SEMA eNews Vol. 17, No. 1, January 2, 2014

2013 Legislative & Regulatory Year in Review

SEMA News—December 2013

LEGISLATIVE AND TECHNICAL AFFAIRS
By Steve McDonald

Law and Order

2013: The Year in Review

The laws and regulations that govern how SEMA members do business have a continuous impact on the way automotive specialty-equipment products are made, distributed and marketed. The charge of the SEMA Government Affairs office is to stay on top of relevant state and federal legislation and regulations to ensure the best possible outcome for the membership. The following are just a few examples of critical legislative/regulatory issues that the SEMA government affairs team was involved in this year.

STATE UPDATE

Arkansas Motor Vehicle Lighting: SEMA helped amend legislation that originally threatened to ban any covering that reduced the visibility of required motor vehicle lighting. Under the amended bill, which was signed into law by Governor Mike Beebe, the coverings will be prohibited only when required lamps are in use. Removable ornamental lamp covers are often used for shows, exhibitions and street use during daylight hours.

California Specially Constructed Vehicles: The California Air Resources Board (CARB) concluded an engine certification process applicable to specially constructed vehicles (SCV). SEMA coordinated with the Bureau of Automotive Repair (BAR) to ensure that CARB-certified parts will be accepted at all BAR smog referee stations during routine inspection of SCVs as long as they were certified for the same engine family as the engine installed.

California (Madera County) Collector Car Appreciation Day: The Board of Supervisors of the County of Madera, California, issued a proclamation declaring July 12, 2013, as Collector Car Appreciation Day in the jurisdiction.

Connecticut Antique/Rare/Special-Interest Motor Vehicles: SEMA-opposed legislation that raised the tax assessment of antique, rare and special-interest motor vehicles and placed a cap on the number of miles those vehicles could be driven died when the legislature adjourned for the year. The measure also would have required that vehicles being registered as antique, rare or special-interest motor vehicles or as modified antique motor vehicles be at least 30 years old. Currently, vehicles 20 years old or older are eligible for this status and special license plates.

Connecticut Property Taxes: SEMA-opposed legislation to eliminate a provision that allows antique, rare or special-interest motor vehicles to be assessed for taxes in the same manner as all other motor vehicles in the state died when the legislature adjourned.

Connecticut License Plates: With opposition from SEMA, legislation that threatened to disallow the use of year-of-manufacture license plates after July 1, 2013, was amended in committee to continue to allow use of the plates.

Florida Ethanol: A bill to repeal the requirement that all gasoline offered for sale in the state contain a percentage of ethanol was signed into law by Governor Rick Scott. Previously, the Florida Renewable Fuels Standard required that all gasoline sold or offered for sale by a terminal supplier, importer, blender or wholesaler contain 9% to 10% ethanol or other alternative fuel, by volume.

Florida Tires: SEMA-opposed legislation to require tire retailers to provide a written disclosure on a used tire’s age died when the legislature adjourned for the year. The bill also required the disclosure to include a statement on tire aging explaining that tire age can contribute to crashes and that tires should be replaced every six years. Tire manufacturers that sell products in the United States comply with the strictest government tire safety testing standards in the world. The National Highway Traffic Safety Administration (NHTSA) has been studying tire aging for years and has yet to conclude that any regulatory action is needed.

Idaho Registration Fees: SEMA-opposed legislation that would have increased annual registration fees for motor vehicles weighing 8,000 lbs. or less died when the legislature adjourned for the year. The fee increase would have varied depending on the age of the vehicle, with newer cars paying the most.

Louisiana (Washington Parish) Collector Car Appreciation Day: Washington Parish, Louisiana President Richard N. Thomas issued a proclamation declaring July 12, 2013, Collector Car Appreciation Day in the jurisdiction.

Maine Suspension Modifications: SEMA successfully opposed legislation that would have required the state police to authorize a person to modify a vehicle when lifting its suspension. Under the measure, the owner of a motor vehicle with a lifted suspension would have been required to obtain a certificate from the police and present it to an inspection mechanic at the time of inspection. SEMA argued that Maine already has established lift limits and that the bill gave no sense of the criteria that law enforcement would establish to qualify installers to perform these modifications.

