U.S. Legislative Issues

 

The Department of Justice (DOJ) has launched an investigation into General Motors Co.'s handling of a recall of older Chevrolet Cobalts and other GM vehicles. GM recalled 1.37 million cars in the U.S. (a total of 1.6 million worldwide) last month because faulty ignition switches can shut off power to the front airbags. GM says it knows of 31 crashes and 13 deaths linked to the faulty switch.

 

According to a New York Times analysis of consumer complaints submitted to NHTSA, there is evidence that GM and NHTSA were aware of the problem as far back as February 2003, with NHTSA receiving an average of two complaints a month about the ignition switches but never formally investigating the matter. While it is rare, it is not unprecedented for the DOJ to consider criminal charges against an auto company for how it handles recalls. It was reported in February that the Department of Justice was nearing a settlement with Toyota nearly four years after bringing criminal charges against the company over disclosure in the sudden acceleration case.

The news of the DOJ investigation comes among investigations on Capitol Hill into both GM and the National Highway Transportation Safety Administration (NHTSA). In the House, Energy and Commerce Committee Chairman Fred Upton (R-MI) has announced that his committee will investigate "why GM and the National Highway Traffic Safety Administration failed to act quickly when customers started reporting problems nearly a decade ago," and in the Senate, Clair McCaskill (D-MO), the Chairwoman of the Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Insurance, has tentatively scheduled a hearing for some time in April on the subject.

President Obama’s Fiscal Year 2015 budget, released on Tuesday, March 4, eliminates funding for the Diesel Emissions Reduction Act (DERA), which has been used by trucking fleets to buy equipment to reduce diesel emissions. The grant program was also proposed to be zeroed out in the President’s FY2014 budget, but Congress funded the program at $13 million for FY 2014. The proposed cut is part of a 3.7 percent total decrease in the budget of the Environmental Protection Agency, which administers the program. While the President’s budget is largely seen as a nonstarter by Congressional Republicans, it is still a starting place for the negotiations which will continue through the summer.

Another part of the Obama Administration’s Fiscal Year 2015 budget includes a proposal to raise the current tax credit for fuel cell vehicles, and extend it to other alternative fuel commercial vehicles. The law currently provides for a credit of $20,000 for fuel cell vehicles between 14,000 and 26,000 pounds, and $40,000 for fuel cell vehicles weighing more than 26,000 pounds. The President’s proposal would raise the credit for medium-duty trucks to $25,000, and extend the credit for both medium- and heavy-duty trucks to other alternative fuel vehicles, such as those operating on compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, or any liquid at least 85 percent of the volume of which consists of methanol.

Additionally, the Obama Administration proposed lowering the federal excise tax on liquefied natural gas (LNG) used as a vehicle fuel, from 24.3 cents per gallon to 14.1 cents per gallon. The change, the Administration says, would bring LNG into parity with diesel on an energy content adjusted basis.

Deborah Hersman, chairwoman of the National Transportation Safety Board (NTSB) will be leaving her post on April 25 after five years to lead the National Safety Council as the new President and CEO. The news of Hersman's resignation comes as the agency is still investigating several high profile transportation incidents, including the Asiana Airlines crash in San Francisco last summer and the recent, deadly crash of a Metro-North rail car in New York.

 

While the NTSB does not have rule-making authority, it is seen as one of the strongest independent agencies because of it's role in singling out causes of transportation accidents and making recommendations to companies and regulators about changes. Until President Barack Obama chooses a permanent successor to Hersman, Christopher Hart, the NTSB's Vice Chairman, will serve as Interim Chairman.

The Energy Information Administration (EIA) reported that 85 percent ethanol (E85) fuel is "rapidly" increasing in availability in states outside of the Midwest. E85 is usually harder to find outside the Midwest where it is produced from the corn grown there. E85 can only be used in specifically designed or flex-fuel cars, which represent approximately five percent of the U.S. light-duty vehicle fleet, according to the EIA. Currently, two percent of all retail stations in the United States offer E85, meaning the vast majority of the nation's approximately 156,000 retail motor fuel outlets do not offer the fuel. There are currently 2625 stations selling E85 across the county, with Minnesota continuing to lead the nation, with 336 retail locations.

The uptick in ethanol availability has some in the ethanol industry calling for the EPA to revise the ethanol production targets in the 2014 Renewable Fuel Standard (RFS) upward. Last fall, the EPA lowered the ethanol requirements after fears that not enough ethanol would be produced to meet demand.

On March 13, a long awaited rule concerning electronic on-board recorders was approved by the White House Office of Management and Budget (OMB). The rule requires the use of electronic on-board recorders (EOBR) by interstate commercial trucks and buses who currently use a record of duty status (driver’s log) to record their hours of service.

 

The rule, proposed by the Federal Motor Carrier Safety Administration (FMCSA), has been sent to the Federal Register for publishing. Once published, the public will have the opportunity to make comments before the rule goes into effect. Electronic on-board recorders, also known as Electronic Logging Devices (ELDs), are intended to reduce paperwork and increase accuracy for those covered by Hours of Service (HOS) regulations.