SEMA News—March 2020

LEGISLATIVE AND TECHNICAL AFFAIRS

By Stuart Gosswein

FEDERAL UPDATE

The Recognizing the Protection of Motorsports Act of 2019 (RPM Act), H.R. 5434/S. 2602, was reintroduced in the House of Representatives in December by Rep. Patrick McHenry (R-NC) and Rep. Raul Ruiz (D-CA).

NHTSA Replica Car Rule: SEMA sued the National Highway Traffic Safety Administration (NHTSA) last October for failure to meet a 2016 deadline to issue a regulation to implement the replica car law. In December, NHTSA responded to a federal court of appeals deadline by issuing a proposed rule. SEMA and industry members have urged the agency to quickly finalize the rule, which will allow companies to produce and sell turnkey replica cars. Under the law, low-volume automakers may sell up to 325 cars each year that resemble production vehicles manufactured at least 25 years ago. The EPA and the California Air Resources Board have issued guidelines and regulations covering the engine packages to be installed in these replica vehicles.

Chinese Tariffs: As of this writing, the United States and China have agreed to a “phase one” trade deal whereby China will buy more U.S. goods and implement some structural changes to its trade laws. In exchange, the United States did not impose tariffs scheduled to go into effect last December on List 4 consumer goods such as cell phones and computer laptops. The United States also reduced from 15% to 7.5% tariffs already in effect on other List 4 products. However, the 25% tariffs on Lists 1, 2 and 3 products remain unchanged. Lists 1 and 2 include miscellaneous metal and rubber parts, wiring, and measurement devices. List 3 covers most auto parts imported from China. The phase-one trade deal included some intellectual property enforcement measures and an agreement to end the practice of pressuring foreign companies to transfer their technology to Chinese companies. U.S.-Chinese negotiators will now pursue a “phase two” deal to address outstanding issues such as reducing the U.S.-China trade imbalance, addressing cybertheft, and stopping Chinese subsidization of key industries. A phase-out of the 25% tariffs may be tied to a demonstration that the phase one enforcement measures against unfair trade have been effective.

NAFTA/USMCA: The U.S. House of Representatives passed the United States-Mexico-Canada Agreement (USMCA), which replaces the North American Free Trade Agreement. The U.S. Senate is expected to ratify the new agreement in early 2020. The USMCA will require that vehicles have 75% North American content, compared with 62.5% currently. At least 40%–45% of the vehicle content must be made by workers earning at least $16 an hour.

Collector Car Appreciation Day—July 10, 2020: SEMA and its Automotive Restoration Market Organization and Hot Rod Industry Alliance announced that the next Collector Car Appreciation Day will be celebrated on July 10, 2020. The date marks the 11th consecutive commemoration in what has become an annual event to raise awareness of the vital role automotive restoration and collection plays in American society. SEMA and its councils will once again seek a congressional resolution to recognize the day’s significance. Enthusiasts and companies alike are already planning open houses, car cruises, club gatherings and educational events to commemorate the day. Scheduled events will be posted at www.semasan.com.

Federal Tire Safety Standards: NHTSA is seeking public comments on whether the agency should update federal safety standards for tires to address new technologies. NHTSA is specifically reviewing the existing strength test, the bead unseating resistance test, and the tire endurance test. The agency will also consider the relevance of some tire marking regulations and ways to reduce unnecessary regulatory burdens.

ADAS Test Procedures: NHTSA has published nine draft research test procedures to assess the performance of certain types of Advanced Driver Assistance Systems (ADAS). NHTSA is seeking public comments on whether the procedures adequately, objectively and practically assess the system performance in a test track environment. The procedures are intended for better understanding the technology and are not indications that NHTSA will be establishing ADAS regulations at this time. The test procedures including active parking assist, blind-spot detection and intervention, and rear automatic braking, among other topics.

Restoring National Parks: The U.S. Senate Energy and Natural Resources Committee passed legislation that would dedicate much-needed funding to address a $12 billion maintenance backlog in America’s national parks. The Restore Our Parks Act would apply unallocated revenue from energy produced on federally owned lands and waters. The amount of money would be capped at $1.3 billion annually through 2024. The bill is supported by the Outdoor Recreation Roundtable (ORR), which is comprised of 27 top industry associations, including SEMA, representing off-roading, camping, fishing, boating, hiking, archery and other sports. The legislation recognizes the significant economic contributions that the outdoor recreation industry generates ($887 billion per year in economic activity and an estimated 7.6 million direct jobs) and is consistent with ORR’s efforts to support rebuilding and expanding the nation’s recreation-related infrastructure. A similar bill is awaiting a floor vote by the U.S. House of Representatives.

RPM Act: The Recognizing the Protection of Motorsports Act of 2019 (RPM Act), H.R. 5434/S. 2602, was reintroduced in the House of Representatives in December by Rep. Patrick McHenry (R-NC) and Rep. Raul Ruiz (D-CA). The Senate bill was introduced in October by Sen. Richard Burr (R-NC) and Sen. Joe Manchin (D-WV). SEMA is asking industry and racing enthusiasts to contact their lawmakers in the U.S. Congress to request their support for the RPM Act. SEMA is working with the House Energy & Commerce Committee to consider the bill in early 2020. The bipartisan RPM Act protects Americans’ right to convert street vehicles into dedicated racecars and the motorsports-parts industry’s ability to sell products that enable racers to compete. The RPM Act reverses the Environmental Protection Agency’s (EPA) interpretation that the Clean Air Act does not allow a motor vehicle designed for street use—including a car, truck or motorcycle—to be converted into a dedicated race car. This American tradition was unquestioned until 2015 when the EPA took the position that converted vehicles must remain emissions-compliant even though they are no longer driven on public streets or highways. Enthusiasts can learn more about the RPM Act by visiting www.sema.org/epa-news.

Wilderness Designations: The U.S. House Natural Resources Committee passed legislation that would create and expand wilderness designations in California, Colorado and Washington state. Wilderness designations provide the highest level of permanent protection available and prevent the creation of roads and trails. Bills that were passed included the Colorado Wilderness Act of 2019 to designate 33 areas in Colorado as wilderness totaling 740,000 acres, and the Northwest California Wilderness, Recreation, and Working Forests Act to authorize eight new wilderness areas and expand nine others covering 260,000 acres.

STATE UPDATE

New Jersey—Vehicle Warranties: The New Jersey legislature passed a bill to require new-car dealers to provide purchasers written notice that it is illegal for manufacturers or dealers to void a warranty or deny coverage because aftermarket or recycled parts were installed or because someone other than the dealer performed service. The legislation now goes to Governor Phil Murphy for approval.

North Carolina—Emissions: Beginning December 1, 2019, all motor vehicles 20 years old or older were exempted from emissions testing in North Carolina. The change stems from a 2017 regulatory reform bill. Previously, 22 of the state’s 100 counties required vehicles model-year ’96 or newer to undergo an annual emissions inspections. New cars under three years of age also remain exempt from such inspections.