Maine Ethanol: SEMA-supported legislation to prohibit the sale and distribution of corn-based ethanol in Maine was signed into law by Governor Paul LePage. Under the new law, 10 other states or a number of states with a collective population of 30,000,000 would have to enact a similar prohibition before it could go into effect. A bill to prohibit the sale of gasoline that contains corn-based ethanol as an additive at a level greater than 10% by volume was also signed into law. This law would not take effect until at least two other New England states have enacted laws that prohibit the sale of gasoline that contains corn-based ethanol at a level greater than 10% by volume.

Maryland Reproduction Plates: SEMA-supported legislation to require the motor-vehicle administration to provide, for one year, a specially designed vintage reproduction registration plate to qualifying vehicle owners was signed into law by Governor Martin O’Malley.

Michigan “Automotive Heritage Month”:The Michigan State Senate issued a resolution commemorating August 2013 as Automotive Heritage Month in the state.

Missouri Miles Traveled: A SEMA-opposed resolution to impose a vehicle-miles-traveled tax on state motorists died without consideration when the legislature adjourned for the year. Had it been approved, the proposed amendment to the state constitution would have gone on a statewide ballot for a popular vote of the citizens.

Montana Year-of-Manufacture Plates: SEMA-supported legislation to allow the owner of a motor vehicle, trailer, semitrailer or pole trailer manufactured in the year 1948, 1949 or 1950 to display a single original Montana license plate affixed to the rear of the vehicle was signed into law by Governor Steve Bullock.

Montana Inoperable Vehicles: As a result of opposition spearheaded by SEMA, legislation to limit the number of inoperable motor vehicles allowed on private property under “community decay” laws was withdrawn from consideration. Under the bill, four or more “junk vehicles” on private property would have constituted “community decay.” The bill provided no accommodation to vehicle restorers and allowed municipalities alone to determine if the vehicles created “community decay.”

Nevada Inoperable Vehicles: Nevada Governor Brian Sandoval signed into law SEMA-amended legislation that originally threatened to add abandoned, unregistered, inoperable or junk motor vehicles to the list of items that constitute a public nuisance. Under existing law, counties and cities may remove a public nuisance at the property owner’s expense if, after notice, the property owner does not remove the nuisance. Under the SEMA amendment, abandoned, inoperable or junk vehicles stored on private property would require only screening from public view in counties having populations of 700,000 or more people. Unregistered vehicles could not be declared a nuisance under the SEMA amendment.

Nevada (Las Vegas) Collector Car Appreciation Day: Las Vegas Mayor Carolyn G. Goodman and the Las Vegas City Council issued a proclamation declaring July 10, 2013, Collector Car Appreciation Day in the city.

New Mexico Collector Car Appreciation Day: New Mexico Governor Susana Martinez issued a proclamation designating July 12, 2013, as Collector Car Appreciation Day in the state.

New York Collector Car Appreciation Day: The New York State Assembly issued a resolution authorizing Governor Andrew Cuomo to proclaim July 13, 2013, as Collector Car Appreciation Day in the state.

North Carolina Titles: Legislation to provide for the prompt issuance of titles to owners of out-of-state motor vehicles that are 35 years old or older was signed into law by Governor Pat McCrory. Under the SEMA-supported new law, if a required inspection and verification is not conducted by the division of motor vehicles within 15 days after receiving a request and the inspector has no probable cause to believe that the ownership documents or vehicle identification number does not match the vehicle being examined, the vehicle will be deemed to have satisfied all requirements and the title will be issued to the owner within 15 days. If an inspection and verification is performed in a timely manner and the vehicle passes, title will be issued to the owner within 15 days of the date of the inspection. The new law became effective on July 23.

North Carolina Headlamps: SEMA-opposed legislation that would have imposed a $100 fine on any person who equipped a car with headlamps that “change the original design” died when the legislature adjourned for the year. The bill directly conflicted with the National Traffic and Motor Vehicle Safety Act, which makes clear that the standards adopted by the agency for required motor vehicle equipment (including headlamps) are to be performance standards, not design standards.

South Carolina Registration Fees: SEMA-opposed legislation to increase biennial registration fees for motor vehicles was not acted upon before the legislature adjourned for the year. The bill would have increased the registration fees for private passenger vehicles, excluding trucks, from $24 to $36 for persons under age 65. For persons 65 years old and older, the fees for private passenger vehicles, excluding trucks, would have risen from $20 to $32.

