NIADA Government Report

Brett Scott

By Brett Scott

NIADA is your voice in Washington D .C ., advocating for independent dealers, the used vehicle industry and small business . Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities .

LEGISLATIVE

Infrastructure: After months of negotiating, bickering and political maneuvering, the House of Representatives at last passed a bill providing $1 .2 trillion in funding for roads, bridges, broadband and other infrastructure projects .

The bill, which had passed the Senate with bipartisan support, was approved in the House by a 228-206 vote . It was signed into law by President Biden on Nov . 15 .

Social Spending: Next on the President’s agenda is the package of social spending that would vastly expand federal programs in education, health care, energy and more – a bill whose price tag has been trimmed back from $3 .5 trillion to a still massive $1 .75 trillion .

The House vote on that bill followed the nonpartisan Congressional Budget Office’s estimate of the bill’s economic impact .

The CBO report showed the bill would increase the federal deficit by more than $367 billion over 10 years, but estimated $207 billion could be generated by increased enforcement by the IRS, for a net deficit of about $160 billion . The White House claims the bill would reduce the deficit “over the long term . ”

The House passed the bill by a 220-213 vote, with no Republicans voting for it and only one Democrat – Rep . Jared Golden of Maine – opposing it .

The bill now advances to the Senate, where Democrats will attempt to use the budget reconciliation process to pass it with no Republican votes .

With the Senate split 50-50, Democrats will need the support of all of their senators to allow Vice President Harris to cast the deciding vote .

That is not a given . Sens . Joe Manchin (D-W .Va .) and Kyrsten Sinema (D-Ariz .) have repeatedly expressed reservations with some of the bill’s programs and the tax proposals to pay for them .

In an Oct . 26 news conference, Manchin blasted the bill, citing concerns about its effect on inflation and saying it included “shell games” and “budget gimmicks” that could lift its actual cost to twice the proposed $1 .75 trillion .

S. 2387, Small Business Tax Fairness Act: NIADA joined a coalition of trade associations representing every sector of the economy in signing a letter to the leaders of the Senate Finance Committee and the House Ways and Means Committee opposing the bill .

S . 2387 would simplify the 199A deduction for pass-through entities but would eliminate that deduction for taxpayers with incomes of more than $500,000 and begin phasing it out at $400,000 .

That limit, the associations said, would be “extremely harmful for a wide swath of small businesses .” In addition, the letter urged the committees to make the 199A deduction permanent – it is currently set to expire in 2025 .

REGULATORY

The Federal Trade Commission implemented a controversial update to the Safeguards Rule, requiring non-banking financial institutions – which now includes vehicle dealers – to develop, implement and maintain a comprehensive security system to keep their customers’ information safe .

The changes spell out the specifics of a compliant information security program, including limiting access to customer information and new requirements for encryption and multifactor authentication .

The new rule also requires entities to designate one “qualified individual” to oversee their information security program . And they must explain the administrative, technical, and physical safeguards used to handle customers’ secure information .

The update was approved by a 3-2 vote of the five commissioners, with Republicans Noah Joshua Phillips and Christine S . Wilson dissenting, saying the revision is unnecessary and its “one-size-fits-all approach” could weaken data security by diverting resources away from real risk management based on an entity’s unique security needs .

NIADA submitted comments opposing the revisions to the Safeguards Rule, citing the “enormous expense” for dealers to comply – up to $330,000 annually – while not significantly reducing data security risks or increasing consumer benefits . The FTC is now seeking comments on another proposed change requiring financial institutions to report data breaches and other security events to the commission .

PAC

California: On Nov . 12, I joined IADA of California president Beto Beas, chairman Brenna Stansberry, senior vice president Tony Harb and executive director John Frappier at an event for Rep . Doug LaMalfa (R-Calif .) in Richvale, Calif .

Rep . LaMalfa, a member of the House Transportation and Infrastructure Committee, expressed support for the auto industry and independent dealers and welcomed an ongoing relationship with NIADA and IADAC .

Coffee With Congress: NIADA’s latest Coffee With Congress is coming up Dec . 8, featuring Rep . Barry Loudermilk, a Republican representing Georgia’s 11th district, just north of Atlanta .

Coffee With Congress is a series of virtual events that allows NIADA members to talk directly to the congressional representative from their district about what’s happening in Washington and ask questions about legislation and policies that could affect their businesses .

If you’d like to have coffee with your congressional representative, let me know at brett@niada .com and we’ll be happy to try to arrange it .

GRASS ROOTS

Michigan: A bill backed by the Michigan IADA was signed into law by Gov . Gretchen Whitmer, giving car dealerships more flexibility in their hours of operation .

Previously, dealerships were required to be open for at least 30 hours a week for all 52 weeks of the year, making it difficult for small dealerships to accommodate emergencies, vacations, repairs and other necessary closures .

The new law allows vehicle dealerships to be open for less than the 30 hour-minimum for up to four weeks each year .

“We applaud Governor Whitmer,” said MIADA president Otto Hahne, owner of City of Cars in Troy, Mich ., “for signing this common-sense legislation that will provide many small independent automobile dealerships with much needed regulatory relief and flexibility when emergencies occur and provide them with the ability to plan for other temporary closures . ” 3

Brett Scott is NIADA vice president of government affairs.