enacted into law in order to achieve any significant health care reform. Previous attempts have failed, so success this time is not guaranteed. Here are some contemplated steps on a path to reform.

Step one has been accomplished: gaining widespread agreement that the health care delivery system is broken. Unlike in years past, the major players are all willing to talk—politicians, health care providers, insurance companies, drug companies, big and small businesses, individuals, etc. Reasons vary: the current system is unsustainable, the number of uninsured is increasing, there are profits to be made by providing care to the uninsured, etc. Step two is reaching an agreement on a direction for reform. President Obama wants to expand the current employer-based system and implement other structural reforms to promote market-based competition, reduce costs and simplify paperwork. Under this approach, companies would be required to provide minimum health coverage to their workers or pay a percentage of payroll to fund a nationwide health insurance program for uninsured Americans. The payroll tax would probably not apply to “small businesses,” but that term has not been defined.

“The United States spends $2 trillion a year on health care, and that number is expected to double in the next 10 years. America’s fiscal situation will remain on shaky ground as long as we continue receiving such poor returns on this crucial investment. If our initial efforts to restore American prosperity are ever to bear true fruit, Congress must follow up by creating a high-quality, universally accessible and cost-effective health-care system.” —Senator Max Baucus, Chairman of the Senate Finance Committee

Congress will attempt to craft legislation to address these and other questions. Lawmakers in the U.S. Senate and House will hold hearings and discussions this spring. The goal is to draft legislation in Congress during the summer and complete work this year. It is a very ambitious if not impossible schedule, since the issues—taxes, health and commerce—are under the jurisdiction of multiple committees. Additionally, there will likely be significant political differences on the role and scope of government intervention in the marketplace. Whether these differences can be bridged is unclear. Lawmakers view the current window of opportunity to achieve success as narrow, since the momentum created by the 2008 elections will slow and we will soon be caught up in the 2010 election cycle. The nation’s economic woes may further slow progress.

SEMA is actively engaged on Capitol Hill and working closely with the National Federation of Independent Business and, as a member of the Small Business Coalition for Affordable Healthcare, to represent and address small-business concerns during this critical debate.