Tracking Trends

SEMA News—August

Greg Dooley

Tracking Trends

Some Legislative Proposals Follow
Predictable Patterns



Aftermarket Parts Laws, Aftermarket Parts Regulation, Auto Legislation, Federal Regulation Aftermarket Parts
The National Highway Traffic Safety
Administration’s Corporate Average Fuel Economy (CAFE) program,
instituted in 1975, is today being used as a tool to push new motor
vehicles to be progressively more efficient, eventually reaching an
average of 60 miles per gallon by 2025.




Among the greatest challenges of any business is the effort and skill required
to stay current or even ahead of what is popular. Predicting trends and
following their progress are key elements to success not only in business, but
also in politics. Just as businesses are subject to consumer sentiments and
economic fluctuations, timely legislative initiatives and popular regulatory
proposals can be shaped by any number of national variables and are often
broadly applicable. The following are several important legislative trends
affecting the automotive specialty-equipment industry that continue to feature
prominently in state and federal government agendas. 

Clean Vehicle Incentives

In this election year, the price of gasoline has
once again emerged as a national issue, topping the list of many voters’
concerns. In the name of emissions reduction and national security, the federal
government has introduced initiatives to increase the fuel efficiency of new
vehicles sold in the United States. The National Highway Traffic Safety
Administration’s Corporate Average Fuel Economy (CAFE) program, instituted in
1975, is today being used as a tool to push new motor vehicles to be
progressively more efficient, eventually reaching an average of 60 miles per
gallon by 2025.

Incentive programs to reduce emissions and consumer
dependency on petroleum are not unique to the federal government, however.
Legislation to reduce the sale of gas guzzlers and remove older “gross
polluters” was introduced in Rhode Island and Massachusetts. In New York,
proposed legislation would create the Clean Vehicle Incentive Program,
consisting of rebates and surcharges on the purchase of new motor vehicles based
on their emissions.

Major auto manufacturers are not waiting for these
proposals to become realities, however. As global oil production remains subject
to unpredictable fluctuations, prices at the pump remain higher than ever. As
the cost of operating a vehicle continues to require consumers to search for
more fuel-efficient options, manufacturers respond to new market demands.

Large automakers are pouring resources into
developing new technologies to increase efficiency while maintaining the
performance and quality expected by American consumers. Most of these
manufacturers are already pressing for production of vehicles that use
traditional gasoline more efficiently while also introducing new and alternative
fuel technologies. The push for increased fuel economy has already resulted in
companies moving away from the traditional mantra of “no replacement for
displacement” in favor of swap-ping V8s for turbocharged four- and six-cylinder

The trend of legislation and regulation pushing for
increased fuel economy is one that will continue to shape the new-car market and
production offerings of major manufacturers for the foreseeable future.

The Burden of Increased Government

Increased government regulation is a major point of
contention in politics today. The accumulation of requirements that must be
followed when providing goods or services to a consumer has become increasingly
burdensome. Many states create excessive and often costly roadblocks that
inhibit the timing and efficiency of a business.

In Maryland and New York, bills to further regulate
and track the manufacture and use of tires by imposing additional identification
numbers goes beyond the sufficient checks to insure quality and safety. In
Michigan, Oklahoma, South Carolina and Georgia, legislatures considered bills
that would require installers to inform consumers of the use of mechanical
aftermarket parts in the repair of their vehicles.

The time and paperwork required by these proposed
regulations burden the already complicated process of auto repair and place a
negative stigma on many parts that are often designed to be safer and more
affordable than original-manufacturer equipment.

Hobby Cars as Revenue Sources

It has been four years since the collapse of the
global economy, and the fallout from the ensuing credit crunch is still
reverberating across the country. As budget shortfalls become a perpetual
concern, states and municipalities continue to search for ways to raise revenue.

As a result of the perceived luxury status of
collector cars, registration exemptions and specialty-use provisions become easy
targets. In Virginia and Washington, legislatures attempted this year to raise
funds by modifying annual fees imposed on the registration of collector
vehicles. Additionally, in Maryland, a bill was introduced to increase the age
of vehicles that qualify for registration as historical motor vehicles, thus
decreasing the number of vehicles eligible for a reduced rate.

