Government Issues
GOVERNMENT UPDATE Timing is everything and it is fortuitous that TIA FAX is in your hands now because we believe that you would like to inform your U.S. Senator how strongly you feel about having the IRS receiving your credit card receipts information. That’s right – a new proposal would require credit/debit card processors to report to the IRS an annual dollar figure of the credit/debit receipts they process for any and each “merchant.” Basically, a “merchant” is anybody in business that accepts credit or debit cards for payment.
The ostensible purpose is for the IRS to profile industries for what should be the appropriate amount of overall gross receipts, credit/debit card receipts, and then back out an estimate of the appropriate amount of cash transactions that businesses should be reporting on their tax returns.The proponents claim the new information reporting form will not be used for audits, but they do note that anytime there is third-party reporting of income, compliance improves. It gets worse – the payment facilitator would be required to report annually to the IRS the name and address of each participating merchant and the aggregate amount of payments to the merchant in settlement of purchases made through the payment facilitator. The payment facilitator would be required to request Taxpayer Identification Numbers (TINs) from merchants. (Sometimes this is the Employer Identification Number or could be the social security number of a sole proprietor.) If a correct number is not furnished, the payment facilitator would be required to withhold taxes from the payments.The backup holding rate is 28 percent! This provision could be used as a “revenue offset” and right now looks very appealing to a lot of folks in the Senate.
Please contact your U.S. Senator now and let them know what a disastrous idea this is. If you would like more information or need any help locating contact information for your Senators,please contact Paul Fiore at (800) 876-8372,ext.102 or by email at pfiore@tireindustry.org. 4-21-08
Chinese OTR Tires Subject to New Anti-Dumping Tariffs
We have received a few calls about the impending anti-dumping tariffs about to be charged on many Chinese OTR manufacturers and that tells us there are many of you with questions about where this will lead and whether TIA will have a “position.” From a practical standpoint, it would be difficult to be in opposition to anti-dumping fines. However, many of our members have probably been doing business with several of those manufacturers and the concerns about new shortages arising as the price of these tires rise two- or three-fold due to the steep fines. Many folks on both sides of the Pacific believe that some OTR tires were named without merit and there will be appeals. TIA will address the issue with some volunteer help at the Government Affairs
Committee’s next conference call. The Department of Commerce (DOC) article is available from the first link below and the DOC “Fact Sheet” can be found at the second link. Please let us know of your opinion on this topic by emailing pfiore@tireindustry.org.
http://trade.gov/press/press_releases/2008/tires_020608.asp
http://ia.ita.doc.gov/download/factsheets/factsheet-prc-tires-prelim-020608.pdf
Estate (Death) Tax
The Senate Finance Committee will hold a hearing on estate tax relief this week. As we opined earlier this year, the passage of the stimulus bill was probably the fatal blow to our efforts this year. With each passing day, it looks as if we are on a crash course with the temporary repeal in 2010 and the ultimate return to a top rate of 55 percent and a $1 million personal exemption in 2011. Our coalition will be extraordinarily lucky if we can convince Congress to “stop the clock” in 2009, and have them make permanent the $3.5 million exemption and 45 percent top rate that will be the temporary numbers for 2009. In addition to the hearing, the budget resolution debate will generate some estate tax relief buzz this week.
The economic stimulus plan that just passed Congress probably put an end to any possibility of Death Tax (Estate Tax) reform any time soon. There are too many unknowns about how the government is going to pay for the new tax rebates. The stimulus does include some interesting provisions for anyone thinking of buying new equipment. The amount that can be expensed for 2008 in the first year under Section 179 of the Internal Revenue Code is increased to $250,000. The asset purchase cap is increased to $800,000. These amounts are not indexed for inflation. In addition, for 2008 only, there is also a 50 percent first year depreciation bonus for most assets.
Many of you may have read about the tread depth “call to action” that has now apeared in several industry publications. Inquiring minds are wondering if it’s not time to change the accepted industry standard of 2/32" as a “safe” minimum (and the depth of the NHTSA-mandated wear bar indicator) to 4/32". We have “safe” in quotation marks because the NHTSA standard is not about safety but simply mandates the wear bar as a visual indicator tool. There is no federal regulation pertaining to minimum tread depth; however there are approximately seventeen states that currently have a periodic motor vehicle safety inspection and anything below 2/32" is usually a failure. There is a dearth of testing data on the wet traction differences between 2/32" and 4/32". (One large retailer did run some tests that were certainly eye-opening.) We make these points for your consideration because the TIA government affairs committee has been charged with the task of exploring this issue. You are reading this because you are a member of TIA and we’d love to hear from you on this issue. Please send your comments to pfiore@tireindustry.org.
As Congress slowly begins to get back to work the estate tax issue is making an appearance. While various estate tax repeal bills have been introduced, the focus in this Congress, as a practical matter, is on estate tax relief. At the time when he proposed his amendment, Senator Baucus indicated it was his “intent” that a placeholder would allow for the exemption and the rate to be frozen at their 2009 levels of $3.5 million and 45 percent. The catch is the provision still has to be offset by spending reductions elsewhere or, more likely, tax increases elsewhere. Senator Baucus has since indicated that he is interested in “doing something” in 2008 and the Senate Finance Committee has held a hearing and is expected to hold another hearing early this year. This will generate some interest in the topic and provide an opportunity for us to push for action now and for a bigger exemption. Congress does not have to act but the rules do provide an opportunity to do so. Remember that currently, the effective exemption amount for estate tax purposes is $2 million. In 2007, the estate and gift tax rates in excess of 45 percent were repealed. In 2009, the effective exemption amount is increased to $3.5 million. In 2010, the estate tax is repealed. In 2011, the exemption and top rate revert to $1 million and 55 percent, respectively. It should be noted that just because the placeholder is there, it does not mean the House Ways and Means Chairman Charles Rangel (D-NY) will go along with any proposal. Aside from the politics, revenue offsets are becoming more difficult to come by with each passing day.
Some of you reading the industry press may believe that the Right to Repair issue has simply become a war-of-words between the opponents and the proponents. While there is a certain amount of truth to that, the fact is that TIA and the other coalition members involved in this legislative battle are pressing forward on all fronts. We are garnering co-sponsors (now at 37) in the House, locking down support in the Senate for an introduction of a bill and continuing to bring the story to legislators and motor vehicle owners in many states.
We have recently come away from a Small Business Health Plan (SBHP) Coalition meeting and have a copy of the latest version of a SBHP compromise bill. We are not going to provide details because it is a very early draft and will probably not look anything like its current form if it is ever introduced. We will say that it is so far removed from earlier bills that have passed the House (but failed in the Senate) that one would be hard-pressed to believe that the earlier bills were attempting to address the same concerns as this latest version. We only point this out to illustrate the distance traveled and the distance left in this trip. From an association perspective we will probably give up some very substantial goals but we have been warning about this for some time now. On the other hand, if we are truly able to move towards a compromise solution to the health care dilemma facing most of you then we would call that progress. The struggle now becomes much more complicated with the 2008 election of our next President. Anyone following the race at all knows that the candidates are floating their own versions of the solution to the national health insurance debacle. The worst-case scenario (and most likely) is that the Congress will be unwilling and/or unable to pass a health plan bill until the new president is in office and that is the sad state of affairs that exemplifies the political realities of our country today. This is certainly nothing new, but we should be able to judge our leaders on their ability to engage new ideas and effect change.
The House should pass a slimmed down version of the energy bill this week. The Senate stripped out most of the tax provisions from the energy bill last week. Arguably, that might have the title of the bill that would have had the most immediate impact on small business. Some of the tax incentives for energy conservation and efficiency were for products made and sold by small business. The vehicle fuel efficiency standards are still in the bill and the biggest difference for small businesses is that instead of buying a “light” truck under the old rules, they will be buying a “work” truck under the new rules.
