Law and Order

SEMA News—May 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

Hawaii Ethanol: Legislation was introduced in the Hawaii Senate to remove the requirement that gasoline offered for sale in the state contain a percentage of ethanol. The state currently requires that gasoline sold in the state for use in motor vehicles contain 10% ethanol by volume. The bill recognizes that the requirement of blending ethanol into Hawaii’s gasoline does not produce any economic benefit for the state and that the import of ethanol creates an economic burden for state residents.

Iowa Customs: A version of SEMA-model legislation was introduced to add a vehicle registration classification for custom vehicles. The bill defines “custom vehicle” as a vehicle with a model year that is at least 25 years old and that was manufactured after 1948, or any vehicle designed and manufactured to resemble a vehicle with a model year that is at least 25 years old and that was manufactured after 1948. In 2008, Iowa enacted into law SEMA-model legislation to create classifications for street rods and replicas. The bill provides that the model year of a custom vehicle would be the same as the model year of the motor vehicle that it is designed to resemble and exempts custom vehicles are exempt from periodic vehicle inspections and emissions requirements.

Kentucky Property Taxes: A bill to put in place a new valuation procedure for older vehicles. Under the bill, vehicles 20 years old or older would no longer be presumed to be in “original factory” or “classic” condition. Original factory and classic vehicles are currently assessed as high-value collectibles. This measure instead provides three options for assessing the value of these vehicles.

Minnesota VMT: Legislation has been introduced to prohibit the use of state resources to fund a program to tax owners based on vehicle mileage. These bills counter legislation introduced earlier this year requiring the Department of Transportation to take steps to implement a vehicle mileage user fee in the state.

Missouri Single Plate: Legislation is being considered by a House committee to allow motor vehicle owners to petition the director of revenue for approval to fasten a license plate only on the rear of the vehicle. The measure requires vehicle owners to claim that fastening a license plate on the front of the vehicle will cause destruction to the vehicle or an undue hardship on the owner. Separate legislation would require the issuance of only a single license plate without a petition to the state.

Legislation to include trucks more than 25 years old (regardless of weight) in the definition of eligible “antique motor vehicles” was approved by the House Transportation Committee and has been sent to the full House for a vote by all members. The bill provides the option for older trucks to take advantage of the many accommodations available to antique motor vehicles. New Hampshire Antique Trucks: Legislation to include trucks more than 25 years old (regardless of weight) in the definition of eligible “antique motor vehicles” was approved by the House Transportation Committee and has been sent to the full House for a vote by all members. The bill provides the option for older trucks to take advantage of the many accommodations available to antique motor vehicles.

New Hampshire Emissions: Legislation was introduced to exempt vehicles 10 or more model years old from emissions-test requirements. Under current law, only vehicles 20 or more years old are exempt. The bill would also exempt a vehicle for an indication of failure if the owner verifies that he or she has spent $100 or more unsuccessfully attempting to repair the cause of the failure and the vehicle passes all other inspection requirements. Separate legislation was also introduced to exempt rare or historically significant vehicles, as determined by the state, from emissions-control requirements.

New Mexico Replica Cars: A version of SEMA-model legislation has been introduced to ease the process by which replica cars are titled and registered. The bill defines “replica car” as a motor vehicle that is assembled from a prefabricated chassis and body kit purchased from a replica-car manufacturer and provides that the model year is the year of manufacture of the model or brand that a replica car most resembles in outward appearance. The bill also provides that a replica car is exempt from a state or local law or ordinance requiring periodic vehicle or vehicle emissions inspections and testing.

New York Historic: Legislation has been reintroduced to provide that historical-vehicle owners pay only a one-time registration fee of $100 upon initial registration. The reduced registration fee would be available to owners of historical vehicles owned and operated as exhibition pieces or collectors’ items and used for club activities, exhibits, tours, parades, occasional transportation and similar uses. Under current New York law, a historical motor vehicle is either a vehicle manufactured more than 25 years ago or one that has unique characteristics and that is determined to be of historical, classic or exhibition value. The $100 one-time fee would replace the current annual fee of $28.75.

Pennsylvania Ethanol: Legislation was introduced to remove the requirement that gasoline offered for sale in the state contain a percentage of ethanol. The state currently requires that “all gasoline sold or offered for sale to ultimate consumers in this Commonwealth must contain at least 10% cellulosic ethanol by volume….” The bill recognizes that ethanol fuels cause problems with fuel pumps and fuel gauges as well as other engine performance issues, especially over a period of time when the vehicle is not used.

Tennessee Emissions: A bill was introduced to extend the emissions-inspection exemption for new cars. Under the measure, vehicles that are three years old and newer and that have an odometer reading of fewer than 36,000 miles would be excused from the emissions test. Current law exempts only new motor vehicles being registered for the first time or one year from initial registration.

Texas VMT: Legislation has been introduced to impose a vehicle miles traveled (VMT) tax on motor vehicles that travel 5,000 or more miles a year. 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. The actual VMT would be measured using an annual odometer inspection.

Vermont Exhaust: A bill has been reintroduced to ban motor vehicle exhaust systems that increase noise levels. Under the bill, violators would not pass the state’s required inspection and would be subject to fines. The bill does not provide an opportunity for vehicle hobbyists to install and use aftermarket modified exhaust systems that meet an objective decibel limit under a fair and predictable test.

Virginia Exhaust: Identical legislation was approved by the Virginia House and Senate to exempt antique motor vehicles from the requirement that they have exhaust systems of a type installed as standard factory equipment, or comparable to that designed as standard factory equipment. Both bills contain an amendment that restricts this exemption only to antique vehicles manufactured prior to 1950 containing engines comparable to that designed as standard factory equipment for use on that vehicle. The bills will now be sent to Governor Terry McAuliffe for his signature and enactment into law.

