Law and Order

SEMA News—March 2015

LEGISLATIVE AND TECHNICAL AFFAIRS
By Steve McDonald

Law and Order

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

STATE UPDATE

California Greenhouse Gas Emissions: A bill to require the California Air Resources Board (CARB) to approve a greenhouse gas emissions limit by 2050 that is equivalent to 80% below the 1990 level was introduced in the California Senate. The bill would also authorize CARB to adopt interim targets to be achieved by 2030 and 2040. This measure is a follow-up to the state’s greenhouse gas law of 2006, which required CARB to adopt a statewide emissions limit to 1990 levels by 2020 and to adopt rules and regulations to achieve the maximum, technologically feasible and cost-effective greenhouse gas emissions reductions.

California Regulations: SEMA is supporting legislation introduced by newly elected Assemblymember Ling Ling Chang that calls for a system-wide evaluation of state agency regulations. The evaluation would include a measurement of the impact of regulations on job growth. Assemblymember Chang represents the Diamond Bar district in which SEMA’s headquarters is based.

Missouri Plates: Legislation has been introduced in the Missouri House of Representatives to allow a vehicle owner to petition the state for the right to display only a rear plate if the front plate will cause destruction to the vehicle or undue hardship. Under the measure, proof of approval by the director of revenue would be kept in the vehicle and available for review by law enforcement officials.

Oregon VMT: The Oregon Legislature has drafted legislation to convert the state’s current voluntary vehicle miles traveled (VMT) tax program to a mandatory program. The mandatory program would apply to all vehicles that have a rating of 55 miles per gallon or better. These high-mileage vehicles would not pay the gas tax that would apply to all other vehicles. Under the draft, if a vehicle is subject to the mandatory VMT, owners may choose to pay a flat annual fee in lieu of a fee based on actual miles driven.

SEMA ACTION NETWORKPennsylvania Emissions: Legislation to extend the emissions inspection exemption to vehicles never before registered for five years from the model year in which the vehicle was manufactured died when the legislature adjourned for 2014. Current law exempts only new vehicles that have fewer than 5,000 miles on their odometers for one year after their first registration. A bill to extend the emissions exemption for the first 10 years also died. In addition, a measure to excuse from emissions inspections vehicles registered in counties with populations of less than 116,500 residents was not considered before the legislature adjourned. The bill would have impacted only vehicle owners in Lycoming County. All other similarly populated counties are already exempt.

Texas VMT: A bill has been introduced in the Texas House of Representatives to impose a vehicle miles traveled (VMT) tax on motor vehicles that travel 5,000 or more miles a year. Vehicles bearing antique, custom, street-rod or former military vehicle license plates would not be subject to the tax under the measure. The VMT tax will be calculated by charging 1 cent per mile driven during the inspection period minus the estimated fuel taxes paid by the vehicle’s owner.

Virginia Exhaust Noise: SEMA is again supporting legislation introduced in the Virginia Senate that would allow Virginia’s antique vehicle hobbyists to install and use aftermarket exhaust systems. Currently, all vehicles are required to have exhaust systems of a type installed as standard factory equipment or comparable to that designed for use on the particular vehicle as standard factory equipment. The House of Delegates approved similar legislation last year. Under the House version, antique vehicles would be exempt from the requirement that they have exhaust systems of a type installed as standard factory equipment but would be required to be “in constant operation to prevent excessive or unusual levels of noise.”

FEDERAL UPDATE

Business Tax Credits: The U.S. Congress passed legislation to renew more than 50 tax breaks for businesses and individuals that expired at the end of 2013. While many lawmakers sought to permanently extend many of the credits and deductions, the new law simply renews the tax breaks through the end of 2014. Of particular importance to SEMA members, the new law extends the research-and-development tax credit through 2014. It also extends the IRS Section 179 provision by allowing companies to write off 100% of their capital investments placed in service during 2014 up to $500,000, with a $2 million phase-out level. Absent the renewal, the allowance would have been $25,000, with a $200,000 phase-out. The “bonus depreciation” was also extended through 2014, allowing businesses to write off 50% of capital investments in the first year with no phase-out.

Ozone Standard: The U.S. Environmental Protection Agency (EPA) wants to lower the ozone pollution standard limits to between 65 and 70 parts per billion rather than the current 75 parts per billion. The EPA contends that the stricter standard is needed to address asthma and other respiratory problems it associates with exposure to ground-level ozone, also known as smog. While there are many sources for these pollutants, stationary sources such as utilities, factories and refineries could be a primary target. If the rule is finalized, the deadlines for implementation would be staggered over many years based on whether a region is already complying with the current rule or is still struggling to meet the 1997 standard of 84 parts per billion. The EPA estimates that costs to comply with the standard by 2025 would range from $3 billion to $15 billion, with a public-health benefit of between $6.4 billion and $19 billion.

Off-Highway Vehicle (OHV) Access: The U.S. Congress passed the National Defense Authorization Act, which directs how defense monies are to be spent in 2015. Lawmakers took advantage of this legislation to include more than 60 land-use provisions not directly tied to the military. Of particular interest to SEMA members, the new law requires the National Park Service (NPS) to amend its 2012 rule restricting OHV access to the Cape Hatteras National Seashore Recreation Area. The NPS must consider extending access to seasonal routes for longer periods during the fall and spring. It also requires that wildlife protection buffers be adjusted to ensure that they don’t constitute a larger area than needed to protect endangered species and directs the NPS to construct new vehicle access points and roads. The law also designates 70,650 acres of federal land in the San Juan National Forest (La Plata County, Colorado) as the “Hermosa Creek Special Management Area.” Local and state advocates for the OHV community worked closely with lawmakers to protect continued motorized vehicle and snowmobile access within the recreation area. 

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