Weekly Legislative Update June 29, 2020
TIA Signs onto Coalition Letter on Net Operating Losses
Dear Chairman Grassley and Ranking Member Wyden:
As the American business community strives to rebuild following the unprecedented challenges caused by the COVID-19 pandemic, we want to express strong support and appreciation for the provisions enacted in the CARES Act relating to net operating losses (NOLs).
These beneficial changes come at a challenging time for many industries and will provide necessary liquidity for operations. We are concerned that some in Congress are seeking to reverse these changes and would urge you to leave them in place.
As you are aware, in response to the overwhelming adverse economic impact of the COVID-19 pandemic, Congress included in the bipartisan CARES Act several changes to the tax rules for NOLs. First, the CARES Act provides a five-year carryback for NOLs generated in 2018, 2019, or 2020. Second, the CARES Act suspends for 2018, 2019, and 2020 the otherwise applicable limitations on excess business losses for non- corporate taxpayers.
The ability to carryback NOLs is a critical component of a well-operating income tax system. Indeed, NOL carryback provisions have long been bipartisan tools utilized by lawmakers to provide liquidity and are routinely expanded during times of economic dislocation. As the non-partisan Joint Committee on Taxation has noted (see JCX-12R- 20), the "provision allows taxpayers to use NOLs to a greater extent to offset taxable income in prior or future years in order to provide taxpayers with liquidity in the form of tax refunds and reduced current and future tax liability." The provision suspending limitations on excess business losses for non-corporate taxpayers offers similar relief. As Chairman Grassley recently noted, the "key was for businesses to keep cash on hand, if they hadn't already filed, or get refunds to give them liquidity to keep the doors open, machinery running, and most importantly, employees paid, to the greatest extent possible."
The tax and liquidity provisions in the CARES Act are helping to ensure that the severe economic situation created by COVID-19 do not become even worse. We urge Congress to protect American jobs by preserving the NOL carryback and suspension of limitation of excess busines loss provisions contained in the CARES Act.
Thank you for your consideration of our views.
The Tire Industry Association and other trade associations.
U.S. Department of Labor Issues Interim Final Rule to Implement Provisions of the United States-Mexico-Canada Agreement
The U.S. Department of Labor today announced an interim final rule providing regulations necessary to implement and administer the high-wage components of the Labor Value Content (LVC) requirements set forth in the United States-Mexico-Canada Agreement (USMCA) and the treaty's implementing statute. The rule provides needed guidance to producers of motor vehicles covered by the USMCA, describing criteria they must meet to qualify for preferential tariff claims under the treaty.
The LVC requirements promote more high-wage jobs for the U.S. automobile and auto parts industry by requiring that, to qualify for preferential tariff claims under the treaty, manufacturers must produce a significant portion of certain motor vehicles using high-wage labor. Among other requirements, the treaty requires that for a passenger vehicle, light truck, or heavy truck to be eligible for preferential tariff treatment, a minimum percentage of the cost of the vehicle must be made at a facility that pays an average hourly base rate of at least $16.00 per hour.
To qualify for preferential tariff treatment, a producer must file a certification with U.S. Customs and Border Protection (CBP) demonstrating that its production of covered vehicles meets the high-wage components of the LVC requirements. WHD, in conjunction with CBP, will review those certifications.
The interim final rule is effective July 1, 2020 and is available for review and public comment for 60 days. The Department encourages interested parties to submit comments. The interim final rule, along with the procedures for submitting comments, can be found at the Wage and Hour Division's interim final rule website, https://www.dol.gov/agencies/whd/usmca.
TIA Signs onto Coalition 5.9 GHz Letter
Dear Chairman Wicker and Ranking Member Cantwell:
As a coalition of transportation industry stakeholders comprised of State, city, and county departments of transportation, automakers, vehicle suppliers, trucking, transportation safety groups, law enforcement, first responders, auto insurers, bicyclists, and pedestrians, among others that care deeply about transportation safety, we write to express significant concern with efforts underway at the Federal Communications Commission (FCC) to reallocate spectrum in the 5.9 GHz band away from transportation safety.
Reducing the amount of spectrum available to Vehicle-to-Everything (V2X) technology undermines our shared interest in reducing the number of traffic fatalities and injuries that occur each year on U.S. roadways, improving motor vehicle safety, and improving the operational performance of roadways by reducing congestion across the transportation system. Such a decision wouldalso harm U.S. global competitiveness with respect to next-generation automotive safety technologies. We ask you to use the Committee's authority over the FCC to direct the Commission to reconsider the approach in the Notice of Proposed Rulemaking (NPRM) that reallocates spectrum within the 5.9 GHz band for unlicensed uses.