Virginia Plate/Registration: Pro-hobby legislation died when the legislature adjourned for the year, including a bill to provide for the issuance of a single license plate for motor vehicles whose original design does not provide for display of a front plate. Separate legislation to provide that vehicle registrations would be permanent unless the vehicle ownership or the address where the vehicle is principally garaged changes was tabled by the House Transportation Committee, killing it for the year.

West Virginia Property Taxes: A bill has been introduced to provide owners of all motor vehicles registered in the state with an exemption from property taxes. A second bill was also introduced to limit property taxes paid by owners of antique motor vehicles. Under the bill, any vehicle that is registered as an antique motor vehicle and that is not used for general transportation would be assigned an appraised value of $3,000 or less for purposes of property taxes. West Virginia law defines an “antique motor vehicle” to mean any motor vehicle that is more than 25 years old and is owned solely as a collector’s item. These bills are competing with a measure introduced earlier this year to assess antique motor vehicles with a value of $5,000 for purposes of the tax, regardless of their actual value.

West Virginia Collector Cars: Thanks to the efforts of Delegate Gary Howell, a West Virginia House concurrent resolution has been introduced to designate the second Friday in July as West Virginia Collector Car Appreciation Day. For the past five years, the U.S. Senate has passed a similar resolution, at SEMA’s request, to acknowledge the day’s significance in raising awareness of the vital role automotive restoration and collection plays in American society.

West Virginia Light Bars: A bill was approved by the House Roads and Transportation Committee to eliminate the requirement that roof-mounted off-road light bars be covered when vehicles are operated on roads and highways. The bill would also allow owners of vehicles to install or use aftermarket light bars without obtaining approval from the commissioner of highways. The bill has now been referred to the House Judiciary Committee. The measure still requires that light bars be turned off when vehicles are being operated on roads and highways.

Wyoming Governor Matt Mead signed into law a SEMA-drafted bill to provide for the issuance of a single license plate for motor vehicles that were “originally manufactured without an installed bracket, device or other means to display and secure a front license plate.” The new law also specifically allows antique vehicles to display a single plate and allows all custom vehicles, not just those manufactured prior to 1968, to display a single plate. The new law will take effect on July 1, 2015. Wyoming Single Plate: Wyoming Governor Matt Mead signed into law a SEMA-drafted bill to provide for the issuance of a single license plate for motor vehicles that were “originally manufactured without an installed bracket, device or other means to display and secure a front license plate.” The new law also specifically allows antique vehicles to display a single plate and allows all custom vehicles, not just those manufactured prior to 1968, to display a single plate. The new law will take effect on July 1, 2015.

FEDERAL UPDATE

Business Tax Credits: The U.S. House of Representatives passed a bill to permanently allow small businesses to write off up to $500,000 of yearly capital investments under Section 179 of the tax code. The amount is currently set at $25,000 in 2015 and future years unless Congress takes action. In a related move, the House Ways and Means Committee approved a bill to permanently renew the research-and-development tax credit, which expired at the end of 2014. The bill would increase the alternative simplified credit from 14% to 20% and provide small businesses with a credit against the alternative minimum tax. The House is expected to approve the bill. No immediate action is expected in the Senate on either bill, since the Finance Committee is focusing on comprehensive tax reform rather than individual tax credits.

Recreational Off-Highway Vehicle Rule: SEMA-supported legislation in the U.S. House of Representatives directs the National Academy of Sciences to conduct a study on the handling requirements for recreational off-highway vehicles (ROVs) proposed by the Consumer Product Safety Commission. recreational off-highway vehicles can attain speeds greater than 30 miles per hour and generally accommodate a side-by-side driver/passenger in a compartment equipped with roll bars. The legislation would postpone further action on the Consumer Product Safety Commission’s proposed rule pending the analysis. SEMA has joined with many other companies and organizations to support an alternative industry recreational off-highway vehicle standard that is very similar to the Consumer Product Safety Commission rule but that does not stifle future design innovations. The industry standard recognizes that there are a wide variety of uses and terrains for which recreational off-highway vehicles are constructed, from utility to recreation.

Transitioning to Chip-Based Credit Cards: In October 2015, the major credit-card companies will be shifting liability for fraud onto merchants that do not make the switch from payment terminals that read magnetic strips to terminals equipped with electronic chip-reading technology. SEMA-supported legislation has been introduced in the U.S. Senate and House of Representatives to curtail the president’s power to unilaterally designate national monuments. Roads and trails for motorized vehicles are frequently closed as a result of such designations. The bills would require that Congress and the impacted state legislature approve such designations. In recent years, President Obama has designated 16 national monuments covering millions of acres of land including, most recently, 21,500 acres of land in south-central Colorado as the Browns Canyon National Monument.The international standard for chip cards and chip-reading terminals is “EVM,” which stands for Europay, Visa and MasterCard, the companies that initiated the move to the chip-based payment system. Liability for credit-card fraud has traditionally been borne by the issuer, not the merchant. This liability shift to merchants has come in response to the increasing threat of identity theft and fraud. The more secure EVM system allows for immediate authentication without transmission of sensitive information outside the payment terminal.

National Monuments: SEMA-supported legislation has been introduced in the U.S. Senate and House of Representatives to curtail the president’s power to unilaterally designate national monuments. Roads and trails for motorized vehicles are frequently closed as a result of such designations. The bills would require that Congress and the impacted state legislature approve such designations. In recent years, President Obama has designated 16 national monuments covering millions of acres of land including, most recently, 21,500 acres of land in south-central Colorado as the Browns Canyon National Monument.

 

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