U.S. Legislative Issues
House Passes Bill Making Bonus Depreciation Permanent
On July 11, the House of Representatives voted to make the Bonus Modified Accelerated Cost Recovery System (MACRS) or "bonus depreciation" program permanent.
Before expiring on December 31 of last year, the program allowed bonus depreciation to be taken for fifty percent of a truck’s purchase price, with the deduction capped at $8,000 for automobiles, light trucks, vans, and SUVs.
The House bill would also permanently extend the option to increase the alternative minimum tax (AMT) credit limitation in lieu of bonus depreciation.
The bonus depreciation tax deduction has never enjoyed a permanent status in the tax code before, instead being extended for short periods of time. This permanent extension would provide greater certainty to fleets for vehicle acquisition planning. The bill faces an uncertain future in the Senate, where Finance Committee Chairman Ron Wyden shepherded a tax extenders package through his committee that included 55 incentives and deductions (including a temporary extension of bonus depreciation). Chairman Wyden’s bill has been stalled on the Senate Floor since mid-May after an agreement could not be reached on which amendments to allow during Senate consideration. However, passage of the provision in the House was a significant step forward and the issue will likely be resolved in a conference committee by year’s end.
House Passes Highway Stopgap Bill, Further Action Expected In Senate Before August Recess
On July 10, the House Ways and Means Committee approved a short term bill to patch the Highway Trust Fund until May of 2015. The bill was quickly scheduled for a vote before the entire House and on July 15 it passed by a vote of 367-55.
The Highway Trust Fund is in trouble due to lagging revenues. The Department of Transportation has indicated that it needs at least $4 billion in cash balances available in the highway account to meet obligations as they are due. The Fund is scheduled to reach that $4 billion threshold in late July. If a solution is not found by then, payments to states for highway projects will be delayed.
The bill passed by the House raises $10.9 billion through the "smoothing" of employee pensions over the next decade allowing employers to defer payments for future benefits, extending existing customs user fees, and a transfer from the Leaking Underground Storage Tank Trust Fund. President Obama reluctantly backed the plan, saying he still seeks a longer term solution to the funding shortfall.
A similar measure also passed the Senate Finance Committee on July 10, although it differs from the House version in the ways it pays for the stopgap. Senate Finance Committee Chairman Ron Wyden (D-OR) sought a bill that would last until the lame duck session where he believed a better deal could be reached on a long term bill, but compromised with the House approach to ensure there is no lapse in funding.
House Appropriations Bill Restores Diesel Emissions Reduction Act (DERA) Funding
The draft of the Interior and Environmental Appropriations bill for Fiscal Year 2015 was released by the House Appropriations Committee on July 8 and immediately marked up by a subcommittee on July 9. Among other provisions, the bill restores funding for the Diesel Emissions Reduction Act (DERA), which many feared would be left underfunded. DERA is funded at the maximum level of $30 million.
In a letter sent in June, NAFA Fleet Management Association requested that Congress fully fund the Diesel Emissions Reduction Act.
Enacted through the Energy Policy Act of 2005, DERA provides funding for fleets to install retrofit technologies on existing heavy-duty diesel vehicles and engines, or replace engines and equipment, reducing harmful emissions by as much as 90 percent. While emissions from newer diesel engines reflect vital progress in reducing emissions, millions of older diesel engines are still in use by fleets. Fortunately, emissions from these older engines can be controlled with the use of modern technologies funded through DERA.
FMCSA Offers New Guidance Concerning Records Of Duty Status
The Federal Motor Carrier Safety Administration (FMCSA) issued new guidance on the use of Records of Duty Status (RODS) for drivers. The FMCSA printed the guidance in the Federal Register on July 10. The guidance, a clarification of previous policy, says that drivers may continue to use laptop computers, tablets, and smartphones to prepare their records with an electronic signature, but that they do not meet FMCSA requirements for Automatic On-Board Recording Devices (AOBRDs) which are connected directly to the vehicle and must be able to print out copies of the records upon request.
You can read more here.
Department Of Energy Announces $4.5 Million In Grants For Alternative Fuel Vehicle Expansion
The Department of Energy announced the availability of $4.5 million dollars in grants for expanding the use of alternative fuel vehicles through its Clean Cities program in a June 16 release. The program aims to promote plug-in electric, natural gas, propane, and flexible fuel vehicles by increasing access to these vehicles through car-sharing, rental car, and commercial fleet leasing programs.
Concept paper submissions are due by August 1 and the full application submission deadline is October 1. More information can be found here.