Texas Registration Fees: Legislation to add an additional $50 to vehicle registration and renewal fees died when the legislature adjourned for the year. The measure would have taken effect on September 1, 2013, if a constitutional amendment proposed by the legislature to allow the imposition of an additional motor-vehicle registration fee was approved by voters.

Texas Vehicle Miles Traveled: SEMA-opposed legislation to impose a vehicle-miles-traveled (VMT) tax on state motorists died when the legislature adjourned for the year. Under the bill, the amount of the VMT tax would have varied by vehicle type. Vehicles weighing 10,000 lbs. or less would have been taxed at a rate of 1 cent per mile, vehicles weighing more than 10,000 pounds at 1.25 cents per mile and electric vehicles at .75 cents per mile. The tax would have been offset by a motor fuels tax credit that would be determined using the vehicle’s VMT and fuel economy data. The actual VMT would have been measured using an annual odometer inspection.

Vermont Exhaust Systems: A bill to ban motor-vehicle exhaust systems that increase noise levels died when the legislature adjourned. Under the bill, violators would not pass the state’s required inspection and would be subject to fines. The measure did not provide an opportunity for vehicle hobbyists to install and use exhaust systems that meet an objective decibel limit under a fair and predictable test.

Virginia Restoration Projects: Legislation containing a SEMA-drafted amendment to totally exempt from the license tax all vehicles and parts cars stored on private property for the purpose of restoration or repair was signed into law by Governor Bob McDonnell. The license tax is applied to vehicles that do not display current license plates, even those 25 years old and older. Under the new law, the exemption for all cars, regardless of age, that are undergoing restoration represents a new benefit to car owners. Vehicles stored within a structure remain exempt from the tax.

Virginia (York County) Collector Car Appreciation Day: The Board of Supervisors of the County of York, Virginia, issued a proclamation declaring July 13, 2013, as Collector Car Appreciation Day in the jurisdiction.

West Virginia Antique/Classic Taxes: SEMA-opposed legislation to increase property taxes paid by owners of antique motor vehicles died when the legislature adjourned for the year. Under the bill, each of the cars would have been assessed at $5,000 for purposes of the tax, which would have penalized antique-vehicle owners whose cars are worth less than $5,000.

West Virginia Off-Road Vehicles: Legislation to approve a regulation allowing off-road vehicles to operate on trails included in the Hatfield-McCoy Recreation Area was signed into law by Governor Earl Ray Tomblin. The trails were previously restricted to all-terrain vehicles, utility-terrain vehicles and motorcycles.

Wyoming Registration Fees: SEMA-opposed legislation to increase annual vehicle registration fees by $10 for passenger vehicles and double registration fees for non-commercial trucks died. Under the bill, non-commercial trucks subject to the doubled registration fees would have included personal pickups.

Canada (Nova Scotia) Collector Car Appreciation Day: Nova Scotia Premier Darrell E. Dexter issued a proclamation designating July 2013 as “Automotive Heritage Month” in the province.

Canada (Manitoba) Collector Car Appreciation Day: The Manitoba Minister of Culture, Heritage and Tourism issued a proclamation designating July 12, 2013, as Collector Car Appreciation Day in the province. The minister also proclaimed the month of July 2013 to be Collector Car Appreciation Month.

FEDERAL UPDATE

Collector Car Appreciation Day: At SEMA’s request, U.S. Senators Jon Tester (D-MT) and Richard Burr (R-NC) co-sponsored Senate Resolution 176 designating July 12, 2013, as Collector Car Appreciation Day. It was the fourth commemoration in what has become an annual event to raise awareness of the vital role automotive restoration and collection plays in American society. SEMA-member companies, car clubs and individuals helped organize scores of events to celebrate the day, including car shows, small-business open houses and “drive your car to work” displays. Next year’s event is scheduled for July 11, 2014.