The big news for our industry is the inclusion in the bill of last year’s tire fuel efficiency rating system proposal put forth by the Rubber Manufacturers Association (RMA) and supported by TIA. The language should look very similar to this:
| Tire Fuel Efficiency Consumer Information |
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(a) Rulemaking |
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(1) Not later than 18 months after the date of enactment of this section, the Secretary of Transportation shall, after notice and opportunity for comment, promulgate rules establishing a national tire fuel efficiency consumer information program for tires designed for use on motor vehicles to educate consumers about the effect of tires on automobile fuel efficiency.
(2) The rulemaking shall include each of the following: |
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motor vehicle tires to assist consumers in making more educated tire purchasing decisions.
(B) Requirements for providing information to consumers, including information at the point of sale and other potential information dissemination methods, including the internet.
(C) Specifications for test methods for manufacturers to use in assessing and rating tires to avoid variation among test equipment and manufacturers.
(D) A national tire maintenance consumer education program including, information on tire inflation pressure, alignment, rotation, and tread wear to maximize fuel efficiency. |
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There is also a specific small business title in the bill. The provisions were modeled after legislation (S.1657) Senators John Kerry (D-MA), chairman of the Senate Small Business Committee and Olympia Snowe (R-ME), ranking Republican on the committee, introduced after two hearings the Committee on Small Business and Entrepreneurship held earlier this year, focusing on “what the government can do to help small businesses reduce their energy costs, become more energy efficient, and combat climate change.” The small business provisions in the energy bill will:
• Require the Small Business Administration (SBA) to implement within 90 days an energy efficiency program that was mandated in the 2005 Energy Policy Act;
• Establish an audit program to increase energy efficiency using Small Business Development Centers (SBDCs);
• Promote financing agreements between small businesses and utility companies to increase energy efficiency; and,
• Establish loans for small firms to invest in use of renewable sources of energy in their business.
There are two or three other provisions that have more to do with energy research and are not relevant to members. The bottom line here is that there could be some serious tax breaks here for the member diligent enough to investigate the new proposals.
We were hoping to have something to report on some broader Alternative Minimum Tax reform legislation and possibly some movement on one of the Energy bills and the CAFE standards debacle, but this past week on Capitol Hill has seen almost no action. Once again the Congress is bogged down in partisan battles over war funding legislation and, in fact, will be recessing from November 16 until December 3. That is not to say that there won’t be any negotiating going on but it leaves a lot of work before the holiday recess.
In other tax news there was a hearing held on November 15 in the full Senate Finance Committee on the Estate Tax. This one hits close to home for many of you and we would like to share some of the details from the hearing. We think you will relate to much of the discussion. Finance Committee Chairman Baucus (D-MT) opened the meeting by saying he supports full repeal but needs to get 60 votes to pass estate tax legislation. He also noted that for family businesses the preparation for the tax is often worse than the tax bill itself and that they fear having to liquidate their businesses because of the tax. He went on to say that he does not think planning needs to be so complex. Ranking Member Grassley (R-IA) stated that in 2011 all of the hard work done on this issue will be undone and it is an unjust tax. Warren Buffet (the second-wealthiest man in America) led the witness panel and talked about the increasing disparity between the super rich and those in the lower tax brackets.
There were a number of questions on how a reasonable compromise would be structured. During questioning Senator Kyl (R-AZ) made the point that when the CEO of a larger company dies, the company does not pay a tax. However, a family business pays that tax each time the head of a family dies. Salazar and Lincoln brought up the point that the status quo is unacceptable and that certainty is crucial for these family businesses. Sen. Cantwell specifically mentioned families needing to sell off parts of the business in order to pay the tax and others also noted that choices need to be made between investing business and paying to plan for the tax.
The Small Business Health Plan initiative is alive and well but part of the survival strategy for this initiative is adaptability. We are working with the House Small Business Committee to write new legislation and we think everyone has been brought to the table. No promises for a timetable but there is definitely an active effort to keep this going.
Right-to-Repair
We are very excited about a recent ruling by the European Commission regarding the sharing of repair information. The decision states that DaimlerChrysler, Fiat, General Motors, and Toyota are now legally bound to provide technical information about car repairs to all independent garages in the European Union. After a Commission investigation it was determined that inadequate access to the fullrange of technical information could drive repair facilities from the market. This statement alone gives credence to everything TIA has
written about and testified on for the Motor Vehicle Owner’s Right-to- Repair Act. The ruling should also give a boost to outgoing President Paul Hyatt’s right- to-repair efforts in Canada. He has tirelessly led the national fight in Ottawa and rest-assured will be heading back with this new ammunition.
In a strongly worded statement EU Competition Commissioner Neelie Kroes stated, “Consumers benefit from competition between repairers, through lower labor charges and cheaper spare parts. These decisions provide a concrete and timely solution to the problems faced by independent repairers, who might lose their ability to compete without access to the relevant technical information.” The Commission went on to site numerous surveys that studied the price differences between franchised and independent garages showing how much higher repairs cost at the franchised dealerships. Even as they acknowledged the proprietary properties of anti-theft and performance-limiting functions, the commission held that withholding information about those systems should not prevent independent repairers from performing repairs not directly related to those functions.
Waste Oil
This past week TIA has been on Capitol Hill pressing for the reintroduction of the bill that clarifies the date of the auto repair facility exemption from Superfund sites (Service Station Dealer Exemption). First introduced by Mike Capuano (D-MA), we appear to again have his support thanks (unfortunately) to the Beede Superfund site in his home state. Congressman Al Wynn (D-MD) is now Chairman of the Environment and Hazardous Materials subcommittee and will be instrumental in holding a hearing on the bill so we are working closely with his office. We also had an excellent visit with Rep. Pitts (D-PA), who also appeared to be very supportive. This issue will continue to plague our industry and TIA is working with other associations to identify future Superfund sites around the country that may snare tire dealers.
Internal Revenue Service
It appears that as long as there is some confusion at IRS about the Tariff # 4012.20.80 00, typically used on Customs forms to describe tire casings, importers will occasionally be subject to audits by the IRS to determine if the container contents are new tires, used tires or casings for retreading. TIA has begun what will probably be a very lengthy process to see if we can get an HTS number that will specifically refer to casings.
On a more positive note, the IRS has released a very informative CD and it’s worth giving them a little plug. The CD includes business tax forms, instructions and publications along with all of the tax law changes for 2007. The 2007 Small Business Resource Guide (SBRG) CD-ROM is a handy, interactive CD designed to equip small business owners with the skills and knowledge needed to successfully manage a business. In addition to providing a wealth of tax-related information, the CD contains a wide variety of Web links to various government agencies, business associations and IRS organizations. To order a copy of the 2007 SBRG CD, visit: http://www.irs.gov/businesses/small/article/0,,id=155439,00.html.
It’s been many years since an official with a rank as high as Jim Ports, Deputy Administrator at the National Highway Traffic Safety Administration (NHTSA), has addressed a TIA gathering, so you can imagine how delighted we are to have him at the Breakfast with the
President this year in Las Vegas. Folks that know him talk about his easy accessibility and we hope you take advantage of this opportunity to meet and greet the second-in-command of the organization that regulates so much of your business.
Many of you know that Congress is currently in recess and, typically, spending time with all of you in their home districts. There are a few pertinent issues that may be of interest from a small business perspective. Just before recess, the House was able to come to an agreement on a comprehensive energy bill. While you may remember that the House had originally passed an energy bill (H.R.6) in January, the Senate made substantial changes to that legislation which required the House to pass two new bills. The first legislation is H.R.3221, the New Direction for Energy Independence, National Security, and Consumer Protection Act. The bill, which passed by a vote of 241-172, is designed to promote energy conservation and renewable energy. One of the more contentious issues will be on how it will achieve renewable energy, particularly electricity. The provision, offered as an amendment by Representative Tom Udall (D-NM), will require electric suppliers, other than governmental entities and rural electric cooperatives, to provide at least 15 percent of their electricity using renewable energy resources by the year 2020. This amendment, which was blocked by the Senate when their energy bill was considered several months ago, was approved by a 220-119 vote. It faced opposition from utility trade organizations that will now face a stiff mandate that is not similarly applied to government entities.