As all levels of government across the nation
continue to work to protect public services while operating on reduced budgets,
the exemptions classic-car hobbyists and enthusiasts enjoy will continue to come
under threat.

Registration Made Easy

One of the more favorable legislative trends this
year includes exemptions and special designations for specialty vehicles in
several states. The best of these examples are in states that adopt SEMA’s own
street rod and custom vehicle model legislation, which creates specific
registration categories for historic and specialty cars.

Both Massachusetts and Texas recently joined 20
other states by enacting versions of SEMA’s model bill. New York and New Jersey
have versions of the bill pending this year. Other favorable accommodations were
introduced in Wisconsin and Michigan to allow for the expanded use of collector

While these victories exemplify the willingness of
legislatures to work with automotive enthusiasts to expand and preserve the
rights enjoyed within the hobby, it remains important to work in all states to
ensure that these privileges
are protected.

A Beautiful Noise



Aftermarket Parts Laws, Aftermarket Parts Regulation, Auto Legislation, Federal Regulation Aftermarket Parts




It is no secret that automotive enthusiasts are often proud to display custom
aspects of their vehicles. A louder-than-stock exhaust system is often the first
aftermarket addition an enthusiast makes to his or her vehicle. However, the
appropriate decibel level a vehicle’s exhaust may produce without becoming a
nuisance is not a universally agreed-upon concept. 

Efforts to curb the freedom of consumers to choose
were reintroduced in legislatures again this year, including a Vermont bill to
ban aftermarket exhausts that produce sound levels higher than those of a stock
muffler. In New Jersey, a broadly written bill would prohibit any modified
muffler that produced unusual noise levels. In order to avoid such ambiguous
language, which can lead to improper enforcement, SEMA has crafted model
legislation that sets noise limits at 95 decibels and outlines specific
measurement guidelines proposed by the Society of Automotive Engineers (SAE).
Bills following these specific guidelines were introduced in West Virginia,
Hawaii and Iowa during this year’s legislative sessions.

Exhausts systems are not the only aftermarket parts
to be targeted by restrictive legislation recently. The Hawaii House of
Representatives moved to consider a bill to limit the size of speakers that may
be installed in vehicles. This initiative, although a first, may not prove to be
unique in the future as the sophistication of mobile audio systems improves and
the technology that allows for increased integration of mobile electronics grows
in popularity among enthusiasts.

Vehicle Miles Traveled and Big Brother



Aftermarket Parts Laws, Aftermarket Parts Regulation, Auto Legislation, Federal Regulation Aftermarket Parts




As governments, both federal and state, push to incentivize the development and
production of more fuel-efficient vehicles alongside those that use alternative
fuels altogether, they increasingly cannibalize their own sources of revenue.
The less Americans consume at the pump, the less money is contributed to budgets
by means of fuel taxes. The consequence of this predicament has not gone

Pilot programs to develop a method of charging
drivers a fee for vehicle miles traveled (VMT) has been proposed in many forms.
Global positioning satellite units similar to those used in tracking commercial
shipping trucks have been tested in private applications. This proposal has
since been met with substantial concern over privacy rights and even
constitutional violations.

In Michigan, for example, legislation was
introduced to prohibit the state from imposing a VMT tax on vehicles and would
specifically disallow any global-positioning-satellite-based toll that would
provide for the location tracking of private motor vehicles. Preemptive
legislative initiatives such as this are a telling sign that many states see the
VMT taxes as a rising issue and view it as a possible threat in the near future.

As legislative sessions across the country progress
this year, these trends are likely to become clearer. Although many of the most
prominent of these issues may never be uniformly resolved, the work to advocate
for positive and effective pro-business laws within each legislative body
remains an essential pursuit. As new issues arise and old ones are packaged in
novel ways, the need to track and understand legislative and regulatory trends
remains as important as ever.

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