New Health Care Law: SEMA has created a webpage (www.sema.org/healthcare) with information to help members understand the “Affordable Care Act.” The so-called “Obamacare” requires employers with 50 or more full-time workers to offer health care insurance or be subject to a $2,000 fine per employee. The “play or pay” mandate takes effect on January 1, 2014, but will not be enforced until 2015 to give the business community more time to understand and comply with the law. The decision does not affect small employers with fewer than 50 workers, since they are not required to offer insurance. All employers were required to provide written notice of available health care coverage options to their current employees by October 2013 and future workers going forward, regardless of company size or whether the company offers health care coverage.

Tax Code: Key lawmakers in both the Senate and House intend to start with a blank slate as they draft legislation to reform the federal tax code. Through this approach, all deductions and credits would be removed so as to reduce overall tax rates. Popular tax breaks such as the child credit, mortgage interest deduction, research and development tax credit and charitable deductions would be reinserted only if there is sufficient evidence that these provisions help grow the economy, make the tax code fairer or effectively promote important policy objectives. Lawmakers intend to draft tax overhaul legislation in 2014.

Debit Card Swipe Fees: A federal judge ruled that the Federal Reserve improperly inflated the fees banks and card companies are allowed to charge retailers when their customers swipe debit cards. The fees are currently set at 21 cents per transaction plus 1 to 3 cents more to cover fraud prevention and other adjustments. Retailers argued that the fees are too high to compensate the financial institution’s “authorization, clearance, or settlement” costs. In 2010, SEMA and 54 other trade associations asked Congress to limit the amount card companies could charge merchants when processing payments. Congress provided the Federal Reserve with the power to set fees within the Dodd-Frank law. The Federal Reserve had initially recommended a 12-cent transaction cap but then raised the fee to 21 cents. The Federal Reserve is now reconsidering its fee structure.

E15 Ethanol: The U.S. Supreme Court rejected petitions to reconsider a lower court ruling allowing the sale of 15% ethanol in gasoline (E15). The U.S. Environmental Protection Agency (EPA) approved E15 for use in ’01 and newer vehicles while making it illegal to fuel older cars, motorcycles and other motorized equipment based on evidence that it could cause damage to those vehicles and engines. However, the EPA is requiring only a gas pump warning label instructing consumers that it is “illegal” to fill-up those products with E15. Ethanol can cause metal corrosion and dissolve certain plastics and rubbers, especially in older cars that were not constructed with ethanol-resistant materials. Attention has now turned to Congress to address the issue. A U.S. House Energy and Commerce Subcommittee held a series of hearings on whether the Renewable Fuel Standard (RFS) should be repealed or scaled-back. The RFS mandates that an increasing amount of biofuels be blended into gasoline each year, from 9 billion gallons in 2008 to 36 billion gallons by 2022, and E15 is the mechanism to achieve these mandates. Key committee leaders have stated a full repeal of the RFS is unlikely when legislation is introduced, but reform is a viable option. SEMA supports reducing the RFS mandates and banning the sale of E15.

Johnson Valley OHV Recreation Area: The U.S. House of Representatives approved the 2014 National Defense Authorization Act (NDAA), including a provision that would end a five-year debate on how to expand the U.S. Marine Corps base at Twentynine Palms, California. Authored by Rep. Paul Cook (R-CA), the provision allows the Marines to have access to the adjoining Johnson Valley Off-Highway Vehicle (OHV) Recreation Area for up to 60 days a year for training exercises, but the area would be otherwise preserved for recreational use. The land will continue to be controlled by the U.S. Bureau of Land Management (BLM). Johnson Valley is the largest OHV area in the US, totaling nearly 189,000 acres. The land is used year-round by OHV enthusiasts and is home to numerous motorized events that draw thousands of competitors and spectators to the area every year, including the famous “King of the Hammers.” SEMA is urging Senators to approve the Johnson Valley provision when the Senate considers its version of the bill in the fall. Final passage of the NDAA is expected late this year.

Bonneville Salt Flats: SEMA has joined with the Save the Salt Foundation and a number of other organizations and companies to pursue a fundraising campaign to help save the Bonneville Salt Flats. Monies contributed will be used to replenish the salt flats beyond the current salt-brine pumping program that resulted in 600,000 tons of salt being restored to the Salt Flats in 2013. The racing community is pursuing a test dry salt laydown project in 2014 to confirm that this would be a viable method for eventually restoring and expanding the international track. The BLM is being asked to approve the project and also undertake similar activities.

