July 13, 2015 Weekly Legislative Update

FEDERAL TIRE LEGISLATION PROMOTES SAFETY, FUEL EFFICIENCY AND COMPETITIVENESS

RMA Supports Measure Sponsored by Sen. Lindsey Graham (RMA Press Release)

WASHINGTON, D.C., July 10, 2015 -- Congress will consider legislation to create minimum tire performance standards for tire fuel efficiency and wet traction; improve manufacturers’ ability to contact consumers in the event of a tire recall; and create a web-based tool for consumers and tire dealers to more easily determine whether a tire is subject to a safety recall.

Sen. Lindsey Graham (R-SC) this week introduced the Tire Efficiency, Safety and Registration Act, S.1741.  Sen. Sherrod Brown (D-OH) and Sen. Roger Wicker (R-MS) cosponsored the bill.   S. 1741 is strongly supported by the Rubber Manufacturers Association (RMA), the national trade association for tire manufacturers that produce tires in the U.S.

“This legislation will significantly help improve consumer safety, vehicle fuel economy and industry global competitiveness as well as regulatory consistency,” said Dan Zielinski, RMA senior vice president, public affairs.  “We applaud Sen. Graham for taking a leadership role in Congress to introduce this measure and appreciate Sen. Brown and Sen. Wicker for their support.”

The bill contains three sections:

Minimum Tire Performance Standards for fuel efficiency and Wet Traction

Establishing a minimum tire fuel efficiency performance standard will eliminate the least fuel efficient tires from the passenger tire market, while a wet traction performance standard will help ensure  tire fuel efficiency improvements are not achieved that the expense of wet traction performance and safety.

*   Several other nations already have adopted similar standards. Adopting these standards helps to ensure that the United States does not become a dumping ground for lower performing tires.

 “RMA members support these performance standards to help consumers and the nation conserve fuel without compromising wet traction safety performance,” Zielinski said.

Improving Consumer Notification of Tire Recalls

S. 1741 will require tire sellers to register tires to boost registration rates and improve the ability of tire manufacturers to directly notify consumers of a tire recall so that tires with potential safety issues can be quickly removed from service and replaced.

In 1982, federal law was changed from requiring tire sellers to register tires at point of sale to only requiring tire sellers to provide the means to register tires to consumers.  This change resulted in the tire registration rate dropping from nearly 50 percent to about 15 percent.

Tire manufacturers are currently required to notify consumers who may be affected by a tire recall.  But this is made difficult by the current low tire registration rates. Tire dealers now are required only to provide a paper registration card to every consumer who purchases new tires to document the tire identification number (TIN).  The consumer then should complete the card with contact information and mail it to the tire manufacturer who keeps the information in the event of a tire recall

By requiring registration at the point of sale, registration rates will increase and manufacturers will be better able to meet their requirement to notify consumers of a tire recall.

Create a consumer-friendly lookup tool to search tire recalls

All tire recalls are reported to the National Highway Traffic Safety Administration (NHTSA) yet the agency does not maintain an easy, consumer-friendly database to search for tire recall information.

S. 1741 would require NHTSA to develop a tire recall lookup tool searchable by TIN to enable consumers and tire sellers to quickly determine whether a tire is subject to a recall.

A searchable system for automobile recalls using the Vehicle Identification Number (VIN) is available on NHTSA’s web site.

“Together, these provisions will improve the ability for tire manufacturers to notify consumers in the event of a tire recall,  boost the competitiveness of the U.S. tire manufacturing industry and help to harmonize an often complicated global regulatory structure,” Zielinski said.  “We will continue to work with Sens. Graham, Brown, Wicker and others to enact this measure.”

TIA RESPONDS TO RMA PRESS RELEASE

The Tire Industry Association (TIA) is going to do everything in its power to defeat legislation aimed at making tire registration mandatory.

And that legislation exists. Late last week, Sen. Lindsey Graham (R-SC) introduced S.1741 into the Senate. Also known as the Tire Efficiency, Safety and Registration Act, the bill would require tire sellers to register tires.