The other energy bill, H.R.2776, the Renewable Energy and Energy Conservation Tax Act, passed by a much closer margin of 221-189. This legislation contains $16 billion worth of tax incentives to encourage the use of clean energy. Importantly, and surprisingly, the House bills do not provide for an increase to the corporate average fuel economy (CAFE) standards. According to House rules, the energy tax provision will be folded into the authorization bill and take its bill number. It will now head into conference with the Senate.
Another one to keep an eye on is the Department of Homeland Security. They will soon finalize regulations regarding employees with questionable identification. The regulation, which was originally issued for comment last year, established new scenarios in which an employer could be deemed to have “constructive knowledge” that the employee was an alien not authorized to work in the United States. The employer would have 60 days upon receiving a “no-match” letter to terminate the employee. The regulation is currently being reviewed by the Office of Management and Budget. With the failure of the Senate to reach a consensus on comprehensive immigration reform legislation, it is expected that Congress will act on some of the provisions in a piecemeal manner.
Massachusetts is currently leading the states charge for Right to Repair. The Association of Automotive Service Providers’ (AASP) president and TIA member Stan Morin has been a pit bull on the issue and has marshaled support from several other national groups as well as the New England Tire and Service Association (NETSA). Any member in Massachusetts that would like to jump into the fray is welcome to call Stan to get started. Let us know and we’ll put you in touch.
Manufacturers, tire dealers and other tire retailers in New York were handed an unexpected defeat this week when Governor Spitzer vetoed matching Assembly and Senate bills – A.7859 and S.5946. They were crafted to correct an egregious problem dating back to the passage of the Waste Tire Management and Recycling Act of 2003, which was enacted to ensure the proper management of waste tires in New York State. The law established a $2.50 charge on every new tire sold. Twenty-five cents of the $2.50 is given to the retailer to cover their costs associated with used tire disposal. The current law does not permit tire dealers in New York to add an additional charge that is incurred for tire disposal. This bill would allow tire retailers to include waste tire management and recycling costs in the selling price of the tire or make it a separate line item on the bill of up to $2.50 per tire. Currently, they cannot make it a separate line item and have to build it into the retail price of the tire.
For information on these issues contact Paul Fiore at 800-876-8372 ext. 104, or email pfiore@tireindustry.org.
At the risk of sounding like a broken record (skipping CD?), as we write, Congress is again attempting to legislate troop withdrawal from Iraq and the Republicans are starting to filibuster amendments. This familiar refrain has certainly impeded the passage of any significant legislation.
Since our last update, the biggest news with any bearing on our industry is the defeat of the immigration reform initiative in any form. It appears unlikely now that a complete overhaul of the immigration system will be adopted during this Congress. Admittedly, it was great to see Congress try to address the need for a common-sense employment verification system. The proposed system was far from perfect and we had real concerns about where Congress might go with the issue. However, we have to acknowledge that the current I-9
verification system is broken and must be overhauled. Equal Employment Opportunity laws and reliable verification of potential employee documents have posed quite a struggle, if not an outright clash, for some time now and we can only hope that this may be tackled in some fashion.
Here is another wonderful surprise for small business that was quietly introduced during the intense immigration debate – S.1681, the Family Leave Insurance Act. This bill seeks to provide up to eight (8!) weeks of paid leave to care for a newborn or recently adopted child; to care for a child, spouse or parent with a serious illness; or to care for their own serious illness. Under this bill, employers would pay leave benefits through their regular payroll and be reimbursed by the Family Leave Insurance Fund created by this legislation. Employees and employers would both be required to pay a premium into the fund – roughly 0.2 percent of the employee’s earnings. The benefits would be tiered based on the employee’s earned wages. Participation in this program is mandatory for businesses with over 50 employees. Those businesses with less than 50 employees may choose to opt into the program at a 50 percent discount (only pay 0.1 percent premiums).
The tire fuel efficiency rating system and consumer tire maintenance education program floated by RMA in S.5632 (109th congress) last year has resurfaced in H.R. 6, now known as the Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007. This piece of legislation has a long road ahead of it and contains numerous other energy-related provisions.
Several states have legislation pending that will see some activity and we will brief you next month – please stay tuned.
The efforts to permanently repeal the death tax (estate tax) failed on a vote to close debate (cloture). Our coalition is still pushing for the permanent repeal but Senator Kyl (R-AZ), the lead Republican negotiator on this legislation, has offered a compromise of $5 million-per-spouse exemption from the tax with a new rate of 15%, which is the same as the capital gains tax. However, Senator Olympia Snowe (R-ME) has put forward her own compromise that sets the exemption at $7 million for individual estates, with estates worth $7 million to $10 million taxed at 15 percent. At this time, it remains unclear which proposal will attract the necessary three Democrats, without losing any Republican Senators who support full repeal. It is also unclear how a compromise would proceed. As H.R. 8 was officially defeated, Senate leaders have several options for how to move the compromise forward. They can either have the House of Representatives introduce and pass the bill, amend an existing bill, or put it in a conference report. So, while the initial effort was defeated, it looks like this issue is far from dead and Senate Majority leadership has vowed to bring this back.
Small Business Health Plan Legislation
We dislike being the bearer of bad news but if you haven’t already heard, S. 1955 failed on a fairly close vote in the Senate on May 11th. All of us involved in the SBHP coalition were extremely disappointed after all the efforts extended over the last several years. The 55 votes we garnered for cloture (to end debate you need 60) tells us that we have made tremendous headway, we’ve come farther than we ever have before, and we will be back again with this crucial legislation.
Federal Government Contact Portal
This recent addition to TIA’s website resides on the homepage in the Government Affairs section. The Portal consists of two links that allow you to look up contact information for government officials in the U.S. and Canada. You can then send an email regarding topics of concern in our Industry. It’s as easy as pointing and clicking. Your voice is important, don’t let important legislation happen without your opinion being expressed.
The IRS, Imported Casings and Retreaders
We are hopeful this will be the last time we need to update members on the following casings issue.
During the second week of April, many casings importers received notice from the IRS requesting copies of their filings on IRS Form 720 (Quarterly Federal Excise Tax Return). If you import any new or retreaded tire you are already familiar with this form, but casings have been exempt from the Federal Excise Tax (FET) for decades, and businesses that import only casings that are strictly for retreading were not familiar with the form. It is surmised that since 9/11, the U.S. Customs Office has developed better reporting methods and sent over data to the IRS showing companies importing “tires” and the IRS quickly did some matching and found no 720’s filed for many of them.
Our office received several calls in a very short period of time and we contacted an IRS FET policy analyst who provided appropriate case history. We then sent copies of the IRS ruling that exempts casings from the FET to an IRS agent involved in this “program.” The IRS
quickly acknowledged that import casings are exempt from the FET but then things went from bad to worse. Due to some language contained in a Committee Conference Report (i.e. – when the Senate and the House negotiate to combine similar legislation) from the
Energy Act of 2005 that referred to casings that had already been subject to the FET, the IRS thought that a retreaded tire with an import casing as its base may be subject to the FET. IRS agents then began requesting that casings importers turn over their sales invoices and/or sales journals to track the casings to the importers.
In the meantime, TIA began in earnest to debate the issue with the IRS policy analyst, emphasizing that all of the court cases and rulings over the past decades clearly state that no domestically retreaded tires of any kind are subject to the FET. The bottom line is that as of Friday, April 27th, the IRS FET policy analyst received an internal Field Service Advisory dating from 1996 explaining that exact premise and agreed, in principle, to end the pursuit of the FET on retreaded tires made from imported casings. The analyst did tell us that as long as there is some question as to the content of the containers beyond the generic “tires,” there will be the occasional inquiry for proof that the business is only importing casings. One or two importers have been asked to provide invoices and/or sales journals to prove that they did, in fact, import casings that were sold to retreaders. This may continue occasionally until we are able to coordinate some communication between the IRS and the Customs Department about the numerical designation for casings. That should prove to be a challenge – our contact at the IRS told us he’s been trying to contact the appropriate folks at Customs for three weeks without a callback.
If you have any questions regarding this issue, please contact Paul Fiore at 800-876-8372, ext. 102, or email pfiore@tireindustry.org.
