Law & Order

SEMA News—January 2020

LEGISLATIVE AND TECHNICAL AFFAIRS

By Stuart Gosswein

FEDERAL UPDATE

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Replica Cars: SEMA has sued the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) for failure to implement a 2015 law that permitted low-volume automakers to sell up to 325 replica cars each year. Replicas are cars that resemble production vehicles manufactured at least 25 years ago. The law provided NHTSA until December 2016 to issue any regulation needed to implement its provisions. The agency missed the deadline and has yet to issue a regulation. Alternatively, NHTSA has not pursued other options that would allow replica car manufacturers to immediately begin production, such as issuing a guidance document. Companies have not hired workers, businesses have lost money, and consumers have been denied their rights to purchase replica cars as a result of NHTSA’s inaction. SEMA has asked a federal appellate court to compel NHTSA to act.
   

Recognizing the Protection of Motorsports (RPM) Act: U.S. Senators Richard Burr (R-NC) and Joe Manchin (D-WV), along with 24 original cosponsors, reintroduced the RPM Act (S. 2602). The bipartisan bill protects Americans’ right to convert street vehicles into dedicated race cars and the motorsports parts industry’s right to sell products that enable racers to compete. The RPM Act confirms that transforming motor vehicles into race cars used exclusively for competition does not violate the Clean Air Act. This American tradition was unquestioned for 45 years until 2015, when the U.S. Environmental Protection Agency (EPA) took the position that converted street vehicles that compete on the track must remain emissions-compliant even though they are not driven on public streets or highways. The EPA also maintains that the equipment used to transform a street vehicle into a race car is prohibited. The RPM Act cleared several major legislative hurdles in the previous Congress, including passage by the U.S. House Energy and Commerce Committee. The bill also received hearings in both the House and Senate, which underscored the importance of motorsports as a great American pastime and economic stimulus in communities across the country. For more information, visit www.sema.org/rpm.

Chinese Tariffs: President Trump agreed to postpone a tariff increase from 25%–30% scheduled to take effect last October on $250 billion worth of Chinese imports in exchange for a U.S./China agreement on agriculture purchases, intellectual property, forced technology transfer, currency and financial services. The deal does not address structural reforms being sought by the United States, including specific steps China will take to enforce intellectual property protections for U.S. companies, enforcement mechanisms to ensure compliance with a final agreement, and eventual removal of the tariffs already in place on $360 billion of Chinese imports. As the U.S./China negotiations continue, the U.S. Trade Representative is still reviewing thousands of company requests to be excluded from the tariffs, frequently on the basis that China is currently a sole source for the product.

Small-Business Transparency Bill: The U.S. House of Representatives passed the “Corporate Transparency Act of 2019,” a bill that would impose new reporting requirements on small businesses in an effort to gather information about the beneficial owners of small companies and prevent bad actors from using shell companies to break the law. The bill defines a beneficial owner to mean anyone who exercises substantial control over a company, owns at least 25% of a business’ equity interests, or receives substantial economic benefits from the business (as determined by implementing regulations). SEMA opposes the bill, which would impose duplicative and problematic reporting burdens on millions of U.S. small businesses with 20 or fewer employees and $5 million or less in gross receipts or sales.

Rearview Mirrors: NHTSA is seeking public comment on whether to give automakers the option of installing camera monitoring systems in place of outside and inside rearview mirrors. The mirrors are required under Federal Motor Vehicle Safety Standard No. 111, Rear Visibility. The automakers have requested the change on the premise that new camera and visual display technology provides an equivalent level of safety. Such systems are now permitted in many countries in Europe and Asia.

STATE UPDATE

Michigan—Military Vehicles: A package of bills introduced in Michigan to allow for the titling and registration of surplus and historic military vehicles was approved by the Senate Transportation and Infrastructure Committee and awaits consideration by the full Senate. Then-Governor Rick Snyder vetoed similar legislation in 2018. Currently, surplus and historic military vehicles are unable to be titled or registered for use on Michigan highways.

North Carolina—Antique Vehicles: North Carolina Governor Roy Cooper signed into law legislation to lower the age of vehicles eligible for an antique license plate to 30 years old. Previously, only vehicles that were at least 35 years from the date of manufacture were eligible for antique tags.

Ohio—License Plates: Legislation has been introduced in Ohio to require license plates on the front and rear of all motor vehicles. The bill currently awaits consideration in the Senate Transportation, Commerce and Workforce Committee. Earlier this year, the Ohio legislature passed legislation removing the front plate requirement beginning July 1, 2020.

Pennsylvania—License Plates: Legislation in Pennsylvania to allow the sale of limited-edition ’50s- and ’60s-style heritage license plates passed the House Transportation Committee and awaits consideration on the house floor. The heritage plates would be available for an additional $50 fee for all passenger cars or trucks with a gross weight of less than 14,000 lbs. as well as motorcycles and motor homes. If passed, the plates would be available to purchase for a five-year period.

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