As you know, the 5.9 GHz spectrum band is currently reserved for intelligent transportation systems. Commonly referred to as V2X technology, these systems allow vehicles to communicate with other vehicles, infrastructure, law enforcement, and bicycle and pedestrian road users to avoid crashes, enhance safety, improve transportation efficiency, and reduce air pollution. The National Highway Traffic Safety Administration (NHTSA) predicts that the safety applications enabled by V2X technology could eliminate or mitigate the severity of up to 80 percent of non-impaired crashes, significantly reducing the nearly 37,000 lives lost and 3 million injuries that occur on U.S. roadways each year. In addition, 70 percent of crashes involving commercial trucks could be mitigated by V2X technologies according the NHTSA. V2X technology will provide real economic savings as well by significantly reducing the more than $830 billion in annual costs associated with crashes on American roads.
Furthermore, this technology is uniquely capable of reducing traffic congestion through prioritized traffic signal timing, truck platooning, and crash reduction, reducing travel time and delays for commuters and commerce alike, delays that cost the nation more than $166 billion annually according to the U.S. Department of Transportation (USDOT). V2X pedestrian detection systems will better protect vulnerable road users, which encompasses a broad set of road users - people walking, children being pushed in strollers, people using wheelchairs or other mobility devices, passengers embarking and disembarking buses and trains, and people riding bicycles and scooters. Preserving the spectrum for V2X would provide greater benefit for the American people than reallocating the spectrum for unlicensed devices.
USDOT and public and private sector transportation stakeholders have worked together to bring this technology to the U.S. market. Billions of dollars - including at least $2 billion in public funding from federal, state, and local governments - have been invested in the development and deployment of V2X technology. The result of U.S. innovation and investment in V2X is now shown through existing and planned deployments around the country. At least 30 states - from Michigan to Pennsylvania to Ohio to Florida - have invested in building out intelligent infrastructure using V2X technology. Two of the country's largest automakers, General Motors and Ford Motor Company, have deployed or announced plans to deploy the technology in vehicles in the U.S. market, and, recently, the Alliance for Automotive Innovation announced a commitment to deploy at least five million V2X devices in vehicles and roadway infrastructure over the next five years.
Even as automakers and infrastructure owners and operators move forward with deploying this technology, V2X innovation continues. In recent years, we have seen the development of new applications and novel use cases that will further advance transportation safety, particularly related to advanced driver assistance systems (ADAS) and automated vehicles (AVs). V2X technologies enable applications that cannot be performed by un-connected AVs, such as communicating with vehicles that are out of line-of-sight, providing road hazard warnings from roadside infrastructure, and allowing AVs to coordinate actions rather than making decisions individually. V2X complements AV sensors by providing information that is more precise, over longer ranges, and in non-line-of-sight conditions.
Unfortunately, since 2013, the FCC has been threatening to repurpose spectrum away from this cutting-edge transportation safety technology and has now released a NPRM to reduce the spectrum that is available to V2X technology. The FCC's proposed rule would reallocate the majority of the 5.9 GHz band away from transportation safety. Numerous technical assessments related to the FCC's proposal, including preliminary assessments released by USDOT, show that out-of-channel interference from unlicensed devices operating in adjacent bands would be likely to make the spectrum reserved for transportation safety communications unusable for such purposes. This interference would delay or block safety-critical messages where split-second action is required to avert a crash.
The U.S. has led the world in creating V2X technology and in developing the standards that enable and support V2X technology. The FCC's proposal would cede American leadership as countries around the world are building out their V2X networks. There is no doubt that, if implemented, the NPRM would undercut the public and private investments that have been made in the United States, stifle further innovation, and challenge American global competitiveness. This approach is in direct conflict with efforts underway in other parts of the world. At precisely the same time that other countries are reiterating their commitment to V2X technology and, in many cases, looking to increase the amount of spectrum that is available to support V2X technology, the FCC is poised to take action that would all but ensure that the technology would not realize its full potential in the United States.
The comments and reply comments submitted to the FCC in response to the NPRM overwhelmingly opposed repurposing spectrum away from transportation safety. In fact, more than 85 percent of the commenters opposed the FCC's proposal, including State and city departments of transportation, automakers, vehicle suppliers, technology companies, law enforcement, first responders, safety advocates, engineers, telecommunications companies, the drone industry, and many others. These groups asked the FCC to heed the warnings of USDOT that this plan would not allow sufficient spectrum for V2X to function, threatening the significant safety benefits this technology provides.
We are representative of a broad and diverse group of stakeholders that strongly support preserving the 5.9 GHz safety spectrum band for transportation safety. We ask you to use the Committee's authority over the FCC to direct the Commission to reconsider the approach in the NPRM that reallocates spectrum within the 5.9 GHz band for unlicensed uses. Use of your authority at this critical juncture could save thousands of American lives and hundreds of billions of dollars each year.We look forward to working with you to ensure that the safety, economic, congestion mitigation, environmental, and efficiency benefits that V2X technology can provide are realized in the United States.
The Tire Industry Association and other trade associations.