Casing Importers Please Take Note
During the second week of April many casings importers received notice from the IRS requesting copies of their filings on IRS Form 720 (Quarterly Federal Excise Tax Return). If you import any new or retreaded tire you are already familiar with this form but casings have been exempt from the Federal Excise Tax (FET) for decades, and these businesses that import only casings that are strictly for retreading were not familiar with the form. It is surmised that since 9/11 the U.S. Customs Office has developed better reporting methods and sent over data to the IRS showing companies importing “tires” and the IRS quickly did some matching and found no 720’s filed for many of them. Our office received several calls in a very short period of time and we contacted an IRS FET policy analyst who provided appropriate case history. We then sent copies of the IRS ruling that exempts casings from the FET to an IRS agent involved in this “program.” We are now cautiously optimistic and as of April 13th we believe the IRS actions against casings importers are on “hold.” TIA will be working with the IRS as this “program” review travels up the ladder to Washington.
Federal
It is somewhat futile to attempt a federal update when the Iraq war debate has the Congress gridlocked (and the minimum wage/tax relief legislation is now attached to the war funding resolution), but… Permanent Estate Tax Relief briefly raised its head in the Senate’s debate on its version of a budget resolution. Three amendments were offered to provide relief or repeal. All three were shot down. Those taking heat in this debate for not supporting estate tax relief said the future cuts could include estate tax relief. There is no guarantee estate tax relief would be included in that legislation; offsets would need to be found, and it would still need 60 votes to pass.
There are some discussions taking place with Congressional staff concerning Small Business Health Plans but it is all very much behind the scenes right now. There are still encouraging signs that the Congress could quickly get up to speed on Health Care if they break the war deadlock. Many folks are pinning their hopes on Senator Baucus as he has been very vocal about the issue.
We were very disappointed to hear the White House backpedaling on the immigration debate. If you will recall, the President’s ideas were more closely aligned with the Senate Democrats last year before the election. It now appears that they may be favoring the more draconian versions of immigration reform without amnesty provisions.
States
Maine, Massachusetts, New York, New Jersey, Florida, Oklahoma and Nevada – it’s not the answer to a trick question – these are the states that have now introduced some version of the Motor Vehicle Owners’ Right to Repair Act. If you think there is an automotive aftermarket association in your state that enjoys an excellent relationship with your state legislature and they have not introduced this legislation, please let us know, we want to help.
Massachusetts has introduced a bill to establish a “Tire Recycling Program” that calls for $5.00 per tire deposit that would be refunded to the consumer upon return of the used tire. In addition, the tire will have to be stamped or permanently marked in some fashion with the phrase “Massachusetts Tire Deposit.” This bill is very similar to the legislation that periodically crops up in Vermont and has repeatedly been defeated. For all the obvious reasons NETSA, TIA and RMA will be working to defeat this legislation.
If you have questions regarding any of these issues, call Paul Fiore at 800-876-8372, ext. 102, or e-mail pfiore@tireindustry.org.
The final negotiations over minimum wage/small business tax relief legislation appear to be stalled by expectations for a “pre-conference agreement.” The term refers to an informal process in the Senate for trying to get an understanding of the expected outcome of a conference committee before the committee formally meets. Senator Charles Grassley (R IA) wants an agreement on the minimum wage increase/small business tax relief conference. As previously reported, the Senate has passed an $8 billion tax relief package and the House has passed a $1 billion tax relief package. Senator Grassley fears that the official conference agreement will come in closer to the House number, which would leave the Republican minority with fewer options to change the outcome after the fact. The conference agreement will also reveal the negotiating skills of the chambers’ respective chairmen. We are in full support of the Senate version and are hoping for a positive outcome.
Used Tires
We are aware of a very troubling news story on used tires that the Houston, Texas, CBS affiliate filmed in response to an article that ran in the Detroit News. TIA Board Member Dick Gust was interviewed on camera and finessed our side of the story but the piece was clearly incendiary in nature. Please take a minute and see it yourself by going to the following link (http://www.khou.com/topstories/stories/khou070226_ac_usedtires.165faa42.html) and clicking on “Watch Video.” It will take a minute to load but it’s worth waiting to see what our industry will soon be up against. Sean Kane of Safety Research & Strategies, Inc. appears to be unhappy with the progress of tire-aging legislation and will now be using the “danger” of used tires to promote his cause. This issue will need to be closely watched.
Right to Repair
As we move the Right to Repair battle to the states, TIA President Paul Hyatt is pressing on in Canada from a national perspective and making great headway. Paul was copied on letter from an MP (equivalent to a Senator) to the president of Honda. The letter was very strong on requesting an explanation as to why the U.S. aftermarket has access to repair data and the Canadian aftermarket is shut out.We hope to be able to see the response. With 36 hours notice, TIA Board Member Bud Mullaney sent a fax requesting grassroots support to 150 New Jersey tire dealers and we are grateful for his assistance. The car dealers in New Jersey were able to lobby legislators there to postpone the full House vote on A-931.
We now have several nuisance bills in states around the country. We are assisting with efforts to deal with rolling-resistance in Connecticut and Maryland, and tire recycling in Vermont. In Maryland and Connecticut the tire efficiency bill appears to be defeated thanks to the help of TIA members, TIA Immediate Past President Bob Malerba, Past Board Member Anne Evans, and TIA and RMA staff. TIA Board Member Ken Brown and State Executive Director Dick Nordness alerted us to a bill to ban lead weights in Washington. The committee chairman introduced the bill and they found a tire dealer to testify in support. The dealer in question stated in the hearing that 13% of wheel weights fall off of wheels. We are simply dumb-founded how someone could be manipulated in such a fashion. This is definitely the work of an environmental group and we are trying to find out if they’re the same folks from Wisconsin that had all the suspect data a few years ago.
If you have any questions regarding any of these issues, please call Paul Fiore at (800) 876-8372, ext. 102, or email pfiore@tireindustry.org.
While there is still some talk of bi-partisan cooperation, the Democrats in the House have launched their “first 100 hours” legislative push without much input from the other side of the aisle. Things may, and I stress may, be a little more civil once these issues come over to the Senate. As it stands, the minimum wage increase that passed in the House is a clean bill with no sweeteners for small business. It is expected that the Senate version will contain some tax breaks.
We are in meetings with coalition members, attempting to revive Estate Tax reform and Small Business Health Plan initiatives, but it is too early to say what direction we will be headed. As stated previously, the Right to Repair emphasis has now shifted to the states and TIA has assisted in the efforts that have led to some version of this legislation being introduced in New Jersey, Maine and Massachusetts. Different aftermarket groups in many other states are shopping for sponsors in their state legislatures. TIA is looking at Tennessee with the Tennessee/Kentucky TDRA for some possibilities.
Speaking of states, the Vermont legislature has re-introduced their version of a tire recycling bill that is modeled on bottle deposit and return laws. H.27 has been altered slightly from last year’s bill but it is still one of the most cumbersome tire recycling propositions we have ever seen, and we think the opposition will be successful again this year.
This week TIA participated with SEMA, AAIA and NADA in a meeting at NHTSA headquarters in Washington, DC to discuss the recent proposal (September 18, 2006) to require all cars come equipped with Electronic Stability Control systems (ESC) beginning in 2009 (FMVSS 126). Our biggest fear is that we will see a repeat of the TPMS debacle, only this time around plus-sizing tires or modifying vehicle suspensions will result in illuminated ESC MILs or render ESC systems inoperative. We would like to report that NHTSA officials
were sympathetic to our concerns but we were bluntly told that this rulemaking was going forward because it is a no-brainer when it comes to saving lives. We don’t disagree, but we will continue to work towards some kind of solution that will not see thousands of our members struggling to supply consumers’ wants without the frustrations they are experiencing in servicing TPMS systems. All indications are that this fight may be another long and difficult road.
The lame-duck session of Congress just about lived up to its name. One bright spot for some of our members was the last-minute passage of the legislation to restore the Work Opportunity Tax Credit and the Welfare-to-Work tax benefits (we hope your business takes advantage of these great tax breaks).
