Law and Order

LEGISLATIVE AND TECHNICAL AFFAIRS

STATE UPDATE

  Michigan

Michigan—Towing Restriction: Governor Rick Snyder signed into law a bill to allow for the attachment of a tow ball, bicycle rack, removable hitch or any other device designed to carry an object on the rear of a vehicle, even if it obstructs the rear license plate.
   

Colorado—End of Legislative Session: A bill to extend the length of the motor-vehicle emissions inspection cycle for ’82-and-newer model years from every two years to every four years died as the legislature adjourned. Emissions inspections are required for vehicles being registered or titled for the first time in Colorado and biennially based on their model year (during registration renewals). The bill failed to pass out of the Senate Committee on Transportation.

Michigan—Environmental Regulatory Process: The Senate passed legislation to create a more cooperative environmental regulatory process at the Department of Environmental Quality (DEQ). The bill would establish an Environmental Rules Review Committee to advise the DEQ on proposed environmental regulations; an Environmental Permit Review Commission with members selected by the governor; and an Environmental Science Board to advise on issues affecting the protection of the environment or management of the state’s natural resources. The bills passed the legislature and were sent to Governor Rick Snyder for approval.

Minnesota—End of Legislative Session: Several bills introduced in Minnesota in 2018 failed to be approved by the legislature prior to the adjournment of the session. However, the bills are eligible for consideration in the 2019 session. That includes a bill to allow certain decommissioned military vehicles to be registered as regular motor vehicles and not as collector military vehicles. Currently, all military vehicles must be registered as collector military vehicles. House and Senate bills to appropriate $200,000 for statewide planning and development of off-road vehicle trails also died when the bills did not receive committee consideration.

Tariffs

Auto Part Tariffs: SEMA testified before the U.S. Department of Commerce (DOC) in opposition to potential tariffs of up to 25% on imported automobiles and auto parts. President Trump directed the DOC to investigate whether such products pose a threat to America’s national security. The DOC will issue findings and recommendations for presidential actions, if any. The investigation applies to all types of cars and parts, including new cars, classic cars, OEM parts and specialty auto parts. While SEMA supports taking actions against unfair trade practices, tariffs are a blunt instrument for dealing with trade disputes and often have unexpected and unwelcome consequences. Beyond imposing a tax on trade, tariffs create downstream price spikes, hoarding, marketplace confusion and supply-chain disruption.

 
   

Rhode Island—Special Courtesy License Plates: Rhode Island currently has four pending bills that would provide courtesy plates for automotive hobbyists. Each of the bills is awaiting consideration in the House Committee on Finance.

Vermont—End of Legislative Session: A bill was introduced in the Vermont state legislature to extend the emissions inspection exemption to vehicles that have not yet reached their fourth model year. Current law does not provide for a new-vehicle exemption. The bill would have also exempted pleasure cars and exhibition vehicles from emissions inspections. While the bill failed to receive a hearing in the House Transportation Committee before the legislature adjourned, it will be eligible for consideration in the 2019 session.

Province of Newfoundland and Labrador—Automotive Heritage Month: Newfoundland and Labrador Minister Sherry Gamin Walsh has again issued a proclamation designating July as Automotive Heritage Month in the province. Since 2010, the U.S. Senate has passed resolutions at the SEMA Action Network’s request to acknowledge Collector Car Appreciation Day, which serves to raise awareness of the vital role automotive restoration and collection plays in American society. This year’s celebration was Friday, July 13. In the previous eight years, thousands of hobbyists in the United States and Canada have gathered at car cruises, parades and other events to celebrate our shared automotive heritage. For more information, visit www.semasan.com/ccad.

FEDERAL UPDATE

Chinese Tariffs: President Trump directed the U.S. government to impose 25% tariffs on $50 billion worth of Chinese imports. The SEMA-opposed tariffs are an attempt to lower the U.S./China trade deficit and to deter cybertheft of intellectual property by the Chinese government and companies. In early July, Customs began collecting duties on about $34 billion worth of products, including miscellaneous metal and rubber parts for auto equipment, machinery, tools, measurement and medical devices. A separate list of product categories valued at $16 billion had yet to be finalized. As the tariffs were going into effect, China announced that it would impose $50 billion worth of retaliatory tariffs on autos, soybeans, aircraft and other products. In response, President Trump threatened to impose 10% duties on another $200 billion worth of
Chinese goods.

Steel/Aluminum Tariffs: Between March and June, the United States began imposing global tariffs on steel (25%) and aluminum (10%) on all countries except Argentina, Australia, Brazil and South Korea, which have free-trade agreements that make them exempt. The SEMA-opposed tariffs apply to processed raw materials (steel/aluminum plate, sheets, bars, etc.) but not finished products (e.g., wheels, exhausts, etc.). At issue is excess global metal production, especially in China, that has reduced prices and resulted in the closure of many U.S. factories. A DOC investigation concluded that lower-priced foreign steel is a national security threat to domestic metal producers. Companies may seek one-year tariff exclusions if it can be demonstrated that U.S. producers don’t offer the specific type of steel or aluminum needed.