The bill, supported by the Rubber Manufacturers Association (RMA), does not address whether or not the consumer information collected at the point-of-sale would be available to the tire manufacturers – a hot-button issue with tire dealers.

“We are 100% against mandatory tire registration,” says Roy Littlefield, Executive Vice President of TIA. “We plan to fight it. We also plan to reach out to the industry and talk about it.”

That includes the RMA, which Littlefield says has not shown any desire to work with TIA on this issue.

“I’ve been around since 1979, and I can’t believe that on a market solution, the RMA and tire manufacturers are supporting legislative action.”

The RMA believes tire registration is too low, and claims it has dropped from “nearly 50% to about 15%” since voluntary registration became law in 1982. However, Littlefield says that number doesn’t take into account tire dealers who register the tires and keep the information to themselves. In case of a recall, they contact the affected consumers directly.

Mandatory tire registration is only part of S.1741. In its current form, the legislation also would 1) create minimum tire performance standards for tire fuel efficiency and wet traction; and 2) create a Web-based tool for consumers and tire dealers to more easily determine whether or not a tire is subject to a safety recall.

Although Littlefield is not sure legislation to create the performance standards and Web-based tool are necessary given the power the National Highway Traffic Safety Administration was granted in 2007, he says TIA would not oppose them.

TIA is urging all retailers to contact their legislators and tell them that they strongly oppose the tire registration provision contained in S.1741.

For more information on the issue of voluntary vs. mandatory tire registration, check out these links:

http://www.moderntiredealer.com/news/story/2015/07/it-s-a-go-rma-supports-new-tire-registration-legislation.aspx

http://www.moderntiredealer.com/article/story/2015/06/tire-registration-and-legislation.aspx

SEVERAL BILLS ON INFRASTRUCTURE FUNDING PROPOSED

As the July 31 expiration of transportation funding quickly approaches, a flurry of activities and proposals dominate Congressional activity. Leaders of both political parties in the House and Senate have vowed to pass legislation to extend the Highway Trust Fund – whether it be a short-term or long-term bill.

Long-Term Legislation

On July 8, U.S. Senators Rob Portman (R-OH) and Charles Schumer (D-NY) proposed to revamp taxes on foreign earnings of U.S. Corporations – a proposal TIA has been pushing on Capitol Hill – calling for low rates on repatriated profits to generate new revenues to pay for a multiyear transportation bill.

Secretary of Transportation Anthony Foxx asserted that President Obama has a “strong preference’ for a long-term highway bill and that if the Senate passes a simple extension, the President could veto the measure.

RYAN HOPES FOR QUICK ACTION ON TRANSPORTATION

Congressman Paul Ryan tells Politico he’d like nothing better than to have an extenders bill drawn up this month and voted on after Labor Day.

Ryan disclosed that House leaders plan to pass this week a bill providing $8 billion to finance the Highway Trust Fund through December 31st, giving Congress more time to weigh competing options for highway funding long-range.

If the Senate goes along with deferring action on a long-range Highway bill, the way will be clear for Ryan and Hatch to turn the attention of their committees to WOTC, the VOW Act tax credits for hiring veterans, and other tax extenders with the goal of producing a bill that can be voted on after Labor Day. 

Given the large number of extenders, members of Ways and Means and Finance can propose a slew of amendments and the process of marking up an extenders bill can be drawn out till amendments are disposed of.  Should Ryan and Hatch begin markup of the extenders the third week of July, a committee product ready for floor vote might not be completed till July 30 or later.

(Congress will most likely adjourn for summer recess on July 30 and not return until September 8th.)

Ryan commented he’d like to make some of the extenders permanent—without naming which.

We remain cautiously optimistic that our message for permanent WOTC is getting through, and we continue to fight for a short-term extension covering 2015 and 2016 at a minimum.

SENATE MAY VOTE ON TAX EXTENDERS

The Senate Finance Committee could mark up a tax extenders bill in the next two weeks, but it could be bottled up and not reach the floor until there’s an agreement on financing the Highway Trust Fund which expires on July 31st.

