Tracking Trends

Some Legislative Proposals Follow Predictable Patterns

Among the greatest challenges of any business is the effort and skill required to stay current or even ahead of what is popular. Predicting trends and following their progress are key elements to success not only in business, but also in politics. Just as businesses are subject to consumer sentiments and economic fluctuations, timely legislative initiatives and popular regulatory proposals can be shaped by any number of national variables and are often broadly applicable. The following are several important legislative trends affecting the automotive specialty-equipment industry that continue to feature prominently in state and federal government agendas. 

Clean Vehicle Incentives

In this election year, the price of gasoline has once again emerged as a national issue, topping the list of many voters’ concerns. In the name of emissions reduction and national security, the federal government has introduced initiatives to increase the fuel efficiency of new vehicles sold in the United States. The National Highway Traffic Safety Administration’s Corporate Average Fuel Economy (CAFE) program, instituted in 1975, is today being used as a tool to push new motor vehicles to be progressively more efficient, eventually reaching an average of 60 miles per gallon by 2025.

Incentive programs to reduce emissions and consumer dependency on petroleum are not unique to the federal government, however. Legislation to reduce the sale of gas guzzlers and remove older “gross polluters” was introduced in Rhode Island and Massachusetts. In New York, proposed legislation would create the Clean Vehicle Incentive Program, consisting of rebates and surcharges on the purchase of new motor vehicles based on their emissions.

Major auto manufacturers are not waiting for these proposals to become realities, however. As global oil production remains subject to unpredictable fluctuations, prices at the pump remain higher than ever. As the cost of operating a vehicle continues to require consumers to search for more fuel-efficient options, manufacturers respond to new market demands.

Large automakers are pouring resources into developing new technologies to increase efficiency while maintaining the performance and quality expected by American consumers. Most of these manufacturers are already pressing for production of vehicles that use traditional gasoline more efficiently while also introducing new and alternative fuel technologies. The push for increased fuel economy has already resulted in companies moving away from the traditional mantra of “no replacement for displacement” in favor of swap-ping V8s for turbocharged four- and six-cylinder engines.

The trend of legislation and regulation pushing for increased fuel economy is one that will continue to shape the new-car market and production offerings of major manufacturers for the foreseeable future.

The Burden of Increased Government Regulation

Increased government regulation is a major point of contention in politics today. The accumulation of requirements that must be followed when providing goods or services to a consumer has become increasingly burdensome. Many states create excessive and often costly roadblocks that inhibit the timing and efficiency of a business.

In Maryland and New York, bills to further regulate and track the manufacture and use of tires by imposing additional identification numbers goes beyond the sufficient checks to insure quality and safety. In Michigan, Oklahoma, South Carolina and Georgia, legislatures considered bills that would require installers to inform consumers of the use of mechanical aftermarket parts in the repair of their vehicles.

The time and paperwork required by these proposed regulations burden the already complicated process of auto repair and place a negative stigma on many parts that are often designed to be safer and more affordable than original-manufacturer equipment.

Hobby Cars as Revenue Sources

It has been four years since the collapse of the global economy, and the fallout from the ensuing credit crunch is still reverberating across the country. As budget shortfalls become a perpetual concern, states and municipalities continue to search for ways to raise revenue.

As a result of the perceived luxury status of collector cars, registration exemptions and specialty-use provisions become easy targets. In Virginia and Washington, legislatures attempted this year to raise funds by modifying annual fees imposed on the registration of collector vehicles. Additionally, in Maryland, a bill was introduced to increase the age of vehicles that qualify for registration as historical motor vehicles, thus decreasing the number of vehicles eligible for a reduced rate.

As all levels of government across the nation continue to work to protect public services while operating on reduced budgets, the exemptions classic-car hobbyists and enthusiasts enjoy will continue to come under threat.

Registration Made Easy

One of the more favorable legislative trends this year includes exemptions and special designations for specialty vehicles in several states. The best of these examples are in states that adopt SEMA’s own street rod and custom vehicle model legislation, which creates specific registration categories for historic and specialty cars.

Both Massachusetts and Texas recently joined 20 other states by enacting versions of SEMA’s model bill. New York and New Jersey have versions of the bill pending this year. Other favorable accommodations were introduced in Wisconsin and Michigan to allow for the expanded use of collector vehicles.

While these victories exemplify the willingness of legislatures to work with automotive enthusiasts to expand and preserve the rights enjoyed within the hobby, it remains important to work in all states to ensure that these privileges
are protected.

A Beautiful Noise

It is no secret that automotive enthusiasts are often proud to display custom aspects of their vehicles. A louder-than-stock exhaust system is often the first aftermarket addition an enthusiast makes to his or her vehicle. However, the appropriate decibel level a vehicle’s exhaust may produce without becoming a nuisance is not a universally agreed-upon concept. 

Efforts to curb the freedom of consumers to choose were reintroduced in legislatures again this year, including a Vermont bill to ban aftermarket exhausts that produce sound levels higher than those of a stock muffler. In New Jersey, a broadly written bill would prohibit any modified muffler that produced unusual noise levels. In order to avoid such ambiguous language, which can lead to improper enforcement, SEMA has crafted model legislation that sets noise limits at 95 decibels and outlines specific measurement guidelines proposed by the Society of Automotive Engineers (SAE). Bills following these specific guidelines were introduced in West Virginia, Hawaii and Iowa during this year’s legislative sessions.

Exhausts systems are not the only aftermarket parts to be targeted by restrictive legislation recently. The Hawaii House of Representatives moved to consider a bill to limit the size of speakers that may be installed in vehicles. This initiative, although a first, may not prove to be unique in the future as the sophistication of mobile audio systems improves and the technology that allows for increased integration of mobile electronics grows in popularity among enthusiasts.

Vehicle Miles Traveled and Big Brother

As governments, both federal and state, push to incentivize the development and production of more fuel-efficient vehicles alongside those that use alternative fuels altogether, they increasingly cannibalize their own sources of revenue. The less Americans consume at the pump, the less money is contributed to budgets by means of fuel taxes. The consequence of this predicament has not gone unnoticed. 

Pilot programs to develop a method of charging drivers a fee for vehicle miles traveled (VMT) has been proposed in many forms. Global positioning satellite units similar to those used in tracking commercial shipping trucks have been tested in private applications. This proposal has since been met with substantial concern over privacy rights and even constitutional violations.

In Michigan, for example, legislation was introduced to prohibit the state from imposing a VMT tax on vehicles and would specifically disallow any global-positioning-satellite-based toll that would provide for the location tracking of private motor vehicles. Preemptive legislative initiatives such as this are a telling sign that many states see the VMT taxes as a rising issue and view it as a possible threat in the near future.

As legislative sessions across the country progress this year, these trends are likely to become clearer. Although many of the most prominent of these issues may never be uniformly resolved, the work to advocate for positive and effective pro-business laws within each legislative body remains an essential pursuit. As new issues arise and old ones are packaged in novel ways, the need to track and understand legislative and regulatory trends remains as important as ever.