Published on January 13, 2014

Think last year was frustrating?...

Miles Moore, Senior Washington Reporter
Photos by Rubber Manufacturers Association; Tire Industry Association; and Automotive Service Association.
Tire and auto service industry association executives don't expect 2014 to provide much more opportunity for legislative progress than in 2013. Among those offering their opinion are Charles Cannon, president of the Rubber Manufacturers Association (upper left); Roy Littlefield, executive vice president of the Tire Industry Association (upper right); Robert Redding, Washington representative for the Automotive Service Association (lower left); and Dan Zielinski, RMA senior vice president of public affairs (lower right).

WASHINGTON (Jan. 13, 2014) — 2013 was a frustrating year for the tire and automotive repair industries to get any legislative initiatives passed, and industry representatives in Washington don't expect 2014 to be any easier.

"It's very difficult to see any legislative action happening this year on any serious issue confronting this industry," said Charles Cannon, president of the Rubber Manufacturers Association (RMA).

"I don't want to be too pessimistic, and we will continue to be aggressive in pursuing issues of interest to our members," Mr. Cannon said. "But, as a consequence, we have no elaborate legislative agenda except to define and defend our positions."

Roy Littlefield, executive vice president of the Tire Industry Association (TIA), told Tire Business he would have an opportunity to advance TIA's causes in 2014 through his presidency of the Small Business Legislative Council (SBLC) and membership in the Highway Users Alliance.

"The SBLC is a very respected group in Washington," he said. "It will give us a little more access to the White House, and give us a voice in regulatory reform, legislative reform and other issues in which TIA otherwise might not be involved."

Transportation reauthorization

One issue in which the entire industry has a vital interest is congressional reauthorization of transportation funding.

"At the current rate of spending, the Highway Trust Fund will run out of money in 2015," Mr. Littlefield said. "Something has to be done other than kicking the can down the road."

There are several different scenarios being discussed in Congress and in state legislatures, according to Mr. Littlefield. The first and most popular, because it's the easiest, is a significant increase in gasoline and diesel fuel taxes.

However, to make up for current shortfalls, Congress would have to raise fuel taxes by $1 or even $2 a gallon, Mr. Littlefield said. The proposal by Rep. Earl Blumenauer, D-Calif., to raise fuel taxes by 15 cents a gallon is inadequate to replenish the trust fund, he said.

Mr. Cannon also had little regard for the Blumenauer bill. "We've never taken a position on gas taxes in the past, but I would consider the Blumenauer proposal a non-starter," he said.

TIA's position is that transportation-related taxes should not be raised — period, Mr. Littlefield said.

Maryland has just passed the largest single increase in its fuel tax, he said. But TIA prefers the approach taken by Virginia, which managed to raise considerable funds for in-state transportation projects without raising taxes, he said.

Revenue for transportation infrastructure projects is a real problem, according to Mr. Cannon and Daniel Zielinski, RMA senior vice president of public affairs, but it is virtually impossible to imagine any sort of tax hike being passed in an election year, they said.

"The Highway Trust Fund is a nagging question," Mr. Zielinski said.

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"The nation as a whole can comprehend the need for funding, but the revenue being raised is not sufficient."

More than 800 roads in the U.S. are now privately owned and operated, according to Mr. Littlefield.

Tire manufacturers brought the road situation to TIA's attention a few years ago, he said.

"I don't know if that's good public policy or not, but it's making it more expensive to move goods and people," he said.

Taxation

Robert Redding, Washington representative for the Automotive Service Association (ASA), said he hoped the budget package the House of Representatives passed early in December would pass. (The bill passed the Senate Dec. 18, after the interview with Mr. Redding.)

"If that happens, we may see some tax reform," Mr. Redding told Tire Business.

For TIA, estate tax repeal remains at the top of its agenda.

"Last year, we got the estate tax level reduced to 35 percent from 55 percent, and the exemption was raised from $1 million to $5 million," Mr. Littlefield said. "But the president wants to take it back to its original level."

Too often small business owners are forced to sell all or part of their businesses to pay what TIA and other estate tax opponents call the "death tax," according to Mr. Littlefield.

He said he knows of one tire dealer who pays $167,000 annually in insurance against the estate tax — "on the business he built himself."

Used and scrap tires

Despite the relative lack of publicity on the used and scrap tires front in 2013, they remain an urgent issue for RMA, Messrs. Cannon and Zielinski said.

"We believe in technologically and economically sound solutions for scrap tires, because we know they have happened," Mr. Cannon said. "Our consistent philosophy has been to take an economic approach that allows end-use markets for scrap tires to develop."

However, many states are either easing off on their commitment toward scrap tire abatement or diverting scrap tire funds for other purposes, they said.

They called Colorado the "poster child" for poor scrap tire management—with more than 60 million stockpiled tires in the state. Colorado subsidizes end-users of scrap tires, which has effectively stunted the creation of a healthy scrap tire market there, they said.

RMA also plans to promote its model used tire safety bill in several state legislatures, including Florida, where it advanced nicely in 2013 before the legislative year ran out. The legislature in Texas, which also actively considered a version of the RMA's model used tire bill, is not in session in 2014, Messrs. Cannon and Zielinski said.

The association will not actively seek to advance its other model bill — covering proper tire repairs — in 2014, Mr. Cannon said.

Tire fuel efficiency

After nearly four years, both the RMA and TIA are still waiting for the final labeling format, testing procedures and consumer education language for the tire fuel-efficiency grading standard promulgated in March 2010 by the National Highway Traffic Safety Administration (NHTSA).

