Law and Order

SEMA News—May 2013

LEGISLATIVE AND TECHNICAL AFFAIRS
By Steve McDonald

Law and Order

STATE UPDATE

Colorado Emissions:

Legislation to extend the emissions-inspection exemption to vehicles that have not yet reached their 10th model year was denied approval by the Colorado Senate Transportation Committee on a three-to-one vote. Current law exempts only vehicles that are four model years old or newer.

The bill would have also exempted previously registered motor vehicles that have never failed an emissions-control inspection and created a senior-citizen hardship exemption whereby a senior citizen could register one motor vehicle without obtaining an emissions inspection.

 

Connecticut Antique Vehicles:

Legislation to increase the age requirement for vehicles eligible for registration as “antique, rare or special-interest motor vehicles” or “modified antique motor vehicles” will be considered in Connecticut. Legislation to increase the age requirement for vehicles eligible for registration as “antique, rare or special-interest motor vehicles” or “modified antique motor vehicles” will be considered in Connecticut. Under the SEMA-opposed bill, vehicles to be registered as antique, rare or special-interest motor vehicles or as modified antique motor vehicles would be required to be at least 30 years old. Currently, vehicles 20 years old or older are eligible for this status and special license plates. For the purpose of property taxes, the bill also increases the maximum assessment of these vehicles from $500 to $2,500.

     

Connecticut License Plates:

Legislation to disallow the use of year-of-manufacture license plates after July 1, 2013, has been introduced in the Connecticut House. Under the bill, the owner of an antique, rare or special-interest motor vehicle who was authorized before July 1, 2013, to display a year-of-manufacture plate could continue to display the plate until the registration period expires. However, upon renewal of registration, the owner would be required display a current registration plate. The bill would totally outlaw use of all year-of-manufacture plates after June 30, 2015

 

Florida Ethanol:

SEMA is supporting Florida legislation to repeal the requirement that all gasoline offered for sale in the state contain a percentage of ethanol. Currently, the Florida Renewable Fuels Standard requires that all gasoline sold or offered for sale by a terminal supplier, importer, blender or wholesaler in Florida contain 9% to 10% by volume of ethanol or other alternative fuel. The bill recognizes that, while the current ethanol mandate does not apply to fuel used in collector vehicles, off-road vehicles, motorcycles or small engines, there has been an inability to obtain unblended gasoline for engines that may be damaged by ethanol.

     

Hawaii Antique Vehicles:

Legislation has been introduced in Hawaii to reduce annual registration fees and state vehicle weight tax for antique motor vehicles. Under the bill, the registration fee would be reduced from $45 to $25 each year, and the weight tax would be reduced from 1.75 cents per pound to 1 cent per pound. In Hawaii, an “antique motor vehicle” means any motor vehicle, including a motorcycle or a motor scooter, that produces not more than 12 hp, is 35 years or more from the date of manufacture, is of the original factory specification or restored to the original specifications in an unaltered or unreconstructed condition and is operated or moved over the highway primarily for the purpose of historical exhibition or other similar purposes.

 

Montana Year-of-Manufacture Plates:

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 that is affixed to the rear of the vehicle was approved by the House of Representatives.

Under the bill, the original Montana license plate must be legible and must bear the year that matches the year in which the vehicle was manufactured. The Montana Senate will next consider the bill.

     

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.” SEMA believes that clear legal distinctions must be drawn between an owner using private property as a dumping ground and a vehicle enthusiast working to maintain, restore or construct a vehicle. SEMA supports legislation that permits the outdoor storage of motor vehicles if they are located away from public view or are screened by a fence, trees, shrubbery, opaque covering or other appropriate means. This bill provided no such accommodation to vehicle restorers and allowed municipalities alone to determine if these vehicles created “community decay.”

 

A federal appeals court dismissed on technicalities a lawsuit that challenged the Environmental Protection Agency’s (EPA) authority to permit the sale of 15% ethanol (E15) content in gasoline for ’01 and newer model-year cars and light trucks. Oregon Ethanol:

SEMA is supporting legislation in Oregon to repeal the requirement that retail dealers, nonretail dealers or wholesale dealers of gasoline sell only gasoline blended with a specified percentage of ethanol.

The state currently requires that gasoline sold or offered for sale contain 10% ethanol by volume.

     

Texas Vehicle Miles Traveled:

SEMA is opposing legislation in Texas to impose a vehicle miles traveled (VMT) tax on state motorists. Under the bill, the amount of the VMT tax would vary by vehicle type. Vehicles weighing 10,000 lbs. or less would be taxed at a rate of
1 cent per mile, vehicles weighing more than 10,000 lbs. at 1.25 cents per mile and electric vehicles at .75 cents per mile. The tax would be offset by a motor fuels tax credit, which would be determined using the vehicle’s VMT and fuel-economy data such that, as fuel economy goes up, the credit decreases to ensure vehicles paying less in fuel taxes get a smaller credit and pay a greater VMT tax. The actual VMT would be measured using an annual odometer inspection.

 

Virginia Restoration Projects:

A federal appeals court dismissed on technicalities a lawsuit that challenged the Environmental Protection Agency’s (EPA) authority to permit the sale of 15% ethanol (E15) content in gasoline for ’01 and newer model-year cars and light trucks. Legislation containing a SEMA amendment to totally exempt from the license tax vehicles and parts cars stored on private property for the purpose of restoration or repair was approved by the Virginia State Legislature and sent to the governor for his signature and enactment into law. The license tax is applied to vehicles that do not display current license plates. Under the bill, vehicles stored within a structure would remain exempt from the tax.

