Congress Introduces Bill Enabling Limited Production of Replica Vehicles

SEMA News—September 2015

FROM THE HILL

Congress Introduces Bill Enabling Limited Production of Replica Vehicles

SEMA-Supported Bill Provides New Opportunities for Domestic Job Creation and Manufacturing Growth

	H.R. 2675 would allow Factory Five to sell turn-key versions of its Mk3 Roadster and other kit-car vehicles.

U.S. Representatives Markwayne Mullin (R-OK) and Gene Green (D-TX) introduced bipartisan legislation that would enable low-volume car manufacturers to produce turn-key replica vehicles for customers nationwide. Called the Low Volume Motor Vehicle Manufacturers Act of 2015 (H.R. 2675), the SEMA-supported bill would allow companies to construct up to 500 “replicas” per year. Those are cars that resemble another production vehicle manufactured at least 25 years ago.

Why is the legislation necessary? The National Highway Traffic Safety Administration (NHTSA) currently treats all automakers the same. The regulatory system and paperwork burdens created by NHTSA were designed for companies that produce millions of cars. There is no alternative method for overseeing companies that produce only a handful of custom cars. H.R. 2675 provides separate regulations that will enable smaller companies to produce ready-to-drive replica cars for consumers who prefer that option.

“The current law does not take into account the unique challenges that small auto manufacturers face when it comes to recreating historic cars,” said Rep. Mullin. “We can’t expect these companies to be able to comply with a law that was established more than 40 years ago for automakers that mass produce millions of vehicles every year. We need to encourage growth in our manufacturing market, not create unnecessary barriers.”

Revology’s Mustang features a new Ford-licensed body and all-new trim and chassis components.

Very few completed low-production vehicles are built in the U.S. today. Nearly all of the replica vehicles on the road began life as kit cars—incomplete vehicles or collections of parts sold without engines and transmissions. Since the consumer is responsible for installing the powertrain, NHTSA technically considers the individual rather than the kit-car maker to be the vehicle manufacturer. The states have categories for these cars. Many have enacted SEMA-model legislation that allows the cars to be titled and registered according to the model year they most closely resemble (e.g., ’32 Ford, ’63 Cobra). They are collector cars shown off at car shows, exhibitions and on weekends and are not used as daily drivers.

“While the market for these vehicles has been historically small, the enthusiasm hobbyists have for them shouldn’t be stymied by regulations that are clearly designed for large-scale manufacturers,” said Rep. Green. “This bill will promote job growth and consumer choice.”

NHTSA had nearly five decades to address the issue but largely overlooked the challenge. In 1996, the agency held a one-day public meeting on reducing regulatory burdens for small vehicle manufacturers. However, nothing happened in the intervening 19 years. SEMA turned to Congress to provide the solution.

Replica vehicles produced under H.R. 2675 would be regulated under a framework similar to the model used for kit cars, which are subject to NHTSA’s equipment-based standards for vehicle components such as lighting, glass, brake hoses and tires. Under H.R. 2675, low-volume manufacturers would register with NHTSA and the U.S. Environmental Protection Agency (EPA) and submit annual reports on the vehicles they produce. Those turn-key cars would be required to meet current model-year emissions standards. In order to comply with this provision, the bill would allow low-volume manufacturers to install engines already certified for equivalent vehicle configurations by the large automakers, along with an onboard diagnostics (OBD) system. Although this is already permitted, current law requires the companies to then retest the engines and submit volumes of duplicate paperwork to the EPA.

	If the bill becomes law, DeLorean Motor Company could produce replicas of the ’81–’83 DeLorean using original parts.

H.R. 2675 complements the kit-car industry, providing hobbyists with the choice to assemble their own vehicles or purchase turn-key vehicles. While many automotive enthusiasts enjoy the process of assembling replica vehicles, not everyone has the time and technical skills needed to complete a kit car. By permitting the production and sale of turn-key replica vehicles, the bill expands the replica market to include those individuals.

“The bill introduced by Reps. Mullin and Green will allow U.S. companies to produce turn-key replicas of older vehicles that are virtually impossible to build under today’s restrictive, one-size-fits-all regulatory framework,” said SEMA President and CEO Chris Kersting. “This legislation will create skilled-labor jobs in the auto industry, help to meet consumer demand for these classics of the past and ensure that our American automotive heritage is preserved.”