OHV Access to Cape Hatteras National Seashore: SEMA is supporting legislation that would reverse a 2012 management plan issued by the National Park Service banning OHV access to large portions of the seashore. Under the current restrictions, about 39% of the seashore is closed to OHV recreation, while 42% of the seashore is open year-round and 19% is open at different times during the year. The House bill would reinstate a previous management strategy that better balances wildlife protections with responsible OHV access. It is pending before the House Judiciary Committee. The Senate Energy and Natural Resources Committee passed a bill seeking a one-year study to determine how wildlife buffer restrictions can be reduced to allow for expanded OHV recreation.

National Monuments and Road Closures: SEMA-supported legislation has been introduced in the U.S. Congress to require the president to complete an environmental review before designating more than 5,000 acres as a national monument. The bill would ensure public involvement in the process and discussion of multiple factors, including economic impact. Current law provides the president with authority to declare land of “historic or scientific interest” to be a national monument, which can lead to road closures for motorized recreation, among other activities. President Obama is under pressure to establish a 1.4-million-acre “Greater Canyonlands National Monument” in Utah, close 1,050 miles of off-road vehicle trails and monitoring another 1,450 miles for future closure.

Driver Distraction: The NHTSA issued guidelines intended to limit the risk of driver distraction from in-vehicle electronic devices that are not directly applicable to driving a car. These voluntary guidelines do not have the effect of law and would apply to original equipment installed in new light-duty vehicles. The electronic devices covered include “information, navigation, communications and entertainment” products that require drivers to take their eyes off the road and hands off the wheel. Certain functions, such as inputting an address into a navigation system, text messaging, dialing a phone number or browsing the Internet, would be disabled until the vehicle is in park. In the future, the NHTSA intends to issue a second guidance document for aftermarket products, such as smartphones and electronic tablets.

Tire-Pressure Monitoring Systems (TPMS): The NHTSA issued survey results on TPMS effectiveness based on model year ’04–’07 vehicles. The survey found that 23.1% of the vehicles without TPMS had at least one severely underinflated tire (25% or more below the recommended cold tire pressure). Only 11.8% of TPMS-equipped vehicles had an underinflated tire. The percentage dropped even further to just 5.7% for a sampling of model-year ’08–’11 vehicles. The NHTSA also estimates that its TPMS rule saved $511 million in 2011 in reduced fuel consumption as a result of more properly inflated tires.

Aftermarket Head Restraints: The NHTSA issued a reminder that head restraints are regulated under Federal Motor Vehicle Safety Standard No. 202a. Aftermarket head restraints that are outfitted with audio and video components must comply with the standard when installed.

EPA Tier 3 Standards: The EPA has proposed tougher tailpipe and evaporative emission standards, known as “Tier 3,” to take effect in 2017. Reduced tailpipe emission standards for particulate matter, non-methane organic gases and nitrogen oxides would be phased in between 2017 and 2025, and the useful-life period would be raised from 120,000 miles to 150,000 miles. The evaporative emissions standards would also be reduced by nearly 50% from current standards, and the useful life period would be raised to 150,000 miles. The EPA would adopt California’s Onboard Diagnostic System requirements. Tier 3 would lower the sulfur content in gasoline by nearly two-thirds. California has already adopted this approach as of 2017, and the automakers are relying on the fuel to run lean-burn gasoline-direct-injection engines and allow the vehicle’s catalytic converter to work more efficiently.

“Employee Rights” Poster: A federal appeals court struck down a rule issued by the National Labor Relations Board instructing employers to display an 11x17-in. poster informing workers of their right to unionize and bargain collectively. The poster requirement was originally scheduled to take effect in 2011 but was placed on hold by a lower court. The rule is widely opposed by business groups, including SEMA, over concerns that it unfairly promotes unionization.

“Comp Time” Bill: The U.S. House of Representatives passed a bill to allow private-sector employees who work more than 40 hours a week the choice of taking “comp” time rather than pay. The SEMA-supported legislation is intended to provide flexibility in the workplace. However, no action is anticipated in the Democrat-controlled Senate, based on concerns that workers could be coerced into taking time off rather than pay. Under the Fair Labor Standards Act, hourly employees must be paid time and a half after 40 hours of work. Many public sector employees already have the right to earn comp time instead of pay.

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