While talk about health care can be heard from nearly every legislative office on Capitol Hill, we are of the opinion that small business will be on the defensive concerning the health care problem in the new session (110th). The only consensus is that Small Business Health Plan legislation will have little chance with Democratic leadership. There are many folks who believe real health care reform cannot happen without some new form of taxation on small business. These proponents will be actively lobbying sympathetic members of Congress. Expect to see many concessions to a more consumer-friendly approach to health care from our coalition – Coalition for Auto Repair Equality (CARE). From our perspective, any compromise legislation that genuinely reduces health care premiums is a winner. The path that this issue will take is very much up in the air.
An increase in the Federal minimum wage is gathering momentum. While some quarters consider it a foregone conclusion, we will still oppose the projected 41% increase as part of a large small-business coalition. As you all know, the many ramifications from an increase this size may be very harsh on your bottom line.
The many industry groups involved in the fight for the Motor Vehicle Owner’s Right to Repair Act are now gearing up for a state-by-state campaign. The goal is to introduce this legislation in as many states as possible. If your state group has not been contacted by TIA and you would like to participate in your state’s campaign, please contact Paul Fiore at 800-876-8372, ext. 102 or email pfiore@tireindustry.org.
It’s official – the Democrats have retaken the House and Senate (just in case you’ve been under a rock for the past week). Small Business Health Plans, Lawsuit Abuse Reform and Permanent Reform of the Estate Tax are no longer on the backburner – they are probably out of the kitchen for the foreseeable future. An increase in the Federal Minimum Wage will almost certainly be a top priority for the new majority leadership. The difficult piece of this election that will affect our members the most is the loss of Joe Barton (R-TX) as the Chairman of the House Energy and Commerce Committee. Most of you know the Chairman as the original sponsor (and champion) of H.R. 2048, the Motor Vehicle Owner’s Right to Repair Act. Rep. Dingell (D-MI) will become the new Chairman of Energy and Commerce and his influence will now be even stronger and he will defend his hometown of Detroit’s interests ferociously. Rep. Dingell is responsible for the loss of our Democratic co-sponsors on the Committee. It looks more and more like the Right to Repair battle will have to first be waged in the states.
Possibly one positive outcome of the new Democratic majority may be an immigration bill that would not be punitive to our members and that would also prime the pumps for more documented workers. In addition, with the advent of Permanent Estate Tax Reform off the table, Ways and Means and Finance Committee staffs are working toward a goal of late November to draft a clean tax extender bill that will largely follow the extender provisions of the recent Trifecta bill, H.R. 5970. Fortunately, this bi-partisan effort will contain the Work Opportunity Tax Credit (WOTC) and the Welfare-to-Work extensions. Votes on passage of the bill are not expected until early December. There will be some lobbying necessary to make sure the right people are behind this bill and the bi-partisan consensus holds, but we are optimistic. Many of our members can and should take advantage of these tax breaks if and when they are renewed. If you have any questions about the benefits of this tax break, please call Paul Fiore at 800-876-8372, ext. 102.
One last note – there is a coalition of Democrats in the House known as the “Blue-Dogs” who are fiscally conservative and more businessfriendly. We can only hope that their ranks will grow. 11-20-2006
Congress is now in recess for election campaigning and passed no significant legislation before they left. That being said, the Office of Management and Budget just released the numbers for the Federal deficit, and the predicted debt of $423 billion actually came in at $248 billion – $175 billion less than estimated. There will be much debate in the next month about the how’s and why’s but a few things to consider are the President’s tax cuts and growing Federal revenues. Business tax revenues are a major piece of that growth. In the fiscal year that ended September 30th, corporate income taxes grew from $278.3 billion in 2005 to $353.9 billion. There are questions that need to be answered about the cost of current policies and there will be much debate about how these numbers were calculated, but the bottom line from our perspective is that these facts and figures are great conversation starters for real debate about the upcoming election. Talk to your business associates, your families and your friends and then get out there and vote! Remember to please make an effort to contact your Senators and Representatives while they are campaigning in their (your) home district. Let them know your position on our bills and if you have any questions beforehand, feel free to call and talk to Paul Fiore.
The Government Affairs Committee recently held a conference call to discuss a couple of issues. We are endorsing the efforts of the New England Tire & Service Association (NETSA) and the Automotive Aftermarket Service Providers of Massachusetts to include any TPMS warning light as a safety inspection failure in the state of Massachusetts. We consider this a “no brainer” and will introduce a TIA resolution to support this initiative in any state that has a periodic vehicle safety inspection program in place.
DOT Numbers
We continue to hear whispers that the National Highway Traffic Safety Administration (NHTSA) remains concerned about import casings that do not have DOT numbers. As many of you know, any attempt to regulate these casings would have a significant impact and we will continue to monitor this closely.
Electronic Tire Registration
There appears to be a major movement by some industry folks to allow electronic tire registration as an alternative to the card/mail-in method now in place (electronic is currently “in addition to”). From our perspective it now makes sense and we would welcome your comments. If you would like to add to the conversation please contact Paul Fiore at your earliest convenience.
GOVERNMENT UPDATE
Congress has been back in session since September 5th, and has had no real focus, with fall campaigns keeping everyone preoccupied. We heard today that the group of Senators appointed as a tax “working group” by Majority Leader, Senator Bill Frist (R-TN), is still trying to come up with a tax cut “package” that can garner the necessary 60 votes on the Senate floor. This package would likely include some minimum wage increase. The new lure being touted appears to be some form of extending Medicare’s prescription drug program enrollment deadline, or freezing Medicare payments to physicians rather than allowing the scheduled reduction. In the meantime, if you are willing, we would love to lock down the related Work Opportunity Tax Credit (WOTC). PLEASE CONTINUE CONTACTING YOUR REPUBLICAN SENATORS ASKING THEM TO URGE SENATOR FRIST AND SENATOR GRASSLEY TO SUPPORT A MERGER AND PERMANENT EXTENSION OF WOTC AND WELFARETO- WORK (W-T-W) INSTEAD OF THE TWO YEAR EXTENSION OF THE HOUSE BILL.
Immigration
Various members in the House and Senate are muttering about immigration but we would now be very surprised if that bill went anywhere.
Market/Gasoline
As the average price for a gallon of gas continues to fall, could it be that the best action was to let the market run its course and not have the federal government interfere. As we see now, this appears to have been the correct solution. Any tinkering by the government with the gas tax or penalizing companies for turning a profit most likely would have resulted in unfortunate consequences. It is not surprising to see that this government is willing to allow the market to selfcorrect, but this lack of action may actually benefit all of us.
GAAS Scholarships
It’s that time of year when our membership in the Global Automotive Aftermarket Symposium (GAAS) gives us pleasure to announce the availability of the automotive scholarship applications. Please visit www.automotivescholarships.com for details.
Please plan on voting this November. If you’re not registered there is still time to do it. Most states have very accessible websites to assist with voter registration – just Google “your state” and “voter registration” (e.g. - MD voter registration) to get the URL. As a public service please encourage your employees to vote and help them if they need assistance.
GOVERNMENT UPDATE
The Congress is currently adjourned for summer recess (the month of August) which is officially called the “Summer District Work Period.” The only bone I'll throw them for that euphemism is that it is an election year and some of them are battling for their political lives right now. Here is a brief review of legislative activity before they adjourned.
Estate Tax/Minimum Wage
Our coalition pulled out all the stops on this key issue that affects so many of our members (as well as many other “small business” industries), but after voting on the motion to proceed to the so-called “trifecta bill,” H.R. 5970, the Estate Tax/Minimum Wage/Extenders bill, this is where we wound up. (You may recall that the Work Opportunity Tax Credit has been lumped with other “minor” tax issues and labeled extenders.) At the end of voting, the tally stood at 57 in favor vs. 41 against taking up the bill. Sixty votes were required to proceed, so the motion to take up the bill failed. As anticipated, at the end of the vote, Senator Frist changed his vote to “no” which allows him to bring up the bill again. This made the final vote 56-42. We are disappointed that Senator Frist, after his second defeat this year on the estate tax, did not move to pass the extenders separately before adjourning. We can expect that his next try (probably very near to adjournment in late September or early October) will be his last. Should that attempt also fail, the result will be a bill to enact the extenders as a separate measure. When that moment arrives, we in the Coalition need to be ready with an amendment to make WOTC permanent.
