SEMA News—March 2023

LAW AND ORDER

LEGISLATIVE AND TECHNICAL AFFAIRS

By Daniel Ingber

FEDERAL UPDATE

RPM ACT: Despite strong Congressional backing and extraordinary support from the racing community, the 2021–2022 Congressional session ended without passage of the RPM Act. During the final days of 2022, key negotiators in Congress could not reach an agreement on bill language that balanced the need for federal law to protect racers and motorsports parts businesses from U.S. Environmental Protection Agency (EPA) enforcement with reasonable measures to ensure that race parts are not used on vehicles driven on roads and public highways. The RPM Act made incredible progress in the 2021–2022 session of Congress. In addition to more than 1.5 million letters advocating for the RPM Act from the motorsports community to Congress, SEMA worked with Richard Petty to meet personally with key lawmakers in Washington, D.C., and NHRA Top Fuel driver Antron Brown testified in support of the bill before the U.S. Senate Environment and Public Works Committee. SEMA will continue its advocacy efforts to bring certainty to the racing community that is needed to protect a great American pastime and hundreds of thousands of jobs in communities throughout the country. For updates and information, visit
www.saveourracecars.com.

A Booming Outdoor Recreation Industry: New data released by the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) shows that outdoor recreation generated $862 billion in economic output and 4.5 million jobs in 2021. This equates to 1.9% of GDP in the U.S. economy and highlights the record-setting growth that the outdoor recreation industry has seen over the past few years. “From the creation of jobs and increased profit for small businesses in local economies, to larger boons to our national economy, this sector is a consistent driver, even in times of economic uncertainty,” said Jessica Turner, president of the Outdoor Recreation Roundtable (ORR), of which SEMA is a member. ORR is America’s leading coalition of U.S. outdoor recreation trade associations. It represents more than 50,000 businesses that produce vehicles, apparel, equipment and services enjoyed in our nation’s parks, waterways, trails and outdoor spaces. SEMA’s focus within ORR is on motorized recreation (four-wheel, ATVs, UTVs, etc.) along with all the equipment that makes it possible to tow RVs, trailers, boats and off-road vehicles (suspension, wheels, tires, increased horsepower, etc.).

INFORM Consumers Act: The SEMA-supported INFORM Consumers Act became law as part of the fiscal-year 2023 omnibus spending package. This bipartisan law is critical in helping law enforcement, manufacturers, retailers and online marketplaces of all sizes work together to protect consumers from bad actors peddling counterfeit and stolen goods. The INFORM Consumers Act increases transparency and accountability by requiring sensible verification and disclosure requirements designed to disrupt the sale of illicit goods. Below are key provisions of the INFORM Consumers Act:

• Requires online marketplaces to verify certain information about high-volume third-party sellers of consumer products, which is defined as sellers who make 200 or more discrete sales or transactions totaling at least $5,000 during any continuous 12-month period in the last 24 months, including the seller’s bank account number, business tax identification number or a taxpayer identification number, and contact information.
• High-volume third-party sellers with $20,000 in annual gross revenue through an online marketplace will have to disclose to consumers the full name of the seller or company, business address, and contact information (current working email address, phone number or other direct electronic messaging for the seller) after each sale.
• Empowers online marketplaces to suspend high-volume third-party sellers of consumer products who do not provide the required information within 10 days of the request from the online marketplace.

E15 Ethanol: The EPA is proposing to expand the amount of biofuels blended into gasoline by oil refiners during the next three years to 20.82 billion gal. in 2023, 21.87 billion gal. in 2024, and 22.68 billion gal. in 2025. More than 15 billion gal. per year would be derived from corn-based ethanol with the remainder coming from switchgrass, animal fats, or methane from dairy farms and landfills. Under the EPA program, oil refiners are required to meet the biofuel blend volumes or buy tradeable credits from refiners that do. In order to meet the biofuel volumes, the EPA agreed in 2011 to allow the amount of ethanol in gasoline to increase from 10% to 15% (E15) for model-year ’01 or newer vehicles. Ethanol, especially in higher concentrations such as E15, can cause metal corrosion and dissolve certain plastics and rubbers in older automobiles that were not constructed with ethanol-resistant materials and certain specialty high-performance equipment installed on newer vehicles. Although the EPA requires E15 gas pumps to include a warning label about fueling restrictions, SEMA continues to believe this is insufficient to guard against misfuelling.

Steel and Aluminum Tariffs: The World Trade Organization (WTO) ruled that the Section 232 tariffs imposed in 2018 by President Trump did not qualify under the claim of U.S. national security. The ruling applies to steel and aluminum imported from China, Turkey, Norway and Switzerland. The tariffs were global in scope when first imposed, but the United States has subsequently entered into agreements with many other countries to set metal import quotas and not challenge tariffs previously imposed. These countries include Argentina, Australia, Brazil, Canada, the European Union, Great Britain, Japan, Mexico and South Korea. SEMA has opposed the tariffs since they hurt U.S. companies and consumers and have failed to address global metal overproduction, primarily by China. Despite the WTO ruling, the issue remains unsettled. The U.S. Trade Representative disagrees and responded that the WTO does not have the authority to question the claim of a national security threat. There will be no immediate action on a U.S. appeal of the ruling. The WTO’s Appellate Body is not hearing cases since the United States has blocked new nominations to fill vacancies on the board. The United States contends that the WTO must first make reforms to its dispute settlement system.

FTC Crackdown on Fake Reviews: The Federal Trade Commission (FTC) has requested public comment on the potential harms stemming from deceptive or unfair review and endorsement practices used by businesses. Although fake reviews are illegal, the agency is exploring whether stiffer civil penalties for violations would make the marketplace fairer for consumers and honest businesses. As it considers a rulemaking, the FTC is seeking feedback on the pervasiveness and potential harms to consumers and competition caused by fake reviews, paid reviews, fake review websites and similar practices.

Right to Repair & Modify: The fiscal-year 2023 Omnibus Appropriations law includes language that directs the Federal Trade Commission (FTC) to prioritize investigations and enforcement to protect consumers from unfair control over vehicle data, including telematics information, which is wirelessly sent from a motor vehicle to the vehicle manufacturer. The law recognizes the FTC’s ongoing work examining how manufacturers, particularly mobile phone and car manufacturers, may limit repairs by consumers and repair shops, and how those limitations may increase costs, limit choice and impact consumers’ rights under the Magnuson-Moss Warranty Act. SEMA supports this provision and is also working to protect the right to modify by advocating for Congress to pass the REPAIR Act (Right to Equitable and Professional Auto Industry Repair), a bipartisan bill that would prohibit vehicle manufacturers from employing any technological or legal barriers that block aftermarket parts manufacturers or vehicle repair facilities from accessing critical repair information and tools. The bill also requires companies producing vehicles equipped with telematics to make available to aftermarket manufacturers and repair facilities any critical repair information and tools at a fair and reasonable cost.