SEMA Federal Legislative Priorities: 2015
Low-Volume Motor Vehicle Manufacturing: SEMA has worked with key members of Congress on legislation that would enable low volume car manufacturers to produce a range of specialty replica vehicles for customers nationwide. The “Low Volume Motor Vehicle Manufacturers Act” directs the National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) to establish a regulatory structure covering limited-production vehicles. Currently, the U.S. does not have a separate process for certifying automobiles produced in limited numbers. The system is only designed to regulate companies that mass-produce millions of vehicles, which has resulted in an unnecessarily restricted “one-size-fits-all” marketplace. The legislation creates an alternative regulatory program for American companies that acknowledges the unique circumstances associated with limited production custom vehicles. The bill provides for the manufacture of “replica” vehicles (re-creations of vehicles originally produced at least 25 years ago). Generally, these specialty vehicles are typically found in exhibitions and parades or used for occasional transportation. Each low volume manufacturer would be permitted to produce up to 500 vehicles each year. The vehicles would be required to meet current emissions standards. Manufacturers would be permitted to install engines that have already been EPA-certified for current model year vehicles being produced by the larger automakers.
Tax Code: The tax code was last reformed in 1986 when lawmakers simplified the code, broadened the tax base and eliminated many tax shelters and other preferences. It was a revenue-neutral effort, as the law decreased individual income tax rates and the number of deductions without adding to the deficit. Nearly 30 years later, the code has again become overly complex and the shelters and deductions have returned. Meanwhile, budget deficits have exploded and entitlement programs, i.e. Medicare, Medicaid and Social Security, are in need of fiscal reform. While both tax and entitlement reform have been primary campaign themes for years, no legislative action has taken place due to political stalemate in Washington. SEMA is urging lawmakers to use 2015 as an opportunity to pursue comprehensive reforms.
“Tax Extenders”: In December 2014, lawmakers provided a short-term extension for a number of tax credits and deductions that had expired. The fact that most will once again expire in 2015 places pressure on lawmakers to address comprehensive business tax reform rather than piece-meal tax breaks. The following extenders are of particular interest to SEMA members:
R&D tax credit: The research and development tax credit was extended through 2014.
Section 179 Expensing: IRS “Section 179” expensing was renewed through 2014 at a maximum $500,000 deduction, with a $2 million phase-out level. (Absent the renewal, the allowance reverts to $25,000, with a $200,000 phase-out level.)
- Bonus Depreciation: Businesses may write-off 50% of the cost of new equipment in the first year rather than depreciating the cost over multiple years. (Unlike Section 179 expensing, there is no limit on applying the bonus depreciation.)
Health Care: Although the Affordable Care Act was signed into law in 2010, it continues to cause confusion amongst small and mid-size business owners alike. While the law is being phased-in over a number of years, many deadlines have been extended to ensure that businesses can comply with the law’s requirements. SEMA encourages its member companies to review their current situation, speak with health insurance professionals and determine how to proceed. SEMA Government Affairs staff has compiled reference material to assist our member companies with compliance at www.sema.org/healthcare. SEMA will also be pursuing ways in which Congress can further refine the law and help reduce insurance costs.
Collector Car Appreciation Day: SEMA is pleased to announce that "Collector Car Appreciation Day" (CCAD) will be celebrated on July 10, 2015. The date marks the sixth consecutive commemoration in what has become an annual event to raise awareness of the vital role automotive restoration and collection plays in American society. The industry endeavors to preserve our nation's automotive heritage while providing well-paying, high-skilled jobs nationwide. SEMA and its councils will once again seek a Congressional resolution to recognize the day's significance. The most recent CCAD celebration was held on July 11, 2014. As a result of SEMA’s strong relationships on Capitol Hill, the U.S. Senate passed a resolution (S. Res. 493) recognizing the day. Enthusiasts and businesses across the country participated in events ranging from car cruises to small-business open houses and product giveaways. SEMA thanks Senator Jon Tester (MT) for introducing the resolution and Senators Richard Burr (NC) and Mark Begich (AK) for co-sponsoring the measure.