Small Business Health Plans/Immigration
There has been no activity on either of these issues since the last TIA Fax, with the exception of in-district posturing on immigration (both sides).
Right to Repair
We are working in-district as often as possible, continuing to push for co-sponsorship. The need to report repair information gaps is still a top priority. Please contact Paul Fiore at 1 800-876-8372, ext.102, or by e-mail at pfiore@tireindustry.org, with any questions.
Death Tax/WOTC
Senate leader Bill Frist (R-TN), losing the vote to close debate, abandoned full repeal of the existing estate tax. The House swiftly passed the Permanent Estate Tax Relief bill, H. R. 5638, which while not fully repealing the tax, would permanently reduce the death tax rate (which otherwise goes up to 55% in 2011) and increase the amount of estate exempt from the tax to $5 million ($10 million per couple). This is a compromise we can live with but there is tremendous uncertainty as to how this will play out.
Other tax issues that should be on the front burners continue to be shuffled around the stove. The Alternative Minimum Tax (AMT), which is hitting an increasing number of middle class taxpayers has been the attention-getter and we probably won’t see an extension of the Work Opportunity Tax Credit until issues like this are resolved or agreed to postpone. To complicate the whole tax picture, Sen. Grassley (R-IA), Chairman of the Senate Finance Committee, is anxious to revive efforts to overhaul the entire tax code.
Immigration
There has been no real movement on immigration reform (see last month’s TIA FAX) other than a series of hearings around the country by proponents of the House and Senate bills. This effort by both sides to win the public’s sentiment in this format is probably a waste of taxpayer’s money but some would argue that it is the only way to bring the debate into the public forum. How many citizens will attend hearings on both sides of the issue? These shows will continue over the August recess.
Small Business Health Plan (SBHP)
Senator Mike Enzi has not given up hope for a vote on Small Business Health Plan legislation. The coalition will be meeting this month to shore up support and see if something can be done during the upcoming short sessions.
Right to Repair
TIA just spent the day on Capitol Hill trying to gather more co-sponsors for H.R. 2048, the Motor Vehicle Owner’s Right to Repair Act. During our visits to individual offices we were asked by every staffer to address what TIA now refers to as the credibility issue. Even the congressional staffers sympathetic to the cause are stressing the need for the proponents of this bill to get some solid data in place that documents the repair information problem. To that end, if you are a repair facility and have experienced problems repairing vehicles due to a lack of manufacturer information, please utilize the form that appears on TIA’s website (click here to download Form). This will be a great contribution to our legislative efforts on this critical issue.
Death Tax 6-19-2006
The efforts to permanently repeal the death tax (estate tax) failed on a vote to close debate (cloture). Our coalition is still pushing for the permanent repeal but Senator Kyl (R-AZ), the lead Republican negotiator on this legislation, has offered a compromise of $5 million-per-spouse exemption from the tax with a new rate of 15%, which is the same as the capital gains tax. However, Senator Olympia Snowe (R-ME) has put forward her own compromise that sets the exemption at $7 million for individual estates, with estates worth $7 million to $10 million taxed at 15 percent. At this time, it remains unclear which proposal will attract the necessary three Democrats, without losing any Republican Senators who support full repeal. It is also unclear how a compromise would proceed. As H.R. 8 was officially defeated, Senate leaders have several options for how to move the compromise forward. They can either have the House of Representatives introduce and pass the bill, amend an existing bill, or put it in a conference report. So, while the initial effort was defeated, it looks like this issue is far from dead and Senate Majority leadership has vowed to bring this back.
Small Business Health Plan Legislation 6-19-2006
We dislike being the bearer of bad news but if you haven’t already heard, S. 1955 failed on a fairly close vote in the Senate on May 11th. All of us involved in the SBHP coalition were extremely disappointed after all the efforts extended over the last several years. The 55 votes we garnered for cloture (to end debate you need 60) tells us that we have made tremendous headway, we’ve come farther than we ever have before, and we will be back again with this crucial legislation.
Federal Government Contact Portal 6-19-2006
This recent addition to TIA’s website resides on the homepage in the Government Affairs section. The Portal consists of two links that allow you to look up contact information for government officials in the U.S. and Canada. You can then send an email regarding topics of concern in our Industry. It’s as easy as pointing and clicking. Your voice is important, don’t let important legislation happen without your opinion being expressed.
Immigration 6-1-2006
Heading into the Memorial Day recess, the Senate completed work on S.2611, the Comprehensive Immigration Reform Act, by a bipartisan vote of 62-36. However, heading into deliberations within the conference committee, it is very significant that 32 Republicans voted against this measure. As such, supporters of the House-passed immigration bill now have cause to believe that their more enforcement-heavy legislation is the one that should prevail over the Senate's version, which only four Democrats opposed.
The most significant difference between the House and Senate immigration bills is that the House version does not contain a path to citizenship for illegal immigrants or a guest worker provision. Instead it consists of harsh penalties for employers who hire illegal immigrants -- those in America illegally, and those who assist immigrants in entering the U.S. illegally.
During deliberations of S.2611, the Senate adopted an amendment offered by Senator Charles Grassley (R-IA), which creates a new worker verification system for employers. Under current law, employers must examine one or more documents from a list of nearly 30 different documents. If the document provided by the employee appears to be genuine, then the employer has met his obligation. Furthermore, any requests by the employer to view other employee documents can be considered employment discrimination.
Grassley's amendment would require employers to enter the social security number or immigrant identification number into a new computerized system created by the Department of Homeland Security (DHS) within three days of the hiring. If the applicants are determined to be illegal by DHS, then they must be fired. The applicant would then have ten days to challenge the ruling. If DHS fails to confirm their ruling within 30 days, then the worker would be allowed to remain at his or her job.
While it remains doubtful that this legislation will come to pass, TIA has some obvious concerns with the employer penalty provisions as they stand in the House bill. Our concern is that the climate is strong for “something to be done about immigration.”
Death Tax 6-1-2006
The efforts to permanently repeal the death tax (Estate Tax) appear headed for a showdown in the next two weeks. Our coalition is still pushing for the permanent repeal, but Senator Kyl (R-AZ), the lead Republican negotiator on this legislation, has offered a compromise of $5 million-per-spouse exemption from the tax with a new rate of 15%, which is the same as the capital gains tax. This is another bill that will shift with the winds as it gets closer to a vote.
Small Business Health Plan Legislation (SBHP) 6-1-2006
We dislike being the bearer of bad news but if you haven’t already heard, S.1955 failed on a fairly close vote in the Senate on May 11th. Everyone involved in the SBHP coalition were extremely disappointed after all the efforts extended over the last several years. The 55 votes we garnered for cloture (to end debate you need 60) tells us that we have made tremendous headway. We’ve come farther than we ever have before, and we will be back again with this crucial legislation.
Right to Repair 6-1-2006
The Motor Vehicle Owner’s Right to Repair Act passed a crucial subcommittee vote last week on a close partisan margin. After the last hearing it became apparent that members of Congress have no real understanding of what our folks do everyday. The concern that there aren’t really a substantial number of complaints generated about a lack of information ignores repair shop reality. Our members live and work in a time-is-money world and quickly solve a problem to the best of their and the customer’s satisfaction and move on. That solution may have involved towing a vehicle to the auto dealer’s shop or tracking down someone’s best friend who happens to be a service writer at the auto dealer for critical information. This is not well understood on Capitol Hill. We have much more work cut out for us on this issue.
