WASHINGTON-For the rubber industry, 1996 was a frustrating year regarding legislative issues. The political and philosophical split between the Democratic president and the Republican Congress ensured either presidential vetoes or inconclusive Congressional action on issues important to rubber manufacturers, tire dealers and retreaders.
Furthermore, with the re-election of President Bill Clinton and a continued Republican majority in Congress-a majority still not large enough to override Mr. Clinton's vetoes-issues such as Superfund and product liability reform may well repeat in 1997 the same cycle of high hopes and low achievement they suffered this year.
A look back at the major legislative and regulatory issues of 1996 follows:
At President Clinton's urging, Congress passed an increase in the national minimum wage to $4.75 per hour, effective last Oct. 1. Next Sept. 1, the minimum wage will go up again, to $5.15 per hour.
Rubber manufacturers paid little attention to the increase, because wages in rubber manufacturing plants are far above the $4.75 level.
Tire dealers and retreaders were more concerned. The wage hike won't affect their wages,
which also are well above the minimum. But retailers and small businesses are more vulnerable to the ripple effect a minimum wage hike has on both wages and prices.
A higher minimum wage also affects the labor pool tire dealers and retreaders choose from. Higher wages may cause prospective employees to shun tire work in favor of easier jobs in the same pay scale.
In the effort to get the minimum wage increase passed, the Clinton administration tied it to a separate bill granting small-business tax breaks. The combined bill passed in September.
Among the tax incentives small business received were a gradual, seven-year increase in the expensing limit for equipment purchases, from $17,500 this year to $25,000 in 2003; and an extension of the Work Opportunity Tax Credit, formerly known as the Targeted Jobs Tax Credit, which allows small businesses to deduct part of the first-year wages of hirees from underprivileged groups.
Retreaders were dismayed by the General Services Administration decision to terminate its Qualified Products List for tires and its Quality Assurance Facility Inspection Program for retread shops.
For retreaders, this termination meant an ignominious end to the eight-year GSA effort to maximize government retread procurement. Without QPL testing or QAFIP certification, they said, government procurement officials will have no guide to good-quality retreads-and just one bad batch will be enough to make them give up on retreads.
The omnibus spending bill signed by President Clinton Sept. 30 appeared to grant some relief for these programs. It contained a provision requesting the GSA to extend use of the retread QPL from Dec. 31, 1996, to April 3, 1997.
It also asked the agency to share its QPL testing information with the Department of Transportation in the expectation that NHTSA will issue ``safety standards for non-passenger retread tires.''
Retreaders, however, were more confused than relieved by this latter amendment. QPL testing is for quality, not safety, so a safety standard for non-passenger retreads won't replace the QPL.
Also, NHTSA spokesmen said they had no plans to establish a safety rule for non-passenger retreads.
In October, the EPA granted a waiver to California, allowing the state to require anti-tampering devices for onboard emissions control diagnostic systems for vehicles.
Nine auto aftermarket associations sued the EPA and two California agencies over the waiver, claiming it prevents auto repairers from having access to the information necessary to repair auto emissions equipment, and also keeps independent parts manufacturers from making replacement OBD parts. The suit still is pending.
All industry was disappointed by President Clinton's May 2 veto of a product liability reform bill passed by the House and Senate. Neither legislative body had the two-thirds support needed to over-
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ride the veto.
The bill's provisions included:
*A limitation on punitive damages of $250,000 or twice compensatory damages, unless judges found defendants to be guilty of ``egregious'' behavior;
*Abolition of joint-and-several liability, under which one defendant in a multi-party liability suit can be forced to pay damages for all; and
*A 15-year statute of limitations on product liability lawsuits.
Representatives of tort reform coalitions said President Clinton has indicated some willingness to compromise on product liability in the 105th Congress.
This issue, a perennial source of controversy for tire makers and dealers, was relatively inactive in 1996.
For the second year, Congress passed an anti-rolling-resistance amendment to Transportation Department appropriations. The rider forbids the National Highway Traffic Safety Administration from using its funds to issue a rule amending Uniform Tire Quality Grading to include a grade for rolling resistance and fuel economy.
President Clinton, at Michelin North America's recommendation, had made a tire fuel economy grade part of his Global Climate Action Plan in October 1993.
Other tire makers, however, claimed such a grade would not save fuel or limit greenhouse gases, but force the manufacture of tires which maximize low rolling resistance at the expense of treadwear and traction.
In September, NHTSA announced minor changes to existing UTQG regulations. A new traction rating, AA, was created, and the base course wear rate for course monitoring tires was made constant at 1.34.
Once again, the effort to reauthorize and reform Superfund ended inconclusively. Senate and House Republicans advanced their bills through committee, but disagreed on the amount of retroactive liability relief business should get.
Sen. Robert Smith, R-N.H., sponsored a Superfund bill that, among other things, would have eliminated liability for all dumping at multi-party hazardous waste sites prior to the passage of the Superfund law on Dec. 11, 1980.
The competing GOP legislation, sponsored by Rep. Michael Oxley, R-Ohio, would have made waste generators and transporters exempt from paying any cleanup costs for wastes discarded before 1987.
Senate Democrats, claiming the Republican bills would prove too expensive for taxpayers, offered an alternative giving liability relief to small businesses with 25 or fewer employees and annual earnings of $2 million or less.
All these Superfund bills failed to reach the Senate floor, as did a compromise measure that would have given liability exemptions to dealers in scrap rubber and other recycled materials.
In lieu of other legislation, the Clinton administration unveiled a $1.9 billion toxic waste initiative, which Goodyear criticized as ``another example of government throwing money at a problem.''
Congressional leaders said they want to act as soon as possible on Superfund in the 105th Congress. But the nearly unchanged composition of the federal government will make it difficult for any sweeping reforms to pass in 1997.
The re-election of President Clinton together with a Republican-controlled Congress, could limit progress on some issues.
Tire Business photo by Miles Moore