SEMA is working with Congress to schedule votes on the Low Volume Motor Vehicle Manufacturers Act during the 2015–2016 session. Representatives Mullin and Green are both members of the House Energy and Commerce Committee, which has jurisdiction over the bill. Rep. Mullin is a car enthusiast himself and has even expressed interest in purchasing a replica Cobra if the bill becomes law. Rep. Green is also a passionate advocate for the bill, as he understands the challenges that small manufacturers face in their efforts to build cars in the United States. To date, the bipartisan-supported bill is being co-sponsored by Representatives Doug LaMalfa (R-CA), Bill Posey (R-FL), Lamar Smith (R-TX), Mimi Walters (R-CA), Mike Kelly (R-PA), Matt Cartwright (R-PA), Sanford Bishop (D-GA), Ken Buck (R-CO), Glen Grothman (R-WI), Todd Rokita (R-IN), and Brett Guthrie (R-KY).

Kit Cars

Superperformance MKIII Kit cars have been around nearly as long as the automobile itself. The term is associated with incomplete vehicles or collections of parts that are produced by a manufacturer and then completed by the purchaser. A hobbyist may assemble all the parts in his or her garage or simply install the engine and transmission into a rolling chassis produced by the commercial manufacturer. Sourcing of the parts varies as well. The vehicle may be re-bodied (whereby the car retains the original chassis and VIN with all new body and mechanicals), or the entire product may be brand new.

The kit-car industry took hold in the ’50s as companies began marketing products that provided older vehicles with a second life. Beyond ordinary repair and replacement, kit-car products instilled a desire for customization and personalization. By the ’70s, enthusiasts were able to purchase components to convert older cars into unique classics or build them from the ground up. The industry addressed a variety of issues, whether supplying consumers with sports-car replicas or fanciful variations of historic vehicles. Kit cars expanded the marketplace, addressed demand for vehicles originally produced in limited numbers and provided the latest technology.

SEMA embodies the kit-car industry’s spirit and soul. It has two councils whose companies support this market: the Automotive Restoration Market Organization and the Hot Rod Industry Alliance. H.R. 2675 represents an opportunity for kit-car manufacturing and its associated supplier network to expand within the United States and export products to satisfy worldwide demand.

H.R. 2675 would provide companies with the option of selling up to 500 replica cars a year to consumers as completed vehicles.
H.R. 2675 would allow the companies to continue selling kits to enthusiasts who prefer to build the vehicles themselves.
Enthusiasts would still have the ability to build specially constructed vehicles that don’t replicate older vehicles.
States would continue to title and register all of the vehicles within an applicable category—hot rod, street rod, specially constructed vehicle, etc.

Rep. Markwayne Mullin (OK-2)

Rep. Mullin is currently in his second term in Congress, where he is a strong voice for small-business owners. The Congressman understands how decisions made in D.C. impact small business, because he is also a business owner. Mullin Plumbing is one of the largest service companies in the region, employing more than 150 Oklahomans.

The business is only one of several successful companies the Mullins own and operate, including Mullin Environmental, Mullin Plumbing West Division, Mullin Services, Mullin Properties and Mullin Plumbing New Construction. Mullin provides the real-life experience that comes from fighting to successfully run businesses in today’s tough economic and regulatory environment.

Rep. Mullin

Rep. Gene Green (D-TX)

Rep. Green has represented the 29th Congressional District of Texas since 1992 and previously served in both the Texas House of Representatives and the Texas Senate. During his time in Congress, Rep. Green has been a champion of health issues, energy, education, labor, domestic manufacturing and preserving Social Security and veterans’ benefits.

He has worked hard to improve access to quality health care, support initiatives to improve our economy and job training and maintain financial aid for students.

Rep. Gene Green (D-TX) is the primary co-sponsor of the Low Volume Motor Vehicle Manufacturers Act of 2015 (H.R. 2675).

	Joel Ayres of the Automotive Aftermarket Charitable Foundation (right) greeted former U.S. Rep. John Campbell (R-CA), who sponsored the Low Volume legislation in 2011–2014, at the SEMA Washington Rally.

SEMA PAC President’s Club Spotlight: Joel Ayres

Joel Ayres is the executive director of the Automotive Aftermarket Charitable Foundation, which is headquartered in Sacramento, California. He is a six-year member of the SEMA PAC President’s Club and was recently inducted into the SEMA Hall of Fame.

“I have been in the aftermarket industry for almost 40 years, and now, as executive director of the Aftermarket Foundation, I am helping this charity help our colleagues in need,” Ayres said. “I joined the SEMA PAC as a Presidents Club member for the same reason: to help our industry. The PAC ensures that our industry’s voice is heard in Washington, D.C. SEMA is made up of many small businesses, and by supporting SEMA PAC, we have a much bigger voice. I urge you to become involved and support the SEMA PAC.”

For more information on SEMA PAC, contact SEMA PAC and Congressional Relations Manager Christian Robinson by phone at 202-783-6007, x20, or by e-mail at christianr@sema.org.