GOVERNMENT UPDATE 5/15/2006
The activity in the Senate right now is enough to keep your head spinning and your mind reeling if you actually try and follow the attempt to get a tax bill done. There are so many proposals and amendments being offered on an hourly basis that it really is difficult to keep track. The waters are further muddied by the frenzied attempt by both parties to respond to the growing consumer backlash against the high price of gasoline. Just last weekend there was a package offered by the Senate majority leadership that included a $100.00 gas tax rebate to consumers (this piece is still alive), and to pay for it they were considering a repeal of the Last Out – First In (LIFO) method of inventory accounting. This method of accounting has been around for years now and would have been very costly to most of you. Just ask your accountant. Fortunately, there was an outcry from the business community (TIA included) and the proposal was dropped, but there was a hint that the Senate would take a longer look at numbers involved later this year.
Small Business Health Plan formerly AHP's 5/15/2006
There has been non-stop movement over the last couple of days that will be critical for the passage of Small Business Health Plan (SBHP) legislation (formerly known as Association Health Plans - AHP). You may recall that S.1955 was introduced by Senate Health, Education, Labor and Pension Committee Chairman Michael Enzi (R-WY) as a
compromise bill and after many changes (even more compromise) was passed out of committee on an 11-9 vote. More than likely we will see the bill open up on the Senate floor and the all-out assault by Democrats will probably include amending the bill to death. TIA has been on the Hill knocking on the doors of key Senators and we will be ramping up our efforts to engage membership for a true grassroots effort to get this done. If you, or anyone you know, have a working relationship with a Governor or a US Senator, please get in touch with Paul Fiore at 800-876-8372 ext. 102.
The Motor Vehicle Owner’s Right to Repair Act 5/15/2006
The Motor Vehicle Owner’s Right to Repair Act (H.R. 2048) now has 102 co-sponsors and this milestone was achieved with the direct help of TIA and our members. It appears that congressional support for this bill will continue to grow. There are indications that we may be going to mark-up on H.R. 2048 in a week or two. There is one more hearing scheduled on May 17th in the subcommittee on Commerce, Trade, and Consumer Protection. The grassroots work on this bill is an excellent example of what small business can accomplish when there is true agreement on a critical issue.
National Automotive Service Task Force (NASTF) 3/20/2006
Our friends at the National Automotive Service Task Force (NASTF) have been misbehaving again. You may remember that this is the organization set up by the manufacturers to help disseminate repair information from a central reference. NASTF is recognized as a major stakeholder in the Motor Vehicle Owner’s Right to Repair Act push. They are on the opposing side of TIA and other aftermarket associations with the exception of the Automotive Service Association (ASA). While setting up meetings around the country, they have been quietly telling members of Congress that everything is just rosy and that there is no need for legislation anymore. We hope this deception will finally force Chairman Barton (R-TX) to bring the bill to mark-up.
Work Opportunity Tax Credit (WOTC) 3/20/2006
The struggle to re-authorize the Work Opportunity Tax Credit (WOTC)is literally an hour-by-hour exercise right now as it is central to the final tax bill negotiations along with Alternative Minimum Tax (AMT) relief and the top priority extenders capital gains and dividends. Senate Finance Committee Chairman Charles Grassley said the $70 billion limit for tax relief may require dropping tax extenders from the tax reconciliation bill (H. R. 4297) and moving them in a separate bill. Grassley said it would be difficult for the tax reconciliation bill to pass the Senate without AMT relief. While he said no decisions have been made, he seems intent on pushing for AMT relief in Conference.
Vermont Bill H.146 3/20/2006
On February 17th the Vermont legislature was scheduled to hear testimony on H.146. The bill would have assessed a deposit of between $5.00 and $10.00 each on the sale of new motor vehicle tires, and required that refunds be paid on delivery of these tires for disposal. The bill also proposed to require retail sellers to accept labeled tires and pay the amount of the deposit, and it requires tire manufacturers or distributors to pay the amount of the deposit, plus a handling fee. TIA worked with the Vermont Retailers Association, the New England Tire Dealers Association, and RMA to stop any movement on this bill. Mike Blumenthal from RMA also promised to meet with the high school student organization that spear-headed this legislation.
Connecticut Bill H.B.5556 3/20/2006
TIA and SEMA sent a jointly signed letter opposing H.B.5556 in the Connecticut legislature. H.B.5556 requires the development of a statewide program to mandate that replacement tires for passenger cars and light trucks are as energy efficient as tires sold as original equipment on these vehicles. SEMA and TIA recommend that the bill be rejected since the replacement tire efficiency program conflicts with federal law, is anti-consumer and anti small business, and would require a substantial appropriation. We are also working with the Connecticut Tire Dealers Association to encourage dealers to attend the hearing in opposition.
TIRE AGING 2/17/2006
Sean Cane of Safety Research & Strategies is still the champion of the tire aging issue. Although it is rumored that Sean and his company are connected to the trial lawyers’ community, TIA cannot ignore the effectiveness of this advocate. He does an excellent job of keeping this issue in the media’s eye. In the January 2006 issue of his publication, The Safety Record, he writes about Bridgestone Firestone being the latest company to recommend (by way of a Technical Bulletin) the replacement of tires by age (10 years-old from BFS). The list of organizations that have made tire aging recommendations also includes the Japan Automotive Tyre Manufacturers Association (the basis for the BFS move), Ford Motor Company and DaimlerChrysler (after 6 years). Mr. Kane states that the British Rubber Manufacturers Association also made a similar recommendation in 2001 but never formally released it.
The article points to the difference of opinion that exists concerning research and technical data supporting these recommendations. Ford and DaimlerChrysler are mentioned as basing their decisions on research conducted by their own companies, but the article also quotes BFS in their bulletin stating that “it is not aware of technical data that supports a specific tire service life.” This reflects RMA’s official position that there is no scientific evidence for an expiration date. Mr. Kane then goes on to claim that the tire industry has “circled the wagons” and taken a very “conservative attitude.” While TIA has been very strong on this issue, it is beginning to look like Congress may feel compelled to act. If that is the case, we are committed to an active role in this legislative process.
TIA was on Capitol Hill February 13th lobbying for co-sponsorship of the Motor Vehicle Owner’s Right to Repair Act. We are still awaiting news of a possible mark-up, but in the meantime we visited the offices of Rep. Ed Whitfield (R-KY, 1st) from the Hopkinsville area, Rep. Steve Buyer (R-IN, 4th) from the Indianapolis area, Rep. Sherrod Brown (D-OH, 13th) from the Akron area, and Rep. Barbara Cubin (R-WY, At Large). If your business (or your residence) is in any of those areas, please take a minute to call that congressional office, tell them how important H.R.2048, the Right to Repair Act, is to your business, and ask for their co-sponsorship on the bill. This is a fairly easy process.
If you have any questions or need assistance, please feel free to call Paul Fiore at 800-876-8372, ext. 102.
GOVERNMENT UPDATE 1/16/2006
Things are slow in Washington, DC with Congress adjourned until January 31, 2006. However, the bureaucracies never stop and occasionally that works to TIA’s benefit. The National Highway Traffic Safety Administration (NHTSA) just announced the acceptance of a petition for reconsideration by Denman Tire that was accompanied with a letter of support from TIA. Denman and TIA were seeking the exclusion of deep-tread specialty tires from Federal Motor Vehicle Safety Standard (FMVSS) 139 to a less strenuous FMVSS 119 or 109. The petition argued that the cost of compliance testing and certification would bankrupt Denman and the agency ultimately concluded that FMVSS 139 is impractical for deep-tread specialty tires with tread depth of at least 18/32 and will accept testing results based on FMVSS 119. Good news from NHTSA!
In the meantime, while we are hoping for a mark-up sometime in February on H.R. 2048, the Right to Repair bill, there are some internal debates going on within the National Automotive Service Task Force (NASTF). This group was set up by the auto manufacturers early on in the Right to Repair battle as a response to the service (repair) industry call for change. They are the clearing house for all of the manufacturer service websites and the investigative body for any complaints about lack of service information. Under pressure, they are trying to reorganize their governing board to be more accommodating to the repair sector.
Paul Fiore and Kevin Rohlwing met with NHTSA on January 10th, seeking further clarification on the department’s interpretation of the Federal Excise Tax (FET) issue regarding load markings (single vs. dual) and its particular effect on the intermodal tire industry.
