By Steve McDonald

Members of the State Automotive Enthusiast Leadership Caucus participated in the 2010 SEMA Show. Those present included (from left to right) Nevada Assemblyman Richard Carrillo, Nevada Senator Mark Manendo, California Assemblyman Felipe Fuentes, California Assemblyman Curt Hagman, California Assemblyman Tony Mendoza, Nevada Senator Mo Denis, New York Assemblyman Bill Reilich, Wyoming Representative Stan Blake and Montana Senator John Brueggeman.

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.

Michigan Racing: SEMA is supporting Michigan legislation that would allow any municipality to issue a permit for a sanctioned motor vehicle racing event on highways, streets or airport runways within its geographical jurisdiction. Current Michigan law allows only cities to issue these permits. This bill would allow counties, cities, villages or townships to issue similar permits. The measure would make it easier for event organizers to secure one permit at the county level rather than securing permits from each government entity—federal, state or local—with jurisdiction along the race route.

Vermont Motor Vehicle Inspection Proposal: In comments to a proposed inspection regulation issued by the Vermont DMV, SEMA supported a provision that would exempt vehicles registered as exhibition vehicles from OBD II requirements. Under state law, an exhibition vehicle is defined as a motor vehicle that is maintained solely for use in exhibitions, club activities, parades and other functions of public interest and that is not used for the transportation of passengers or property on any highway except to attend such functions. SEMA also recommended that the exhibition vehicle definition be expanded to include a vehicle used for personal recreational travel not to exceed 2,500 miles per year. SEMA also sought clarification on a section of the proposal that would require the inspector to reject a vehicle if the ball joint wear exceeds manufacturer’s specifications. The proposal does not make clear whether it is referring to the manufacturer of the vehicle or the manufacturer of the ball joint, be it a Tier I original-equipment supplier or an aftermarket product. Further, the proposal gives no objective criteria by which an inspector can deem a specific ball joint to be sufficiently worn as to constitute an inspection failure. Since vehicle manufacturers use different designs of ball joints from a variety of suppliers, the degree of wear allowable can vary from vehicle to vehicle and model year to model year. It is therefore necessary to refer to a given ball joint manufacturer’s service specifications to determine replacement status of joints not fitted with wear indicators.

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State Legislative Caucus: In its efforts to promote and protect the auto hobby, SEMA continues to partner with state lawmakers from across the country through the State Automotive Enthusiast Leadership Caucus. The caucus is a bipartisan group of state lawmakers whose common thread is a love and appreciation for automobiles. Approximately 450 state legislators from all 50 states are involved in the caucus. Members of the State Automotive Enthusiast Leadership Caucus gathered this past November to participate in the industry’s biggest annual event, the SEMA Show.

Federal Update

New-Car Mileage Labels: The U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) intend to expand the amount of fuel-economy information contained on vehicle window stickers. Among other changes, the information will now include the amount of carbon dioxide emitted by the vehicle. SEMA submitted comments in favor of incorporating graphics, increasing type size and using other visual tools to help focus consumer attention, a position taken by the automakers. SEMA opposed an alternative approach of using an A–D letter grading system as being too simplistic. SEMA noted that most new-car buyers will be comparison shopping within a specific vehicle segment. Using 25 vs. 28 mpg as an example, both cars would receive the same grade (B) under the grading system. SEMA contends that the consumer can easily distinguish the data (25 vs. 28 mpg) and that there would be a better chance of achieving the intended goal of making the vehicle’s mileage rating a factor when selecting a car.

EPA Approves A/C Refrigerant: The EPA approved hydrofluoroolefin (HFO-1234yf) as an acceptable substitute chemical for chlorofluorocarbon refrigerants. The chemical is intended to replace R-134a, since it is believed to have far less global warming potential. However, 1234yf may only be used in new motor vehicles. The agency did not approve its use by do-it-yourselfers when recharging vehicle air conditioners, pending further review on whether there is a toxic chemical exposure risk via inhalation. The EPA is also considering a proposal to allow 1234yf to be used as a substitute for R-12 in new motor vehicles.

R&D Tax Credit: SEMA joined nearly 1,300 trade associations, companies and other organizations in signing a letter urging Congress to immediately extend the research and development tax credit. Congress was scheduled to vote on a measure before the end of 2010. The R&D tax credit lapsed on December 31, 2009, marking the 14th time it had expired since being enacted into law in 1981. SEMA has worked with more than 100 associations and companies within the R&D Credit Coalition urging Congress to make the credit permanent (or for as long as possible given current budget constraints). The credit offsets costs for companies investing time and money in new technologies and is applicable to both in-house and outside research within the United States. The letter to Congress notes that extending the provisions by the end of 2010 and through at least 2011 “is of the utmost importance to all of us, and to the health of the U.S. economy. Expiration of many of these provisions has already caused job losses, and the uncertainty around their extension will lead to further dislocations just as the fragile economic recovery is beginning.”

China Cracks Down on Fake Goods: The Chinese State Council launched a six-month campaign to enforce laws against counterfeited and pirated goods at the production and distribution levels. The special intellectual property rights (IPR) campaign is focusing on product areas subject to high levels of infringement, such as music and video products, mobile phones and auto parts. The crackdown is scheduled to last until March and will target commodities such as pirated publications, DVDs and computer software, along with violations of trademarks and patents. The national effort will concentrate on 14 provinces, municipalities and autonomous regions, including Beijing, Guangdong, Zhejiang and Shanghai. For more information, click on “China’s Special Campaign to Combat IPR Infringement”.