     

West Virginia Property Tax:

Legislation has been introduced in West Virginia to exempt motor vehicles older than 25 years from personal property taxes, including automobiles, motorcycles, airplanes, trucks and tractors.

Under the bill, these automobiles and motorcycles would need to display valid current antique licenses and could not be used for daily transportation. Under West Virginia law, an “antique motor vehicle” means any motor vehicle that is more than 25 years old and is owned solely as a collector’s item.

“Antique motorcycle” means any motorcycle that is more than 25 years old and is owned solely as a collector’s item.

 

West Virginia Ethanol:

West Virginia has introduced a concurrent resolution urging the Environmental Protection Agency (EPA) to revoke its decision to allow the sale of gasoline with 15% ethanol (E15) until there is clear and convincing scientific evidence that E15 does not pose a risk to any gasoline-powered vehicle or equipment. The resolution recognizes that ethanol increases water formation, which can then corrode metals, plastics and rubber, especially over a period of time when the vehicle is not used. Current high-performance specialty parts along with pre-’01 cars and parts may be most susceptible to corrosion. The state estimates that approximately 517,000 motor vehicles currently in West Virginia are from the pre-’01 era. The resolution also warns that the life span of these vehicles and equipment can be dramatically reduced with the wrong fuel, and owners could be confronted with breakdowns. Anti-corrosion additives are available for each purchase of gasoline but can become expensive, burdensome and require consumer education.

     

FEDERAL UPDATE

   
     

E15 Gasoline:

SEMA is supporting legislation in the U.S. House and Senate to ban the sale of E15 gasoline. The bill would overturn actions taken by the EPA to permit ethanol levels to rise from 10% (E10) to 15% (E15). Ethanol absorbs water, which can then corrode metals, plastics and rubber. The EPA is allowing use of E15 in ’01 and newer vehicles but made it “illegal” to fuel pre-’01 vehicles. The agency is requiring only a gas-pump warning label to alert motorists that E15 could potentially cause equipment failure in the older vehicles. The House bill would require the National Academies to conduct a scientific assessment on how increased amounts of ethanol may impact gas-powered engine systems. The analysis would consider a variety of issues, including tailpipe and evaporative emissions, impact on onboard diagnostics systems, materials compatibility and fuel efficiency. Unless the legislation is enacted into law, E15 may soon appear at a gas station near you.

 

Tax Reform:

Congress has taken the first steps toward enacting comprehensive tax reform legislation designed to simplify the tax code, close loopholes and lower business tax rates. Leaders of the House Ways and Means Committee formed 11 separate “tax reform working groups” within the Committee’s membership. The bipartisan groups are focusing on specific areas, including manufacturing, energy, income and tax distribution and small business/pass-throughs. They will also obtain input from stakeholders, academics, practitioners, the general public and other members of Congress. When work is completed, the Joint Committee on Taxation will deliver a report to the Ways and Means Committee. While these initial steps are promising for a larger, comprehensive tax-reform legislative package, the process is only beginning and includes many unknowns. SEMA will remain engaged in these efforts toward a simpler tax code and provide updates as reform efforts continue.

Small-Business Growth:

The economic climate for America’s small businesses continues to improve despite lingering challenges from the 2008–2009 recession, according to a new report issued by the U.S. Small Business Administration’s Office of Advocacy. The “Small Business Economy” report provides detailed information on expanding production and profits and declining unemployment and bankruptcies. Small businesses represent half of the private-sector output since the peak of the recession in 2009. Manufacturing sales, which dropped between 2005–2009, were up 11.2% in 2009–2010 and 11.7% in 2010–2011.

 

Scrap Tires:

The EPA will now permit tire factory scraps and blemished tires (off-specification tires) to be burned as fuel rather than treated as solid waste.

The action clarifies a 2011 rule governing tire-derived fuel that already permits whole and shredded scrap tires that are free of metal to be burned as non-waste fuel, at the user’s discretion. Tires collected through public recycling programs may also be processed as fuel.

     

LED Stop Lamps:

(NHTSA) has analyzed real-world crash data to determine if LED stop lamps and center high-mounted stop lamps are more beneficial than incandescent lamps at preventing rear-impact collisions.The National Highway Traffic Safety Administration (NHTSA) has analyzed real-world crash data to determine if LED stop lamps and center high-mounted stop lamps are more beneficial than incandescent lamps at preventing rear-impact collisions.

The data was inconclusive when considering other factors, such as vehicle redesign and a change to the rear-lighting configuration. The NHTSA will continue to review future crash data in case it provides more guidance on whether there is a measurable difference.

 

Home Office Deduction:

The Internal Revenue Service has announced a simplified option for deducting the costs associated with having a home business office. The new optional approach is based on the amount of square feet being used for business purposes by the taxpayer. If it is 300 sq. ft. or less, the taxpayer can claim a deduction of $5 per square foot (up to $1,500 per year). The existing approach is to fill out Form 8829, which may require complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Under the new option, taxpayers can still claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A, but they cannot depreciate the portion of the home used for business. These deductions need not be allocated between personal and business use, as is required under the regular method. Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business, still apply under the new option, which is available starting with the 2013 tax return.

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