The Bi-Partisan Tax Reform Working Groups of the Senate Finance Committee submitted their reports yesterday, paving the way to talks within the Committee for a highway bill compromise.

It’s clear from the Infrastructure and Community Development report that the Working Group chose to concentrate on the infrastructure part of their mandate, mainly providing options for financing the Highway Trust Fund.   WOTC isn’t mentioned in the report!  The Indian Employment Tax Credit is discussed in the appendix, along with the New Markets Tax Credit, Rehabilitation Tax Credit for historic structures, and Low-Income Housing Tax Credit—but not WOTC.

You may read the report at the Senate Finance Committee web site, www.finance.senate.gov

Senators who served on the Infrastructure and Community Development Working Group are:  Senator Dean Heller (R), co-chair, Senator Michael Bennet (D), co-chair, and Senators Dan Coats (R-IN), Tim Scott (R-SC), Bill Nelson (D-FL), and Maria Cantwell (D-WA).

These reports are way-stations to help senators study and decide what they can support in legislation.  Every member of the Senate Finance Committee is acutely aware that now is the moment to set studies aside and write legislation.

The Highway bill is top priority and tax extenders after that, but there’s a big problem here.  The swirl of politics surrounding highway funding has drawn the largest multinational corporations into the fray because many in Congress are looking at taxing offshore earnings that are currently deferred from tax.  The Treasury Secretary and Ways and Means chairman insist the right way to tax that income is via a new international tax regime and a lower corporate tax rate.  Talks on this could take months but the states’ highway construction has to be kept going, especially in summer and fall, so Senator McConnell’s and Speaker Boehner’s  problem is to somehow find the money to replenish the Highway Trust Fund till December, and do it before Congress departs on summer recess July 30.

Republicans say they won’t raise taxes but they’ve got to find the billions somewhere, so there’ll be a fight down to the wire, crimping time for the House and Senate to take up an extenders bill.

Our goal is not to be drawn into the highway fight but get a stand-alone extenders bill marked up and passed right after the Highway bill—this way the tax extenders can be passed when Congress returns after Labor Day.  Immediate message to every senator should be:

“The Senate’s work on a Highway Trust Fund extension shouldn’t delay action this month on another top priority tax matter—the renewal of expired tax code provisions including the work opportunity tax credit which is key to private sector employment opportunities for veterans, the disabled, the poor and homeless .  Citizens who are most in need of help, and those who like veterans and people with disabilities are entitled to aid, are being deprived of a better chance for the one thing they desire most—a job and steady income to stand on their own feet and not rely on government assistance. 

“WOTC costs the Treasury $18 billion over ten years to support the hiring of 1.6 million people a year into private sector jobs, and academic research demonstrates conclusively that savings from these workers exiting  welfare and other public assistance are more than $34 billion over ten years—nearly double WOTC’s cost.  Moreover, the WOTC credits of private sector employers add billions of dollars of income to the economy of every state as they are reinvested locally. 

“WOTC expands opportunity for those with the highest unemployment rates who are struggling to make ends meet, but when it’s expired, the tax incentive for employers to hire the poor, disabled, and chronically unemployed is absent and large numbers of our people in every state remain mired in poverty with little chance of escaping it.  This is not the equality of opportunity our country stands for.  Please support fast action to extend WOTC and other expired tax provisions for 2015 and 2016.”

SUPPORT FOR PERMANENT WOTC

The National Association of Governors’ Committees on People With Disabilities (NAGC) sent the attached letter to Senate Finance Committee Chairman Orrin Hatch and Ways and Means Committee Chairman Paul Ryan.

NAGC is a powerful voice on employment of people with disabilities and its initiative supporting legislation making WOTC a permanent part of the tax code will be timely and effective.

TIA members should call attention to this letter to your contacts who may not have seen it.

Many thanks to Martha K. Gabehart, Chairperson of NAGC, for taking the lead on this issue and coordinating the letter with all fifty states.