Brief to Support Automakers’ Appeal

The Department of Justice has considered filing a brief on behalf of the Department of Transportation (DOT) to support automakers’ appeal of a federal court ruling that upheld Vermont’s efforts to adopt California’s greenhouse gas (GHG) rules for automobiles. The Justice Department requested an extension until April 16 to file an amicus brief in the case. The U.S. Court of Appeals for the 2nd Circuit granted the request March 17.

Automakers are trying to overturn the lower court’s ruling that found California’s GHG rule, which Vermont is seeking to adopt, is not pre-empted by federal fuel economy standards. The lower court upheld Vermont’s rule last September, though the state has been unable to move forward because of the Environmental Protection Agency’s (EPA’s) denial of California’s request for the Clean Air Act waiver. The EPA and the Bush administration continue to argue in favor of the single fuel economy standard mandated by the new energy bill that passed in 2007.

In the brief filed by the auto industry, it is argued that the new energy law’s fuel economy requirements should persuade the court to overturn the lower court’s ruling, which was made before either the energy law or waiver denial were issued. The auto industry is in favor of federal government intervention in the Vermont case, believing this would support the industry’s argument that federal law has long pre-empted anyone but the DOT from setting fuel economy standards.

U.S. Treasury Calls for Federal Level Insurance Regulation

Department has released a blueprint for a stronger regulatory structure that aims to strengthen consumer protections and improve market stability. The blueprint includes many reforms of the financial and mortgage markets. In addition, the U.S. Treasury has formally endorsed the concept of an Optional Federal Charter (OFC) for the insurance industry. The OFC would allow insurance companies to be regulated on the federal level, rather than in the states. The report also calls for the establishment of an Insurance Oversight Office within the Department of Treasury. This blueprint is part of Treasury Secretary Henry Paulson’s plan to improve the competitiveness of the U.S. capital markets in the global marketplace.

Fair Credit Reporting Act Introduced

A federal House bill has been introduced to limit the use of credit scores in setting automobile policy rates. H.R. 5633, introduced by Reps. Melvin Watt, D-N.C., and Luis Gutierrez, D-Ill., would amend the Fair Credit Reporting Act to prohibit certain discriminatory uses of consumer reports and consumer information in connection with certain personal lines of insurance. Sponsors of the bill believe such legislation is needed because minorities are unfairly paying higher auto policy rates since some data indicates they tend to have lower credit scores, even if they have a clean driving record.
Insurance carriers are lobbying against such a bill. They believe credit scoring is a useful tool in predicting the likelihood of a loss on an automobile policy.

The fact sheet on the Treasury Department Report and H.R. 5633 are available on ASA’s legislative Web site, www.TakingTheHill.com. The fact sheet can be found in the Press Center under “References and Bills.” H.R. 5633 can be found under “Track Current Legislation” under the list of federal bills.

Energy Bill Passes Florida Legislature

Florida House Bill 7135 has passed that state’s Senate by a 39-1 vote. This legislation passed the Florida House of Representatives on April 29. The original bill was authored by the House Environmental and Natural Resources Council Committee and contains language aimed at implementing policies related to energy and global climate change.

State Rep. Paige Kreegel offered an amendment to the proposed bill April 29. The California Low Emission Vehicle (LEV) Amendment requires legislative review before the implementation of California standards. The amendment was adopted and included in the final bill that passed the Florida legislature. Florida H.B. 7135 will now move to Gov. Charlie Crist (R) for consideration. The Automotive Service Association believes this amendment will greatly enhance a reasonable approach to the Florida clean car effort, ensuring legislative review of any super warranty initiatives.

Arizona previously rejected the vehicle super warranty in its proposed regulations for the California standard.

To view Florida H.B. 7135, visit ASA’s legislative Web site, www.TakingTheHill.com. The text can be found under “Track Current Legislation” by clicking on “State Legislation.”