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L AT E S T G O V E R N M E N TA L I S S U E S

NIADA Legislative Team Update Here’s a rundown of some of the latest governmental issues and activity affecting the used car industry from Sante Esposito of Federal Advocates and NIADA legislative/regulatory/ compliance counsel Shaun Petersen.

Auction Sales While Congress has not officially said anything on the issue in months, there is, as previously reported, still interest from Sen. Pryor and the House Energy and Commerce Committee in exploring the impact of the current auction sale process on consumers and law enforcement. To that end, Steve Lehrman, legislative assistant to Sen. Pryor, visited ADESA’s Washington-area auction facility on Aug. 15 to view he auction process firsthand. At the end of the visit, Lehrman said the senator and other interested legislators “don’t have a problem with what goes on at the auction” but could have issues with “what happens with the auctioned cars.” Lehrman asked if NIADA could provide some thoughts regarding how to address that situation, especially as it relates to law enforcement, but we prefer not to respond until we receive more clarification as to exactly what issue/ problem legislators are trying to solve. Regardless, legislation is not likely to be introduced this year. Rental Cars (S.1445, S.3502 and H.R. 6094) There have been reports that consumer advocates are nearing a deal with rental car companies on the issue of banning rentals of motor vehicles under safety recall until the defect or noncompliance is remedied. So far, there is nothing definitive, and it’s not clear whether the rumored deal would require legislation. A bill covering the rental/recall issue (S. 1445) was introduced in 2011 by Sen. Chuck Schumer (D-NY) and cosponsored by Sens. Dianne Feinstein and Barbara Boxer, both California Democrats. It was modified this summer by H.R. 6094, introduced by Rep. Lois Capps (D-Calif.), and an updated Senate bill (S. 3502) introduced by Boxer and co-sponsored by Feinstein. Boxer has sparred with rental

car companies this year, calling for Enterprise, Avis, Hertz and Dollar Thrifty to sign a pledge promising not to rent or sell cars under safety recall until the cars are fixed. Only Hertz signed the pledge. The others said while they support legislation to ensure rental car safety, companies address safety recalls in a timely manner and insist any legislation should also cover other businesses that transport passengers, like limousine and taxi companies.

S.1449, MAP-21 In September, Sen. Boxer announced she is already working on legislation to succeed the Moving Ahead for Progress in the 21st Century Act (MAP-21), the $105 billion federal transportation bill that was signed into law July 6. MAP-21 expires in about 750 days. Congress is likely to be in legislative session for less than half that time and is likely to be preoccupied with a number of higher priority issues. Boxer said her goal is “to find a dependable funding source and to work in a bipartisan way to find that funding source. I really believe that the Highway Trust Fund should be funded through user fees.” Those fees might include indexing the gas tax to inflation, but probably would not include a vehicle miles-traveled fee, which Boxer said raises privacy concerns. Even a gas tax increase won’t be enough, she said, if vehicles keep getting more fuel-efficient. “We’ve got to figure out other ways,” Boxer said. “For example, I drive a hybrid car and I get about 50 miles to the gallon, I’m not paying my fair share at all. If I get an electric car, I won’t pay anything.” H.R.860 and S.110, Promoting Charitable Donations of Qualified Vehicles Act of 2011 While the Senate bill, introduced by Sen. John Ensign (R-Nev.), has no cosponsors, the identical House bill, introduced by Rep. John Larson (D-Conn.), now has 319 cosponsors – almost 75 percent of the House membership. The bill amends the Internal Revenue Code to make it easier to take a charitable tax deduction for

contributions of qualified vehicles (motor vehicles, boats or airplanes). According to the IRS, as a result of Congress tightening the deductibility rules in 2005, the volume of used car donations fell by about 67 percent. With such a large number of bill sponsors and obvious bipartisan support, one would expect the bill to move quickly and without controversy through the legislative process. That has not happened for several reasons – the somewhat problematic tax deduction history of motor vehicle donations, the fact that no revenue bills are moving in the House, the uncertainty of the bill’s revenue impact, the lack of Senate interest and support, the fact that the issue is not a priority for House leadership, and the limited amount of time remaining in the Congress to consider legislation. S. 3468, the Independent Agency Regulatory Analysis Act of 2012 On Aug. 1, Sen. Portman (R-Ohio) introduced S.3468, the Independent Agency Regulatory Analysis Act of 2012. The bill was referred to the Senate Homeland Security Committee. Under the bill, the White House would receive explicit authority to influence the rulemaking process of regulatory agencies, including the Federal Trade Commission the Consumer Financial Protection Bureau. The President, through an executive order, would be allowed to mandate at the minimum a 13-point test for rulemaking, including finding “available alternatives to direct regulation,” evaluating the “costs and the benefits,” and periodically reviewing existing rules to make agencies “more effective or less burdensome.” For rules with an annual effect of $100 million or more on the economy, agencies would submit their proposals to the White House’s Office of Information and Regulatory Affairs. A negative review from the office would delay a rule for up to three months and force the agency to explain its approach. If enacted, the bill would clearly impact various aspects of the regulatory process, the most obvious being timing. C O N T I N U E D O N PA G E 1 4

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TNIADA Dealer Connect Dec 2012  

Tennessee Dealer Connect for December 2012