LEGISLATIVE AND TECHNICAL AFFAIRS
Louisiana—Military Surplus Vehicles: Governor John Bel Edwards signed into law a bill allowing military surplus motor vehicles to be registered and operated in the state. There was no such allowance under previous law.
California—Privacy: Governor Jerry Brown signed into law a bill that enhances online privacy protections for consumers. The California Consumer Privacy Act of 2018 replaces a more sweeping ballot initiative that was set to be introduced. The law takes effect January 1, 2020. The California Assembly will now have 18 months to amend the enacted law, which would not be possible had the ballot initiative been approved by voters in November. Among other provisions, the law provides consumers with the right to know data that is being collected by businesses and the right to opt out of such collection. It also provides California’s attorney general with the right to sue to enforce the law.
Michigan—Environmental Regulatory Process: Governor Rick Snyder signed into law a bill to create a more cooperative environmental regulatory process at the Michigan Department of Environmental Quality. The law establishes an Environmental Rules Review Committee, which will evaluate proposed environmental rules and advise on whether to advance them. Affected industries represented include statewide environmental and conservation groups, local governments, the general public, public utilities, and small business, manufacturing, solid waste, oil and gas and agriculture groups. In addition, the new law establishes an Environmental Permit Review Commission and creates an Environmental Science Board to advise on issues affecting the protection of the environment or management of the state’s natural resources.
Rhode Island—Courtesy License Plates: Governor Gina Raimondo signed into law legislation allowing for the issuance of courtesy registration plates to vehicles more than 25 years old. The state already allowed antique plates for vehicles that are at least 25 years old and used only for exhibitions, parades and car club activities. Vehicles currently registered as antique may now purchase and display replica year-of-manufacture plates with Division of Motor Vehicle approval. The legislation also allows a courtesy plate for street rods and custom vehicles. Street rods are ’48 or older vehicles or a vehicle manufactured before ’49 to resemble a vehicle from that era. Custom vehicles are vehicles at least 25 or more years old and of a model year after ’48 or a newer vehicle built to resemble a custom car.
Provinces of Saskatchewan, Manitoba and New Brunswick—Automotive Heritage Month: The provinces of Saskatchewan, Manitoba and New Brunswick declared July as Automotive Heritage Month. Manitoba also proclaimed July 13, 2018, as Collector Car Appreciation Day. Since 2010, Congress has passed SEMA-sponsored resolutions 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 took place on Friday, July 13.
South Carolina—Motorsports Facilities: Governor Henry McMaster signed into law a bill aiding and incentivizing the construction of motorsports complexes. It should help pave the way for new racing facilities in the state. A motorsports tourism incentive fund will be created to award grants or loans to attract and expand tourism and hospitality projects related to events at such complexes. The new law exempts certain building materials for a complex from the sales tax and provides a process by which a qualified company may claim the exemption.
Auto Part Tariffs: SEMA is working with other industry associations to oppose potential tariffs of up to 25% on imported automobiles and auto parts. President Trump directed the U.S. Department of Commerce to investigate whether such products pose a threat to America’s national security. The Department of Commerce will issue findings and recommendations for presidential actions, if any. The tariffs could apply 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.
Chinese Tariffs: The Office of the U.S. Trade Representative has established procedures for requesting an exclusion from tariffs being imposed on certain products from China. The request applies only to products on the Round 1 tariff list that were imposed on July 6 and cover $34 billion worth of goods at a 25% tariff rate. The proposed Round 2 tariffs covering $16 billion of goods at a 25% duty rate and Round 3 tariffs covering $200 billion worth of goods at 25% tariffs have not yet been finalized. They could be imposed as early as this fall if negotiations are unsuccessful to lower the U.S./China trade deficit and to deter cyber theft of intellectual property by Chinese government and companies.
The Round 1 product list covers 818 types of metal and rubber parts for auto equipment, machinery, tools, measurement and medical devices. The proposed Round 2 list covers 284 tariff categories, including many types of plastics. The proposed Round 3 list covers hundreds of consumer products, from fish to furniture and apparel. It includes many auto parts, from engines and metal fasteners to wheels, tires, steering wheel components, rubber gaskets, transmission belts, brake pads, windshields and suspension springs. SEMA has joined with many other associations in opposing the tariffs, which have the potential to impose significant harm on U.S. businesses and consumers.
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 Department of Commerce 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.