Internet Sales Tax: The U.S. Supreme Court issued a decision allowing states to require internet retailers to collect sales taxes even when they have no physical presence in the state. The Court overturned the 1992 Quill vs. North Dakota decision, which said that retailers must have a certain level of physical presence (nexus) in a state before that state can force the retailer to collect taxes. The state of South Dakota successfully argued that the 1992 decision was obsolete in the e-commerce era. In 2016, South Dakota passed legislation requiring out-of-state retailers to collect sales taxes, regardless of whether they had a physical presence. The Court upheld the South Dakota law, which includes a small-business exemption for retailers with less than $100,000 in annual sales. Other states are now expected to begin passing bills similar to the South Dakota law. The Court noted that Congress has always had the authority to enact legislation to authorize collection, but that has not occurred to date. The Court ruling may now spur Congress to establish a single federal standard, including a uniform small-business exemption and limited ability for states to pursue out-of-state audits. Various studies estimate that the potential amount of uncollected state sales taxes may range from $13–$33 billion.

E15 Gasoline: SEMA-supported legislation has been introduced in the U.S. House of Representatives that would expand the current warning label required on gas pumps dispensing E15 (gasoline containing 15% ethanol). The new label would include the words “Warning” and “Check your owner’s manual,” be 5x7 in. or larger, and include pictograms depicting a boat, lawnmower, chainsaw, motorcycle and snowmobile. The current label is about 3½x3 in. and does not include the words “warning,” “owner’s manual” or pictograms. Ethanol, especially in higher concentrations such as E15, can cause metal corrosion and dissolve certain plastics and rubbers in automobiles that were not constructed with ethanol-resistant materials. In 2011, the U.S. Environmental Protection Agency made it illegal to use E15 fuel in motor vehicles made before 2001 as well as motorcycles, boats and gasoline-powered equipment.

  Southern California OHV
   

Southern California OHV Recreation Areas: The U.S. House of Representatives passed SEMA-supported legislation from Rep. Paul Cook (R-CA) that would permanently designate six existing OHV areas comprising 300,000 acres in San Bernardino County: Johnson Valley (expanded by 11,000 acres), Spangler Hills, El Mirage, Rasor, Dumont Dunes and Stoddard Valley. While HR 857—the California Off-Road Recreation and Conservation Act—expands wilderness designations in the California desert, the bill prohibits the Secretary of the Interior from closing any roads or trails that are currently open for motorized recreational access. The U.S. House Natural Resources Committee passed SEMA-supported legislation to create the Apple Valley Off-Highway Vehicle Recreation Area. The Desert Community Lands Act would transfer 4,630 acres of federal land from the U.S. Department of the Interior to the town of Apple Valley, California, and provide the public with opportunities for OHV recreation. The bill also provides 80 acres of federal lands to the city of Twentynine Palms, California, making race events at 29 Palms Motorsports Arena more accessible to the public.

SEMA Receives Presidential Award for Export Service


Presidential AwardU.S. Secretary of Commerce Wilbur Ross presented SEMA with the President’s “E” Star Award for Export Service at a ceremony in Washington, D.C. The President’s “E” Award is the highest recognition any U.S. entity can receive for making a significant contribution to the expansion of U.S. exports. Secretary Ross honored 43 U.S. companies and organizations from across the country with the President’s “E” Award for their roles in strengthening the U.S. economy by sharing American ingenuity outside of our borders. SEMA was the only second-time winner in the export service category.

“SEMA has demonstrated a sustained commitment to export expansion,” said Secretary Ross in his congratulatory letter to the trade association. “The ‘E’ Awards committee was very impressed with SEMA’s use of partnerships to help create effective business-to-business matchmaking opportunities for its clients. The organization’s measurement of exports supported by its programs was also particularly notable. SEMA’s achievements have undoubtedly contributed to national export expansion efforts that support the U.S. economy and create American jobs.”

SEMA President and CEO Chris Kersting noted: “SEMA’s international programs have helped scores of SEMA members expand sales into overseas markets. ‘E’ Star recognition is an honor and an endorsement of services that I urge more members to utilize.”

The President’s “E” Award dates back to 1961, when President Kennedy signed an executive order reviving the World War II “E” symbol of excellence to honor and provide recognition to America’s exporters. Criteria for the award is based on four years of successive export growth and case studies that demonstrate valuable support to exporters resulting in increased exports for the company’s clients.

“SEMA greatly values its partnership with the U.S. Department of Commerce,” said Linda Spencer, SEMA senior director of international and government affairs. “For example, the International Trade Administration provides grants to companies participating in SEMA’s overseas trade missions to help defray the costs to attend. In addition, the Department of Commerce has proven to be a valuable resource to SEMA-member companies by leading delegations of overseas buyers to attend SEMA events, providing in-country briefings on key markets and offering assistance to SEMA members encountering hurdles selling overseas on issues ranging from intellectual property concerns to signing exclusive contracts.”

For more information, contact Linda Spencer at lindas@sema.org.

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