TIA still hopes to be named the third-party administrator of the consumer education program. Meanwhile, the RMA suspects NHTSA may be waiting for something to come down from the United Nations on global tire regulatory standardization before it signs off on tire fuel-efficiency regulations.

March 2014 is the target date for the final language on tire fuel efficiency, though NHTSA already has missed several previous target dates, Messrs. Cannon and Zielinski said, noting June 2014 is the target date on the United Nations standard.

Environmental, chemical regs

The RMA will be watching both Congress and the states — especially California — closely for regulatory actions on chemicals used by tire manufacturers.

Congress may take up the issue of reforming the Toxic Substances Control Act (TCSA), according to Messrs. Cannon and Zielinski, although the consensus on TSCA reached by Sen. David Vitter, R-La., and the late Sen. Frank Lautenberg, D-N.J., has long lapsed.

California has a state regulation that requires manufacturers within the state to evaluate and, if possible, adopt "safe" alternatives to chemicals defined as toxic, Messrs. Cannon and Zielinski said. Meanwhile, Sen. Barbara Boxer, D-Calif., will fight to prevent federal pre-emption of state chemical regulations, whereas RMA and other manufacturing associations will fight to preserve it.

"Federal pre-emption is very important," Mr. Zielinski said. "No manufacturer wants a patchwork of environmental regulations when one law can be used."

Right to Repair

The November 2013 passage of a bill in the Massachusetts legislature — reconciling the two different versions of the Motor Vehicle Owners' Right to Repair Act that became law in the state in 2012 — gives hope to all Right to Repair advocates for similar legislation in the future.

However, it will remain an uphill battle in Congress to obtain passage of a national Right to Repair (R2R) bill, according to Mr. Littlefield.

A fight is also ahead in New Jersey, the next state scheduled to consider the legislation, he said.

The ASA is concerned that the Massachusetts R2R law contains nothing about the telematics that are original equipment in new vehicles, Mr. Redding said. The association hopes to see this issue addressed within R2R, and plans a telematics seminar as part of the agenda this July at the Congress of Automotive Repair & Service (CARS) in Detroit.

Vehicle safety inspections, state issues

The ASA was displeased with NHTSA's revised guidelines on vehicle safety inspections late in 2013.

Among other things, the new guidelines call for "periodic" safety inspections, rather than annual inspections as before.

Only 17 states still have some sort of periodic vehicle safety inspection on the books, according to Mr. Redding.

"The programs in D.C. and New Jersey were killed, the one in North Carolina is under fire, and some in the Midwest have been diluted," he said.

For many years, the ASA hosted a conference within CARS to meet with representatives of the American Association of Motor Vehicle Administrators, according to Mr. Redding. The ASA plans to reinstate that conference in Detroit this summer, he said.

"We want to become more engaged in Florida," Mr. Redding told Tire Business.

That state has not had a vehicle safety inspection law since it was ended in the administration of Gov. Bob Graham, he said.

Even more, the ASA wants to ensure passage of the bill currently before the Florida legislature to create a shop registration system for both collision and mechanical repair facilities.

A media expose of dishonest repair shops brought the first call in Florida for a licensing program, according to Mr. Redding.

The ASA's Florida members rallied and brought in industry experts to testify in open forums on how a licensing and registration program could best be developed and administered, Mr. Redding said.

"It can be done, where people can have a lot of input," he added.

Healthcare

The Obama administration is delaying by one year online enrollment for small businesses looking to purchase healthcare coverage for their workers through the federally operated insurance exchanges.

The delay prompted the National Federation of Independent Business (NFIB) to call the decision "yet another onerous paperwork requirement for job creators."

Starting in 2014, the Small Business Health Options Program, or SHOP, marketplace will be open to employers with 50 or fewer full-time workers and allows those businesses to compare health plans.

The latest delay affects employers located in the 36 states where the U.S. government is running health insurance exchanges. It does not cover the small business options in the 14 states and the District of Columbia that operate their own exchanges.

The administration said earlier this fall that it would delay online enrollment in SHOP through the federal exchange until November this year.

Small businesses can sign up immediately, however, through an insurer, agent or broker in 2014, according to a Health and Human Services official. The move is intended to allow small employers to sign up for coverage while the C M S continues to work on improving the online experience in the SHOP marketplace on HealthCare.gov.

HHS also said small businesses no longer have to apply to be certified before enrolling in a SHOP plan. Because the application was intended for tax credit purposes, HHS will allow businesses to file the application any time before the business files its taxes.

In the NFIB's response to the announced delay, Kevin Kuhlman, manager of legislative affairs, said the delay "is a disappointment but not a surprise. Small businesses continue to be low on the priority list during the Obamacare implementation process.

"It probably matters little to people in Washington that the failure to get the small business exchanges online adds yet another onerous paperwork requirement for job creators. The continued delays add to uncertainty and contribute to the decision of many owners to take early renewals of their small-group plans."

Some supporters of the health care law expressed frustration with the new delay, the latest in a string of setbacks for the ACA, but said they still support the broad goal of making it easier for small businesses to shop and secure health care coverage for workers.

"It's disappointing that the online portion of the federal small business marketplace through Healthcare.gov will be delayed and it's important it get up and running as soon as possible," according to John Arensmeyer, president of the Small Business Majority, a nonprofit that supports the Affordable Care Act.

"However, it doesn't change the fact that the marketplace can offer the most competitive combination of price and quality for small businesses purchasing health insurance."

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To reach this reporter: mmoore@crain.com; 202-662-7

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