SEMA News - April 2010

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

Iowa

Antiques: SEMA is supporting Iowa legislation that would allow antique-vehicle owners to register limited-use vehicles for a reduced fee. Under the measure, owners who agree to use their vehicles for hobbyist purposes and occasional transportation (not to exceed 1,000 miles annually) would be charged an annual $5 fee. All other antique-vehicle owners would be charged a standard $70 fee for a two-year registration.

Kansas

	Nuisance-abatement laws are often used by cities to force removal of inoperable vehicles, including parts cars, stored on private property by car collectors.

Inoperable Vehicles: Legislation that would allow cities to enforce “nuisance-abatement” procedures by notifying affected property owners by use of first-class mail instead of certified mail (with a return receipt) has been introduced in the Kansas Legislature. Nuisance-abatement laws are often used by cities to force removal of inoperable vehicles, including parts cars, stored on private property by car collectors. In opposing the bill, SEMA has argued that certified mail with a signed receipt provides proof that a property owner has been properly alerted to a future enforcement action.

Maryland

New-Car Emissions Exemption: SEMA is supporting legislation to exempt newer motor vehicles from the state’s mandatory emissions inspection program. Under the bill, a vehicle would be exempt from mandatory emissions test requirements for four years after the vehicle’s model year or first registration date, whichever is earlier. Maryland, like most other states, already exempts older (pre-’77 model year) motor vehicles from emissions tests.

Mississippi

Nitrous Oxide: SEMA is seeking to amend a bill that would outlaw all vehicles equipped with nitrous-oxide systems. Using an approach adopted by other states, the amended legislation would allow the system if it is disconnected (or the canisters are removed) while the vehicle is in use on public roadways.

New Jersey

Street Rods: New Jersey has reintroduced SEMA-model legislation to create a vehicle registration classification for street rods and custom vehicles and provide for special license plates for these vehicles. In the 2009 legislative session, the bill was approved by the New Jersey Senate Transportation Committee but not considered by the full Senate prior to adjournment. The bill defines a street rod as an altered vehicle manufactured before 1949 and a custom as an altered vehicle at least 25 years old and manufactured after 1948. The bill allows a kit car or replica vehicle to be assigned a certificate of title bearing the same model-year designation as the body of the vehicle it most closely resembles.

	In order to be designated as historic, a vehicle must be at least 25 years old and owned as a collector’s item.

Historic Vehicles: SEMA is again supporting legislation to allow historic vehicles to be used for pleasure driving one day per week. The bill did not receive committee consideration last session. Under current law, owners of properly registered historic motor vehicles are permitted to operate them solely for exhibition and educational purposes. In order to be designated as historic, a vehicle must be at least 25 years old and owned as a collector’s item.

Ohio

Street Rods/Custom Vehicles: SEMA-model legislation to create a vehicle registration and titling classification for street rods and custom vehicles and provide for special license plates for these vehicles is pending before the Ohio House Transportation Committee. The bill defines a street rod as an altered vehicle manufactured before 1949 and a custom as an altered vehicle at least 25 years old and manufactured after 1948. The bill allows a kit car or replica vehicle to be assigned a certificate of title bearing the same model-year designation that the body of the vehicle was constructed to resemble.

Virginia

Exhaust Noise: At SEMA’s urging, the House Transportation Committee rejected a bill to ban the sale of “any aftermarket exhaust system component” that would cause the vehicle to produce “excessive or unusual noise.” SEMA recommended that Virginia adopt reasonable noise decibel limits for modified exhaust systems that can be verified through an easy-to-administer test standard. In California, for example, a SEMA-supported provision is made for the testing of vehicle exhaust noise to a standard adopted by the Society of Automotive Engineers (SAE) to an established noise limit of 95 decibels (SAE J1169). To date, this procedure has been enacted in California, Washington state, Maine and Montana.

West Virginia

Exhaust Noise: SEMA is again opposing legislation to provide that the noise from a motor-vehicle exhaust system deemed “disturbing or unreasonably loud” constitutes disturbing the peace. The bill did not receive committee consideration in the last session before the legislature adjourned for the year.

Antiques: SEMA is again supporting legislation that would exclude owners of antique cars from the scope of vehicles required to pay any taxes or fees related to the registration or titling of these vehicles. Last session, the bill did not receive committee consideration before the legislature adjourned for the year.

FEDERAL UPDATE

Jobs Bill: Lawmakers are considering legislation to spur job growth. Although the details have yet to be finalized, there appears to be support for offering a tax credit to companies that hire new workers during 2010. President Obama suggested that businesses receive a $5,000 tax credit for each new employee to offset the 6.2% Social Security payroll tax. The Obama administration also wants to make $30 billion available for small-business loans and to extend current tax incentives that allow companies to depreciate 50% on new equipment costs in the first year.

Campaign Spending Ban:The U.S. Supreme Court rejected a long-standing ban against direct spending on political advertising by corporations and unions. The 5–4 decision overturns laws and court precedents dating back to 1907. Until this ruling, corporations and unions had been permitted to run “issue ads” on particular subjects but not allowed to directly advocate for the election or defeat of a federal candidate. The court ruled that the First Amendment protects corporations and unions the same as individuals in terms of the ability to spend money to influence campaigns. However, the ruling does not overturn existing regulations that ban direct corporate and union contributions to federal candidates and political parties. Although spending on political campaigns is sure to increase, many corporations may be cautious about pursuing direct advertising as part of their public relations strategy. Some lawmakers may also seek to reestablish limits by enacting roadblocks, such as a requirement that shareholders approve corporate spending.

Nitrogen-Dioxide Standard:
The U.S. Environmental Protection Agency (EPA) tightened the one-hour standard for measuring emissions of nitrogen dioxide (NO2) but left the annual standard unchanged. The short-term exposure limit is now 100 parts per billion rather than the previous limit of 200 parts per billion. The EPA believes that NO2 exposure has been linked to respiratory problems. The primary man-made sources for NO2 are motor vehicles, coal-burning powerplants and factories. The new standard will not have any immediate consequences. More NO2 monitors will be placed along busy roads and in large urban areas by 2013. The EPA will then collect data for several more years to determine which areas are not in compliance with the new standard and whether additional steps are necessary to reduce emissions. All areas of the country were in compliance with the old NO2 standards, according to the EPA.