Whatever happens in the legislative and regulatory arena in 2003, the tire and other industries will be influenced by two factors: the Republican victory in the 2002 elections and the prospect of war with Iraq.
It's still unclear, however, just how much either will affect the path of government in the coming year, according to top officials from the Rubber Manufacturers Association (RMA) and the Tire Industry Association (TIA).
``The November election results don't represent a tsunami, but rather a tide change,'' said RMA President Donald B. Shea. ``President Bush and the GOP achieved gains rarely achieved in mid-term elections. But lacking 60 votes in the Senate, we're still facing a Senate where both sides can see their hopes dashed.''
For Roy E. Littlefield III, director of legislative and regulatory affairs for TIA, the situation with Iraq is the major factor of uncertainty.
``We could end up with a deficit in the oil supply,'' Mr. Littlefield said. ``The economy could go down the tubes real quickly. It could be a 10-day or a two-year engagement-we don't know yet.''
The automotive aftermarket, Mr. Littlefield noted, has scheduled Feb. 25 as its day to lobby Congress on issues important to the industry. ``If we go into Iraq Feb. 23, it will be hard to get anyone's ear Feb. 25 on the Right to Repair Act,'' he said. ``This would put everything on the back burner.''
In any case, the RMA and TIA have overlapping regulatory and legislative interests, even if they don't always take exactly the same stand on them. The following are their major concerns in 2003, in approximate order of importance:
The TREAD Act
For better or worse, the Transportation Recall Efficiency, Accountability and Documentation (TREAD) Act will be the defining government action of this decade for the tire industry. For the RMA and TIA, it will remain the top priority.
Mr. Shea called the TREAD Act ``the most significant rulemaking in the industry's history'' and praised RMA members and staff-especially Ann Wilson, senior vice president of government affairs, and Steve Butcher, vice president-standards and technical-for their swift, decisive actions in forging and presenting a united industry position.
``The bill passed Oct. 13, 2000, and we had our first meeting on it Oct. 14,'' Mr. Shea said. ``Our primary issue in 2003 is to continue this effort because we're a long way from finished.''
Topping the RMA's wish list in this arena is obtaining a minimum reserve load requirement for tires, to make up for the extreme drop in tire air pressures allowed under the National Highway Traffic Safety Administration's final rule mandating tire pressure monitoring devices. Considering the agency's four-month deadline for answering petitions, the RMA should have heard back from NHTSA by Nov. 19, according to Mr. Shea.
Meanwhile, the RMA is ``anxiously waiting'' for the final rule revising tire testing and performance standards, which Mr. Shea expects to be issued early in 2003. Regarding the final rule on ``early warning'' data requirements, the association still awaits interpretation on methods of data collecting and, especially, whether the agency will keep production figures and other proprietary data confidential.
``We're working with the agency and Congress to make sure compliance with the TREAD Act is universal,'' he said. ``Any entity that manufactures tires and sells them in the U.S. market must be held to the same compliance standards as any other entity.''
For Becky MacDicken, TIA's director of government affairs, a very specific topic of interest is whether retreaded passenger and light truck tires will be required to bear the tire information number on both sides, as stated in the new tire labeling rule.
``While passenger and light truck retreads are a very small segment of the market, this could be the end of it,'' Ms. MacDicken said. ``And it would set a dangerous precedent for medium truck tires.''
As for tire testing and performance, she hopes retreads will be excluded entirely. Otherwise, TIA stands fully behind the RMA's alternative proposals for NHTSA's standards.
``The industry's made a big effort to stay united on the TREAD Act, and it would be nice for it to stay united on retread issues,'' Mr. Littlefield added.
Outside of tire-specific issues, Mr. Shea said, the RMA's top legislative priority is ``an economic stimulus package that makes sense.'' For him, an essential part of that would be at least some reforms of product liability and civil justice law.
``I'm optimistic, and I'd like to see some movement toward bringing some rationality to the justice system,'' he said. The two most likely areas for that to happen, he added, are in medical malpractice and asbestos litigation.
TIA also would like to see some reforms in the product liability and class action arena, but its hopes are more guarded. ``We have to walk a very careful path on this, with the Firestone recall still on people's minds,'' Ms. MacDicken said.
Meanwhile, with a Republican majority in both houses of Congress, the association feels there is a better chance than ever to obtain a permanent repeal of the estate tax, a major priority for all small business associations. The current law allows a gradual reduction in the tax until its total removal in 2010, ``but then it goes back to square one in 2011,'' Mr. Littlefield said.
Congress is scheduled to reauthorize highway funding in 2003. ``This is a bill that's going to happen,'' Mr. Littlefield said. ``This is a big jobs bill.''
While both the RMA and TIA regard highway funding reauthorization as vital, their interests diverge on some of the specifics. When reauthorization time comes, ``everything will be on the table,'' Mr. Littlefield said, including the current federal highway tax structure.
Since 1982, only new truck tires of 40 pounds or more have been subject to federal excise tax (FET). If a new tax structure-say, a weight-distance tax, in which vehicles are taxed according to miles traveled and gross vehicle weight-is imposed, the truck tire FET would vanish. This obviously would benefit new truck tire manufacturers, but it would cause great harm to retreaders, who are not subject to the tax and who count on the tax on new tires as an important price differential.
Moving to state legislation, the RMA will continue to work toward enactment of effective tire abatement and recycling programs in states that don't yet have them. New York, California, Texas, Alabama and Oklahoma are highest on the target list, said the RMA's Ann Wilson.
Too many states also plunder the fees obtained on sales of new tires for general funds or purposes other than scrap tire abatement, she added. ``States have their fiscal crises, so we need to watch what they do with scrap tire funds,'' she said.
Since 1980, TIA and its forerunner organizations have worked for a Superfund reauthorization bill with liability exemptions for small business. The current makeup of Congress provides some hope for a liability exemption in 2003, according to Mr. Littlefield.
Even so, there are many of the same roadblocks as before.
``I can't see President Bush reinstating the Superfund tax,'' Mr. Littlefield said, adding that Sen. Bob Smith, R-N.H., the leading proponent of a small business exemption, is gone. Large corporations-which want to share the misery-oppose small business exemptions, as do congressional Democrats who adhere to the environmentalists' view and the ``polluter pays'' principle.
A Superfund exemption is becoming more and more urgent for tire dealers and small repair shops, Mr. Littlefield said. In New England, Mississippi and most recently Michigan, there are Superfund sites in which TIA members are being billed for cleanup-sometimes for many thousands of dollars-for minuscule amounts of waste oil or scrap tires the businesses discarded while obeying the strictest letter of the law.
``I don't see how a law could be more unfair,'' Mr. Littlefield said.
Association health plans
TIA hopes for legislative action on association health plans (AHP), a concept supported by the Bush administration. AHPs would allow accredited business and trade associations to pool their members to obtain price breaks on premiums and benefits from insurers, giving them the same leverage as large corporations.
``Now that we've got a Republican Congress and president, AHPs are moving forward so much more quickly,'' Ms. MacDicken said. ``We're getting calls from members every day whose health insurance premiums are rising 50 to 100 percent or more each year.''