Spending Bill Averts Government Shutdown and Provides Increased Funding for Emissions Reduction Programs
On February 15, the President signed an appropriations bill to fund the government through the rest of the fiscal year 2019.
The Consolidated Appropriations Act included $82 million for DERA program grants and $52 million for Targeted Airshed grants, which is a $12 million increase for both programs compared to FY2018. These programs have provided grants to fleets operating in areas dealing with poor air quality to upgrade to lower emitting vehicles. A breakdown of the spending package is detailed in the House Appropriations Committee’s Joint Explanatory Statement.
Commerce Department Sends 232 Tariffs Report to White House
The U.S. Department of Commerce issued a long-awaited report to the White House on February 17, detailing its findings on the impact of foreign auto and vehicle part imports on national security under the authority of the Administration’s Section 232 investigation. The report’s conclusions have yet to be disclosed to the public, despite calls from high-ranking members of Congress for their release. The Administration has a 90-day window to decide whether it will impose tariffs on foreign autos and auto parts, which could be as high as 25 percent. Some expect the tariffs to have a particularly adverse direct impact across the auto industry and may be followed by significant retaliatory tariffs impacting other industries from major trading partners including the EU and Japan.
These developments come on the heels of continued bipartisan legislative pressure from Congress, as it looks to reign-in what it interprets to be an overstep in executive authority. The Bicameral Congressional Trade Authority Act, S.287/H.R.940, and the Trade Security Act, S.365/H.R.1008, would provide additional checks on Section 232 national security investigations and give Congress the ability to weigh in on whether tariffs are imposed in response to legitimate threats to national security. Given the substantial down-the-line impact tariffs on autos and vehicle parts would have on the prices of foreign and domestic goods, NAFA has been vocal in expressing the concerns of fleets to the Administration and leaders in Congress.
Expired Tax Extenders Potentially Hitch Ride on Upcoming Measures
Legislative language addressing the over 30 tax credits that expired at the end of 2017, including the $0.50-per-gallon alternative fuels excise tax credit, the $1-per-gallon biodiesel excise tax credit, and the 30 percent alternative fuel infrastructure tax, was not included in the final FY2019 appropriations package. Despite strong outreach from the public and industry on the importance of these tax provisions, members of Congress opted to avoid the inclusion of any tax extenders. NAFA and its members have been active in reaching out to Congress to highlight the importance these tax credits may have on fleets and their sustainability goals.
Lawmakers, such as Senate Finance Committee Chairman Sen. Chuck Grassley (R-Iowa), firmly believe that extenders need to be dealt with before the upcoming tax filing deadline, as many businesses count on the incentives in their yearly budgets and plans. Members of congressional staff suspect that tax extenders may find a place in the upcoming must-pass legislation dealing with the federal debt ceiling or the caps on sequestration. The House Ways and Means Committee reportedly plans to have a hearing on the tax breaks and take a general look at temporary tax policy soon.
Fuel Efficiency Talks Between the White House and California Fall Apart
On February 21, the White House announced that it had ended negotiations with the California Air Resources Board on its Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule with no agreement on a compromise. The Administration’s SAFE Vehicles Rule proposes a reduction of the post-2020 fuel economy standards automakers and California originally agreed to under the Obama Administration, which would have been a 47 mpg fleet average. The new proposed rule would cap the requirements at 37 mpg average post-2020 and would revoke California’s authority to set tailpipe greenhouse gas (GHG) emissions standards for new autos.
Some automakers are now expressing concerns over a possible patchwork of mpg and GHG emissions standards, as states including California set out to maintain requirements and standards in line with their individual environmental and sustainability goals. GM and Ford Motor have both expressed disappointment that an agreement was not reached to ensure regulatory certainty through a nationwide fuel economy program. NAFA supports the move towards increased sustainability and believes that a unified national standard helps automakers maintain prices on autos and auto parts, which is extremely important for fleets as they consider a vehicle’s total cost of ownership.
DOT Requests Input on V2X Technologies
The DOT issued a request for comment (RFC) in mid-December seeking input on the ways recent technological developments could impact V2X communications. V2X communications collectively refer to V2V, V2I, and vehicle-to-pedestrian (V2P) communications. V2X services give vehicles the ability to transmit and receive the Basic Safety Message (BSM), which consists of data about a vehicle in transit that enables other vehicles on the road to avoid collisions.
NAFA works with the Safety Spectrum coalition in support of Advanced Driver Assistance Systems (ADAS) technologies that rely on dedicated short-range communication (DSRC) and Cellular V2X (C-V2X), which would operate within the dedicated 5.9 GHz spectrum. However, the current regulatory environment for these technologies is unclear, which is disincentivizing investments in V2X technology. The enormous potential safety and efficiency benefits of these innovations for the transportation system underscore the need for DOT to act. Several international markets are going forward within varying regulatory schemes to deal with these technologies, such as in the EU and China. Without a core set of regulations in place in the U.S. market, automakers may potentially invest in noncompatible technologies that could significantly hinder the benefits of V2X.
On February 25, NAFA submitted comments alongside members of the Safety Spectrum Coalition, including the Global Automakers, ATA, and the National Safety Council, to DOT requesting that the department support policies and take actions that will remove uncertainty about channel allocation and spectrum rules, and that ensure interoperability and compatibility of communications technologies that are allowed for V2X communications.
NAFA Fleet Management Association
http://www.nafa.org/