Maryland Dealers to Push for Energy Commission;
Kaine Transportation Plan Top Issue in Virginia
General Assemblies in Maryland and Virginia convened this week, and dealers are girding for what is expected to be major environmental and tax challenges. In Maryland, California Car legislation is back, and part of the Virginia governor’s Transportation Plan includes tax increases on motor vehicle sales.
Maryland
With the recent adoption of California car (Cal/Car) emission standards in Pennsylvania, pressure on Maryland lawmakers to follow suit has increased substantially. To ensure a fair and balanced approach to the stateês energy needs, Maryland auto dealers have incited talks with legislative leaders, advocating the creation of a Maryland Energy Commission that would look at all the stateês energy needs and serve as a technical and scientific resource for the governor and General Assembly as they formulate comprehensive energy policies going forward.
Such a commission would be comprised solely of members of the legislature, representatives of the governor and energy experts from the University of Maryland Energy Research Center and, perhaps, Johns Hopkins University. The Commission would accept written comments from interested parties to conduct its business. But to ensure objective fact finding and analysis, the Commission would not include representatives of industry or environmental groups.
Our message is that energy is a very technical, complex issue and public policy makers need a source of factual information untainted by politics, said WANADA Chairman Jack Fitzgerald.
Both MADA and WANADA have pledged to support any recommendations such a commission would adopt, should it be mandated by law, even if they included Cal/Car emission standards.
Fitzgerald is also spearheading an effort by Maryland dealers to aggressively counter misleading media reports fed by environmental groups in support of Cal/Car standards for Maryland. Dealers believe Cal/Car legislation is not right for Maryland for the following key reasons:
Maryland already has vehicle emission standards designed to serve this region.
Federal Tier 2 tailpipe emission rules for cars and light trucks, issued in 1999 and effective with the 2004 model year, were designed to meet the needs of the Northeast and Mid-Atlantic areas of the country. These standards focus on the Nitrogen Oxide (NOX) reductions that are of particular concern here because NOX is the controlling factor for smog in these states. In contrast, Cal/Car standards focus on hydrocarbon (HC) reductions. Federal Tier 2 emission standards have already resulted in a 99% reduction (HC) and (NOX) emissions from these vehicles, and it is a misstatement to claim Cal/Car is cleaner than Federal Car.
California rules require more expensive fuel.
The Federal standards, currently being used by Maryland, also established the maximum feasible emission reductions, considering the local fuels available in this region. The proposed Cal/Car rules for Maryland would not include the California fuel requirements, which are significantly more expensive, that are critical to meeting California emissions standards. In other words, any potential benefit from Cal/Car legislation here is negated by no fuel requirement for California fuel.
Why give California the authority to make environmental policy for Maryland?
Cal/Car is designed for Californiaês climate, not Maryland. With little or no difference between the Cal/Car and Federal Car, there is no reason to risk a bad fit by turning Marylandês environmental policy over to California.
Clean car legislation in Maryland wonêt result in clean cars.
Despite recent reports to the contrary, Maryland faces a lower toxic air threat than most of the states that have already adopted Cal/Car rules. Therefore, it will mislead the Maryland General Assembly into believing they’ve got a complete clean air solution when, in fact, there are many complex, technical issues to consider. The Energy Commission that will be proposed will develop a complete clean air policy in the context of a comprehensive energy plan giving Maryland a chance to lead the energy debate rather than hop on the political bandwagon.
Virginia
Virginia dealers will be sharply focused on Gov. Tim Kaineês transportation plan, which again calls for increasing the tax rate on the purchase of cars and trucks from 3% to 5%, a 67% increase, or about $500 per average vehicle sale.
This is problematic for Virginia dealers who have recently experienced a substantial drop in vehicle sales, according to VADA. Taxes on the purchase of cars and trucks currently produces $1.2 billion in tax revenue for the commonwealth per biennium, from the sale of nearly 1.7 new and used vehicles each year.
VADA with WANADAês support believes that the burden should not be placed disproportionately on vehicle purchasers when there are numerous other sales areas to be included in any such plan, not the least of which, are motor fuels. The additional tax on vehicles penalizes state residents, while it doesn’t address the thousands of out-of-state drivers who use Virginia roads daily.
Other key legislative issues for Virginia dealers include the following:
Warranty Surcharges and Chargeback Collections that will amend Virginia Law by prohibiting the imposition of a surcharge when warranty reimbursement at the retail rate is sought under the code. It will also require manufactures to provide notice of charges to dealersê accounts, while preventing immediate debits for warranty and sales incentive audits until the appeals process is completed.
Motor Vehicle Transaction Recovery Fund legislation will substantially tighten requirements on claims under the fund and establish procedures for the Virginia Motor Vehicle Dealer Board to more carefully evaluate the legitimacy of the amounts of those claims.
Coercion and Repurchase Rights legislation would broaden the prohibition against manufacturers coercing dealers and establish certain rights for dealers on franchise termination.
A Buyer Standing bill would expand the restrictions concerning a manufacturerês approval of the sale of a dealership by requiring that the refusal of the proposed sale by the manufacturer must be reasonable. It also clarifies that the manufacturerês approval must not be subject to unreasonable conditions on the buyer. And it specifies that a requirement imposed by the manufacturer in order to approve the sale which violates the provisions of VA franchise law is by definition unreasonable.
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