New Director of Government and Business Relations (Dec. 19, 2005)
Paul Fiore, TIA’s current director of business development, will take on a new position as director of government and business relations. Paul will replace the vacancy left by Becky MacDicken and will retain his supervisory responsibility for TIA’s membership programs and
services. Paul has been in the automotive market for over 25 years. Besides owning a repair facility for a majority of his career, he has also served on numerous industry councils and committees. He served as president of a regional trade association where he was
also chairman of the legislative committee, and has been active in government relations at the state and federal levels.
Gulf Opportunity Zone Act of 2005 (Dec. 19, 2005)
As Congress struggles with the budget reconciliation bill, (spending reductions and tax relief) there are several other issues on the agenda, but one in particular may be of some interest to TIA members who are located in the Gulf area. One of the provisions in the “Gulf Opportunity Zone Act of 2005” (H. R. 440) would allow businesses in the “zone” with less than 200 employees to claim an employee retention tax credit of up to $2,400 per employee if the firm keeps workers on the payroll while the business is inoperable through December 31, 2005.
Before Recess (Dec. 19, 2005)
It is doubtful that there will be any significant activity on Association Health Plan legislation or the Motor Vehicle Owner’s Right to Repair Act before recess. As of this date there has been no mark up on the Right to Repair Act bill, but the coalition has been keeping the pressure on with a flurry of media activity. It would not be a stretch to say that many members of Congress that support the Right to Repair bill would still prefer to see a compromise worked out. Currently, there is an effort to reorganize the National Automotive Service Task Force (NASTF) with most coalition members unable to create a new governing board that would satisfy everyone. There is even disagreement about which
groups should participate in the discussion. We’ll keep you informed.
Right to Repair Hearing (Nov. 21, 2005)
The Commerce, Trade & Consumer Protection Subcommittee held a hearing on Thursday, November 10, on the Right to Repair Act. TIA member Robert Everett of Bayville Auto Care of Bayville, New Jersey testified in support of the Right to Repair legislation and did an outstanding job. Mr. Everett was there as an NFIB, TIA and ASA member. His testimony, and that of other supporters, helped move the issue forward. Since negotiations have broken down, Chairman Barton is still signaling that there will be a markup of legislation in early December. For information on the Right to Repair in Canada, go to: www.controlledautorepair.com
Association Health Plan Legislation (Nov. 21, 2005)
Chairman of the Senate Committee on Health, Education, Labor and Pensions, Mike Enzi, has unveiled his plan for reforming the health care system. The intent is to reduce costs and improve access in the health insurance marketplace, principally, though not exclusively, in the small group market. Enzi’s overall approach is to blend a modified version of the current AHP legislation (S. 406, Snowe/Talent) with several additional reform initiatives applicable not just to association plans, but also to the wider marketplace.
The fundamental principles are:
- A meaningful role for associations, but on a level playing field.
- Streamlining of the current hodgepodge of varying state regulation.
- However, also preserve a strong state role in insurance oversight and consumer protection.
- Make lower-cost health plan options available.
- Achieve meaningful reform without a big price tag that could cloud prospects for passage.
TIA is examining this new proposal and has not yet supported it. But health care reform remains TIA’s top legislative concern and this compromise bill will get the issue on the table for discussion in the Senate, a positive step forward.
Becky MacDicken Leaving TIA (Nov. 21, 2005)
After 5-1/2 years with the Association, TIA Director of Government Affairs, Becky MacDicken, is leaving. She is relocating from the Washington, DC area to Mechanicsburg, Pennsylvania to work with the state government on a new initiative regarding financial education and the business community. Becky’s last day with TIA is December 2, 2005. We wish Becky well in all of her future endeavors.
FET
TIA Staff Members, Becky MacDicken and Kevin Rohlwing, met with the Senate Finance Committee and the House Ways and Means Committee regarding recent changes to the Federal Excise Tax. The Senate staff seems willing to talk about “fixes” if the House will and
has also mentioned setting up a meeting with IRS Audit division to discuss the intent of the retroactive changes with them. TIA is hopeful that they will forgive the back taxes along with fixing the definition of super singles. Stay tuned.
Right to Repair
Negotiations between the automotive manufacturers and the aftermarket industry have reportedly broken down. These two groups were trying to come to an agreement about the “right to repair” issue without passing legislation. Chairman Barton has said he’d like to see
if negotiations can still be fruitful but if not, he will markup his Right to Repair bill in the House Commerce Committee. TIA also has the Senate poised and ready to introduce a companion bill. For information on the Right to Repair in Canada, go to: www.controlledautorepair.com
Association Health Plans & Estate Tax Issues Likely Dead for 2005 – (Sept 19, 2005) Senate action on AHP and Estate or “Death” Tax legislation is unlikely to occur this year. Due to Hurricane Katrina and the death of Supreme Court Chief Justice William Rehnquist, the Senate will be dealing with recovery and rebuilding efforts in the areas hardest hit by the hurricane and the nomination process for not one, but two new Supreme Court justices, including a new Chief Justice. AHPs are being discussed at great length on the Hill and out in the field, but Chairman of the Senate Health, Education, Labor and Pensions Committee Mike Enzi (R-WY) is looking for alternatives to the TIA-supported legislation. We anticipate a proposal late this year or early next year to consider. Death Tax relief will probably also become a victim of the flurry of unexpected activity on the Hill this year.
Energy Bill - (Aug. 18, 2005) Congress passed the Energy Bill before leaving for August recess and the President just signed it into law last week. Among the many thousands of provisions, there is a revision to the Federal Excise Tax on Truck Tires. The language passed in the Energy bill states that the new definition of super singles, “…shall not include any tire designed for steering.” In effect, super singles designed for steer axles will not be considered “super singles” and will be taxed at the higher rate of 9.45 cents for every ten pounds over 3,500 pounds of load carrying capacity (the radial tire rate) rather than the lower super-single rate of 4.725 cents for every ten pounds over 3,500 pounds of load carrying capacity. This change in the FET is actually retroactive to January 1, 2005.
A tire fuel efficiency provision that had been in the Senate version of the bill was eliminated in Congress due to the actions of TIA, RMA and SEMA. This was a victory for TIA and the tire industry. Senator Schumer had wanted to mandate that replacement tires be as fuel efficient as the OE tires.
Association Health Plans (AHP) - (Aug. 18, 2005) The House of Representatives passed the Association Health Plan legislation on Tuesday, July 26. This was no surprise as the bill has passed the House eight previous times. The margin of victory was the largest to date, however, 263-165 with every Republican and 36 Democrats voting in favor of the bill. TIA is hoping for a Senate vote this fall but things seem to have stalled with the Chairman of the Health, Education, Labor and Pension Committee (Mike Enzi - R-WY) wanting a compromise on the bill. What that compromise is to be is still unclear.
Death Tax Repeal - The Senate was originally scheduled to take a vote on the Death Tax Repeal initiative before the August recess but due to politics, the vote will not take place until September, when Congress returns from recess. Senator Grassley, Chairman of the Senate Finance Committee, was reluctant to bring the bill for a vote without a clear victory ahead. Behind the scenes compromises are being discussed which would provide small business relief without permanently repealing the tax.
Aftermarket Coalition Meeting — TIA met with nine other automotive aftermarket groups to discuss working together on various issues in Congress. The coalition is made up of the Automotive Aftermarket Industry Association (AAIA), Automotive Engine Rebuilders Association (AERA), Automotive Parts Remanufacturers Association (APRA), Automotive Service Association (ASA), Automotive Warehouse Distributors Association (AWDA), Motor and Equipment Manufacturers Association (MEMA), Production Engine Remanufacturers Association (PERA), Specialty Equipment Market Association (SEMA), Service Station Dealers of America (SSDA), and TIA. The coalition represents the entire scope of the U.S. motor vehicle aftermarket along with the suppliers to the auto manufacturers. In addition, the coalition represents more than 3.7 million employees and 500,000 businesses and over $257 billion in annual sales. At the first meeting it was agreed that letters from the coalition would go out to Capitol Hill on AHPs, Estate Tax, the Lawsuit Abuse Reduction Act and other issues in the future.
TIA Comments on Right to Rep 
