WASHINGTON—With the continuing gridlock in Congress exacerbated by a midterm election, federal government activities were limited during 2014.
Legal action, as far as tire dealers and auto service professionals were concerned, was in the states.
For the aftermarket, the biggest news came in January when representatives of auto makers and the aftermarket signed a memorandum of understanding (MOU) for the car makers to provide independent auto repairers and do-it-yourselfers with the same repair and diagnostic information and tools, reasonably priced and in an accessible format that they provide their franchised dealers.
The MOU was motivated largely by final passage in Massachusetts of the Motor Vehicle Owners' Right to Repair Act, which mandates criminal penalties against auto makers that withhold repair and diagnostic information and tools.
In the U.S. Congress, on the other hand, the most important tire-related legislation that managed to pass was a two-year, $10.8 billion stopgap transportation funding bill, which President Barack Obama signed into law in August. Various other transportation proposals, including the Obama administration's own six-year reauthorization package, got nowhere with lawmakers.
In July, however, the Obama administration did announce an initiative for a “Build America Transportation Investment Center” within the U.S. Transportation Department. The investment center, according to the president, is designed to serve as a “one-stop shop” for cities and states seeking ways to fund transportation infrastructure projects.
Opinion was mixed as to whether the Republican congressional sweep in November, which gave the GOP majorities in both the House and Senate, would do anything to end gridlock in Congress. Some observers, however, said the Republican majority may have the opportunity it wants to alter or repeal parts of the Affordable Care Act (ACA)—something the GOP has attempted more than 50 times to do in the U.S. House.
A bill to reform the operations of the National Highway Traffic Safety Administration (NHTSA), inspired by the massive General Motors Co. recall of faulty ignition switches, also failed to advance.
For the tire industry, the big action came from regulatory agencies and the Executive Branch. The major story broke in June, when the United Steelworkers (USW) union petitioned the International Trade Commission for countervailing and antidumping duties against Chinese passenger and light-truck tires under Sections 701 and 731 of the Trade Act.
The USW had won elevated tariffs against Chinese tire imports between 2009 and 2012, under Section 421 of the Trade Act.
The Commerce Department issued countervailing duties of 15.69 percent on nearly all Chinese consumer tire imports, effective Dec. 1 and retroactive 90 days to Sept. 5.
Commerce exempted ST-type trailer tires from the duties and gave three companies—Cooper Kunshan China Tire Co. Ltd., Giti Tire Fujian Co. Ltd. and Shandong Yong-sheng Rubber Group Co. Ltd.—different duties, based on its investigation.
Commerce postponed until mid-January its decision on anti-dumping duties, because of the extraordinary complexity of the case.
Even after Commerce publishes its final determinations, the department's International Trade Commission will review the decisions and make public its separate determination within 45 days, according to agency protocol.
The White House issued executive orders postponing the provisions of the ACA affecting mid-sized employers until 2015 and expanding overtime pay rules to cover millions of salaried workers. The Tire Industry Association (TIA) and the Automotive Service Association (ASA) opposed the latter order, saying it would cause the labor costs of small businesses to skyrocket.
The Treasury Department issued new rules it said would make it more difficult for U.S. companies to move their corporate headquarters overseas to reduce their taxes. However, TIA was able to overturn an Internal Revenue Service misinterpretation of tax law that would have forced retreaders to pay federal excise tax on casings imported to the U.S. for retreading.
In November, the United Nations World Forum on Automotive Regulations approved Global Technical Regulations for tires, although U.S. representatives abstained on the vote. The Rubber Manufacturers Association, however, said its members were generally happy with the harmonized regulations.
Transportation Department Secretary Anthony Foxx disclosed in early December that the deadline to finalize a rule establishing a tire fuel-efficiency consumer information program was now extended to 2017, or nearly eight years after that rule was promulgated initially.
In February, TIA renewed its call to the agency to serve as third-party administrator of the standard's consumer education program.
In state legislation, the RMA and tire recyclers won a major victory in June when Colorado Gov. John Hickenlooper signed into law a bill designed to clean up the state's 60-plus million stockpiled scrap tires.
The new Colorado law abolishes the state's existing tire laws and its waste tire advisory commission. It expands the old fee on new tire purchases from passenger tires to all tires, but reduces the rate to 55 cents from $1.50 per tire as of Jan. 1, 2018.
Also on that date, Colorado's waste tire market development fund will be abolished, and stringent new tire storage laws will go into effect, outlawing any additions to the state's tire monofills.
In California, tire-related bills had a mixed showing.
The legislature passed a bill that would have required California's Bureau of Automotive Repair (BAR) to order any store selling or repairing tires in the state to be capable of servicing tire pressure monitoring systems (TPMS), only to have Gov. Edmund G. “Jerry” Brown veto it.
The TPMS bill had the support of the California Tire Dealers Association and Les Schwab Tire Centers Inc. However, Gov. Brown said the issue needed more study before the state enacts a new licensing scheme. He promised to direct the BAR to work with stakeholders on the issue.
Gov. Brown did sign a bill directing the state's Department of Recycling Resources and Recovery (CalRecycle) to give priority to disadvantaged communities in tire-derived product grant applications. He also signed bills to establish an advisory committee to propose a road usage fee as an alternative to the state's gas tax, and to guarantee California workers three days of paid sick leave annually.
A bill related to asphalt rubber didn't make it out of the California Senate. The bill would have extended a provision for the California Department of Transportation to use at least 60-percent rubberized asphalt concrete (RAC) in its annual paving material tonnage.
The asphalt rubber industry and environmental groups favored the legislation, but manufacturers and supporters of “terminal blend” rubberized asphalt—blends that use a fine-mesh rubber powder and generally are mixed in asphalt facilities—opposed it.
TIA members in Maryland and other small businesses in the state were jubilant in March when the Maryland legislature passed a bill gradually raising the exemption threshold for estate taxes within the state.
Under previous Maryland law, the state charged a 16-percent tax on estates worth more than $1 million.
The new law raises the threshold to $1.5 million on Jan. 1, 2015, reaching the current federal exemption of $5.34 million on Jan. 1, 2019.
To reach this reporter: [email protected] crain.com.