E15 Ethanol: Ethanol can cause metal corrosion and dissolve certain plastics and rubbers, especially in older cars that were not constructed with ethanol-resistant materials. The EPA has acknowledged that a 2007 federal law intended to reduce U.S. dependence on foreign oil sets unrealistic mandates on the amount of ethanol that can be blended into gasoline. The “Renewable Fuel Standard” (RFS) requires an increasing amount of biofuel be blended into gasoline each year, from 9 billion gallons in 2008 to 36 billion gallons by 2022. However, nearly all gasoline sold in the United States contains up to 10% ethanol (E10) and there is widespread opposition to increasing that amount to 15% (E15) in order to meet the RFS mandates. SEMA is working with a diverse coalition of organizations from the auto/boat industries to the petroleum, food and environmental communities in asking Congress to reform the RFS biofuel mandates and ban the sale of E15. While the EPA has approved E15 for use in 2001 and newer vehicles, the agency has made it illegal to use in older vehicles for fear of equipment damage. However, the EPA only requires a gas pump warning label for unsuspecting consumers. Congress is expected to consider legislation to reduce ethanol mandates in 2015.
Bonneville Salt Flats:The Bonneville Salt Flats (BSF) is a national treasure and unique resource of international significance central to the history of motorsports. Over the past 100 years, hundreds of land speed records have been set and broken there in a variety of automotive and motorcycle classes. However, the BSF significantly decreased in size, strength and thickness over a number of decades as salt brine was channeled away from the area. Salt brine is now being pumped back to the BSF, with nearly 2 million tons of salt returning over the past several years. SEMA has joined with the Save the Salt Foundation and a number of other organizations and companies to fundraise and coordinate additional ways to supplement the pumping program. Last summer, about 2,000 tons of dry salt was directly deposited at the end of the access road to Bonneville. The Coalition intends to repeat the process in 2015 and pursue direct dry salt repairs of the various race tracks. Monies contributed to the Save the Salt Foundation will be used to purchase salt and the equipment necessary to pump, transport and lay down the salt. For more information, visit http://www.savethesalt.org/donate.html.
SEMA is now working with key lawmakers raise the profile of this issue on Capitol Hill and in Utah, and identify ways Congress and the state can aid the BSF.
OHVs and Land Use Legislation: Threats to off-highway vehicle (OHV) access typically take form in legislation passed by Congress or regulations issued by the U.S. Forest Service (USFS), Bureau of Land Management (BLM) or other federal and state agencies. The actions threaten recreational access, designate lands as “wilderness” (roadless) or “National Monuments,” or unnecessarily close lands to protect endangered species. Public land access issues are of keen interest to off-roaders and the SEMA-member companies that market products to those groups. SEMA continues to support land-use decisions that are reasonable and enjoy local community support. SEMA will continue to monitor and keep SAN members informed of restrictive legislative proposals. For additional information, please click on the following link: http://www.semasan.com/page.asp?content=off_roading&g=semaga
National Monuments: Under current law, the President has the authority to declare public land with “historic or scientific interest” to be a National Monument. While this designation does not immediately close any roads, it prohibits new roads or trails for motorized vehicles and will require drafting of a new land management plan. SEMA is particularly engaged on this matter, as President Obama has used these powers 13 times over the past six years. The President most recently designated 346,000 acres of the San Gabriel Mountains. The land is located within the Angeles and San Bernardino National Forests in southern California. President Obama is now being pressured to establish a 1.4 million acres “Greater Canyonlands National Monument” in Utah and close 1,050 miles of off-road vehicle trails and monitor another 1,450 miles for future closure. SEMA and its motorized recreation partners sent a letter to the President urging the administration to abandon the idea, citing the positive economic impact of motorized recreation activities, which accounts for over $257 million in annual economic impact nationwide. SEMA is working with the Utah Congressional delegation, in particular Rep. Rob Bishop (R-UT), to craft a more collaborative approach to land use decisions, including input from local citizens, elected leaders and other stakeholder. SEMA also supports legislation that would require the President to complete an environmental review under the National Environmental Policy Act (NEPA) before designating more than 5,000 acres as a national monument. The bill would also ensure public involvement in the process and discussion of multiple factors, including economic impact. The legislation most recently passed the House in 2014 but stalled in the U.S. Senate. SEMA will once again support passage in 2015.
Congressional Automotive Performance and Motorsports Caucus: The Congressional Caucus was formed in 1996 in honor of the 100th year of the car and to recognize the contributions the automotive performance and motorsports industry has made to the U.S. economy. This informal and bi-partisan Caucus, which now has over 60 members, pays tribute to America’s ever growing love affair with the car, motorsports and the specialty auto parts industry. Consumer sales of motor vehicle performance, appearance, comfort, convenience, and technology products total $33 billion annually, while providing jobs for more than a million Americans. In its 19-year history, the Caucus has raised the industry’s profile on Capitol Hill and in the eyes of the public. The Caucus does not seek to reach a consensus on legislative issues. For more information on joining the "Motorsports Caucus" or if you have any questions, please Christian Robinson at firstname.lastname@example.org or 202.783.6007 x. 20.
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