WASHINGTON—Tire manufacturers, tire dealers, auto makers and other industry sectors now anticipate—or dread—the implementation of the first multi-year surface transportation legislation to become law since 2005.
H.R. 22, also known as Fixing America's Surface Transportation Act, passed both houses of Congress by wide margins Dec. 3. President Obama signed it the next day.
The 1,301-page legislation authorizes $305 billion worth of funding for surface transportation projects for the next five years. It contains provisions covering every aspect of the nation's highway, bridge, mass transit, trucking and vehicle safety systems, including several directly affecting the tire industry.
It also contains some provisions tangential to surface transportation per se but important to some of the major players in transportation. Among these is a five-year reauthorization of the previously dormant Export-Import Bank.
“This is a victory for manufacturers of all sizes, as well as for workers here in the United States,” said Jay Timmons, president and CEO of the National Association of Manufacturers, regarding reauthorization of the Ex-Im Bank. “The Ex-Im Bank is critical to keeping America competitive in the global economy. Unfortunately, a small but vocal minority of House members let the bank lapse in the first place.”
One thing the FAST Act does not do, the Tire Industry Association noted in its Dec. 7 Weekly Legislative Update, is create new taxes or increase existing ones to fund transportation.
The current federal motor fuels tax remains unchanged at 18.4 cents per gallon. Privatization of highways, a weight-distance tax, a vehicle-miles-driven tax, reinstatement of federal excise taxes on passenger tires and tread rubber, and increased excise taxes on truck tires also play no part in the legislation—all of which TIA has opposed for years, TIA said.
A major part of the FAST Act is a group of provisions directly related to tires. Three of those provisions, written and strongly supported by the Rubber Manufacturers Association, fell under the bill's Tire Efficiency, Safety and Registration Act section. These include:
c A provision for the National Highway Traffic Safety Administration to establish minimum performances standards for tire fuel efficiency and wet traction;
c A provision for NHTSA to develop a consumer-friendly, web-based tire recall lookup tool on its website, searchable by tire identification number.
c A provision for NHTSA to require tire sellers to register the tires they sell at the point of sale and transmit the information electronically to tire makers in an effort to improve consumer contact and response in case of a recall.
This last provision was the most controversial within the tire industry. The RMA insisted a return to mandatory tire registration—which was repealed in the Surface Transportation Act of 1982—was the only way to ensure high registration rates.
However, TIA claimed the old mandatory registration system is hopelessly outdated, and that its reimplementation would be unfairly punitive to tire dealers. Under the mandatory system, independent tire dealers face potential noncompliance fines of up to $700,000 per location.
At TIA's request, House-Senate conferees added a provision directing NHTSA to conduct a study on requiring tire manufacturers to include electronic identification in tires. However, they rejected TIA's proposal to postpone consideration of mandatory registration until the study is completed.
“We are pleased that Congress has passed a surface transportation reauthorization bill that contains the very important safety measures we supported,” said Dan Zielinski, RMA senior vice president, public affairs. The RMA looks forward to working with Congress, NHTSA and other relevant agencies toward implementation of those measures, he said.
Roy Littlefield, TIA executive vice president, said he was pleased Congress included the language calling for a study of electronic information systems in tires.
“We hope this will do what we always hoped for: bring the industry together to discuss what is the best way to proceed on this issue,” Littlefield said.
Sean Kane, president of safety watchdog group Safety Research & Strategies Inc., was disappointed in the FAST Act's tire recall sections.
“The FAST Act turns back the clock on tire registration,” Kane said. “The tire makers again get to foist the defect issue to dealers and customers with no change to their system.”
The FAST Act also contains a measure requiring NHTSA to update its rule covering tire pressure monitoring systems to make sure TPMS cannot be disabled or overridden, as well as one to extend the recall remedy period for tires to 180 days from 60.
However, most tire makers already extend the remedy period beyond 60 days, according to Kane.