2017 Year in review: Trump looms over legislative arena

WASHINGTON—Donald Trump dominated the federal regulatory and legislative picture in 2017.

The year began with President Trump's first executive orders, which froze all federal regulations; ordered federal agencies to identify two regulations to repeal for every one they promulgate; and canceled the Trans-Pacific Partnership, a trade agreement with 11 other countries negotiated by the Obama administration.

It concluded with the Republican-led Congress working to pass sweeping and controversial tax reform legislation. The House passed its tax package along party lines Nov. 13, as did the Senate with its version in the very early morning of Dec. 2.

House and Senate Republicans hope to pass a reconciliation bill by the end of the year, and planned to begin negotiations as early as Dec. 4. However, complications ensued Dec. 2 when President Trump tweeted that he would consider raising the top corporate tax rate in the bill to 22 percent from 20 percent. Capping the corporate tax rate at 20 percent was the cornerstone of tax reform to many Republicans in both the House and Senate.

Although the House and Senate bills differ in many ways, both packages won general approval from business interests. However, some of the provisions in both versions were controversial.

The House version would phase out the estate tax, a goal long sought by the Tire Industry Association and other small business groups, by 2025. The Senate version would double the estate tax exemption but keep the tax on the books.

TIA and other small business associations condemned the House provisions on pass-through entities, in which business owners are taxed as individuals rather than corporations. They complained that pass-through entities did not receive the tax breaks corporations got in the House bill.

The Senate bill offered the same pass-through tax rate as the House bill—25 percent—but Senate leadership said its pass-through rules would be less restrictive than those in the House.

The Senate bill also would repeal the individual mandate portion of the Affordable Care Act. This is perhaps the legislation's most controversial provision, though many business groups supported the American Health Care Act—the Republicans' replacement for the ACA—when it was introduced early this year.

U.S. retailers, including tire and auto parts retailers, dodged a tax bullet in July when House Speaker Paul Ryan, R-Wis., said he would not pursue passage of the Border Adjustment Tax, a Trump administration proposal to tax imported goods as a budget-balancing measure.

Bills that would have benefited brick-and-mortar retailers were introduced in the spring. The Remote Transactions Parity Act in the House and the Marketplace Fairness Act in the Senate took different approaches to allow states to tax online transactions, but neither bill advanced.

In the area of trade, renegotiation of the North American Free Trade Agreement ran into trouble over proposals from the Trump administration regarding regional and local content requirements. Meanwhile, the Alliance for American Manufacturing and other groups criticized President Trump for not getting tough with Asia on international trade, as he promised to do during his election campaign.

On the regulatory side, 2017 could best be described as regressive, in line with President Trump's anti-regulatory executive orders.

In August, the Environmental Protection Agency requested public comments for a review of the Obama administration's vehicle fuel efficiency standards. This was widely seen as consistent with the policies of EPA Administrator Scott Pruitt to roll back as many of the previous administration's regulatory programs as possible.

However, the tire industry encountered problems at the National Highway Traffic Safety Administration.

In December 2016, NHTSA sent the consumer information portion of its tire fuel efficiency rating rule to the White House for consideration.

The tire industry, which had awaited those provisions since March 2010, hoped for a reasonably quick conclusion, but nothing further had been done as of December 2017.

This was not the only—or even the greatest—concern the industry had regarding NHTSA. In September, Anne Forristall Luke, president and CEO of the U.S. Tire Manufacturers Association, wrote President Trump requesting that he appoint a NHTSA administrator as soon as possible.

"NHTSA's role in regulating the motor vehicle, tire and motor vehicle equipment industries requires leadership to ensure implementation of smart, efficient regulations required by Congress to ensure a competitive marketplace," Luke wrote.

Tires played a prominent role in state legislation, with both New Jersey and Arizona approving used tire bills.

New Jersey Assembly Bill 3896, which was advocated by the USTMA, imposes fines of up to $500 for first offenses in selling unsafe used tires and up to $20,000 for third or subsequent offenses.

A-3896 defines an unsafe used tire as having a tread depth of less than 1/16 inch; having any visible damage or improper repairs; having a defaced or missing identification number; or having bulges indicating internal damage.

In Arizona, Gov. Doug Ducey signed Arizona House Bill 2399, which officially defines waste tires to prevent them from being sold as used tires.

HB 2399 defines waste tires in much the same way as New Jersey A-3896. However, it was not a model bill from the USTMA, but written by Myles P. Hassett, a Phoenix attorney who became interested in tire safety after two friends died in a tire-related auto accident.

A third used tire bill, a USTMA-advocated bill that passed the Texas legislature, was vetoed by Gov. Greg Abbott. Abbott objected to the bill's imposition of new criminal penalties.

Two bills before the California legislature—one of which began as a tire-related bill, and the other of which stayed that way—were amended and reassigned to Senate committees before the legislative session ended.

Before opposition from the USTMA and other sources caused it to be rewritten, Assembly Bill 1180 would have required the California Department of Toxic Substances Control to designate tires containing zinc as a priority subject of regulation under the state's Green Chemistry initiative.

Assembly Bill 509 would have required the California Department of Resources Recycling and Recovery (CalRecycle) to replace its current Rubber Pavement Market Development program with a Tire Recycling Incentive Program that would have made payments to entities that purchase waste tire material to use in making products for end-users.

In April, Maryland became the eighth state to ban lead and mercury wheel weights. The bill passed by the Maryland legislature makes it illegal to use external wheel weights containing more than 0.1 percent of lead or mercury by weight beginning in 2020.