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Truck Renting and Leasing Association

The unified voice for truck renting and leasing

Issue Update - March 25, 2016

FEDERAL ISSUES:
 
Comprehensive Federal Tax Reform

  
The Obama Administration and Congress have both publically stated that comprehensive tax reform is needed as soon as possible.  The Administration released a blueprint for tax reform that focused solely on corporate taxes while many in Congress have tried to include individual rates and expenditures into the discussion and debate so that any kind of tax reform is truly comprehensive.
 
To date, the Administration has either said specifically or let it be known to Hill insiders that it would like to close some "loopholes" it sees as troubling - many of which are vital to the TRALA members, their customers and the truck transportation industry.  Issues including accelerated depreciation, the deductibility of interest when utilizing debt financing, and LIFO accounting have all been targeted by the Obama Administration as "loopholes" that need elimination.  In return, the Administration would like to focus on cutting traditional C-Corp tax rates but force many pass-through companies to file as a C-Corp as well, thus placing family-owned businesses into the world of double-taxation.  In Congress, particularly in the House, the focus will be more on creating a level playing simplifying the tax code, and protecting small businesses.
 
To view TRALA updates on tax reform throughout 2013-2015 please click here.
 
On December 15, 2015 leadership of both the House and Senate announced an agreement on an omnibus bill which funds the government until October of 2016 and extends several expiring tax provisions.  Congress took up the measure almost immediately with the House passing the tax extenders on December 17 by a wide margin and then the spending part on December 18.  The Senate took up the combined spending and tax extenders package on December 18 and passed both parts cleanly.  Passage of this legislation avoids having to retroactively reauthorize many expired tax provisions next year, saving time and effort for companies, including many TRALA members, which rely on some of these provisions.  
 
The tax package part of this large omnibus bill makes several expiring tax provisions permanent, while extending other provisions through 2019.  TRALA was pleased to see Section 179 expensing made permanent at $500,000 and $2,000,000 as well as indexing these levels to inflation.  TRALA had worked with many of its allies urging Congress to include this provision in a final bill.  Another key tax issue for TRALA members is the rule for S-Corporations - which requires them to hold on to assets for 10 years to avoid paying a tax on built-in gains - was changed by reducing that time to only five years and it was made permanent.  Additionally, Congress extends the use of Bonus Depreciation through 2019 with a 50% depreciation for 2015-2017 and then a reduction in that level to 40% in 2018 and 30% in 2019. 
 
The omnibus spending bill included several policy riders which had been stalled in Congress but made their way into the final legislation.  Unfortunately, TRALA-supported provisions regarding joint-employers and a proposed rule from the Department of Labor on the expansion of overtime pay were not included.  That said, the omnibus did include language requiring FMCSA to establish a safety and health standard for truckers before they can re-establish rules for Hours-of-Service restarts.
 
Many in Congress had stated that getting many tax extenders made permanent would help jump-start negotiations on a broad comprehensive tax reform bill.  TRALA remains skeptical that anything substantial will happen until 2017 when a new Administration comes into office but TRALA does expect significant negotiations to begin in earnest with congressional staff in 2016 as they craft a blueprint for comprehensive tax reform.
 
LATEST ACTION:  On March 3, 2016 TRALA participated in a meeting with staff for Senate Finance Committee Ranking Member Ron Wyden (D-OR) regarding potential changes to the Modified Accelerated Cost Recovery System (MACRS) and Like-Kind Exchanges (LKEs).  The committee staff briefed TRALA and other stakeholders on their proposals and requested input from those involved in the meeting.  Their proposal is still in the working stages and committee staff is not ready to commit to a full proposal as of yet, but the plan would focus on the pooling of assets similar to a plan proposed by former Chairman Max Baucus (D-MT) during the last Congress a few years ago.  TRALA argued that LKEs and MACRS are essential to the ability of TRALA members to operate their business efficiently and to continue to replace older trucks with newer ones once their effective life-span has been met and that it remains skeptical of any change to the current system unless rate reduction is part of the overall plan.    
 

 
California Meal & Rest Break/Hours of Service Issue

 
In 1994, Congress included language in the Federal Aviation Administration Authorization Act (FAAAA) which prohibited states from enacting or enforcing policies related to "price, route, or service of any motor carrier".  This law established that the federal government was responsible for setting a consistent standard for motor carriers to follow when operating in interstate commerce.  Since then, courts have repeatedly recognized that this language is expansive and applies to anything with a significant effect either directly or indirectly on motor carriers prices, routes or services.
 
Despite being upheld by other courts since its enactment, in 2014 the Ninth Circuit Court ignored the FAAAA provision and allowed a California law to set mandatory times for when meal and rest breaks must be taken.  This ruling went beyond regulating meal and rest breaks for intrastate trucking by forcing these rules on interstate trucks once they enter the state of California.  This issue became not only a threat to federal preemption laws, but also created safety concerns for truck drivers operating in the state.  Additionally, there are concerns that other states have begun to act similarly to California and set their own meal and rest break rules for trucks.  This has begun to create a patchwork of states which have differing rules for meal and rest breaks instead of simply following the federal hours-of-service regulations.  This has caused havoc for TRALA members and others in the trucking industry and it is now leading to lawsuits by trial lawyers looking to profit from this patchwork.
 
In support of one of its members, TRALA wrote an amicus brief to the United States Supreme Court in February, 2015 asking for this case to be heard, but given the number of preemption cases brought each year, the court declined to take up the case, which meant that the law stood and it would need a legislative fix by Congress to ensure their original intent was upheld.      
 
On November 5, 2015 the United States House of Representatives considered H.R. 22, the Fixing America's Surface Transportation Act.  During consideration, an amendment was offered by Rep. Jeff Denham (R-CA) at TRALA and other trucking allies' request which would reestablish the fact that the federal government regulates hours of service and that no state should be allowed to alter this federal law.  This amendment was agreed to by a bipartisan vote of 248-180 and was included in the House version of the highway bill.  Immediately after final passage of H.R. 22, the House and Senate went to a conference to reach an agreement on a final highway bill.  TRALA, along with other industry stakeholders, pushed hard on House and Senate conferees to preserve the Denham amendment in the final conference report.  Despite a large push by the industry, Senate and House negotiators were persuaded by Senator Barbara Boxer (D-CA) to remove the Denham amendment from the final bill.  The main reason Republicans relented on this issue was that they needed Boxer to deliver Democrat votes for the final bill. 
 
On February 3, 2016 House Transportation and Infrastructure Committee Chairman Bill Shuster introduced H.R. 4441, the Aviation Innovation Reform and Reauthorization (AIRR) Act.  This bill is a multi-year reauthorization of the Federal Aviation Administration (FAA) which sets policies for the aviation sector in America.  TRALA and its allies were pleased that Chairman Shuster included TRALA-supported language in Section 611 of his bill.  The language in this section re-establishes the federal role that says no state may interfere with federal hours or service rules nor impact the existing prohibition of states to alter rates or routes of Interstate Commerce.
 
Section 611 prohibits a state, political subdivision of a state, or political authority of two or more states from enacting any law, regulation, or other provision which would alter the rules and regulations for Hours of Service or alter wages paid on a piece rate basis.  
 
On February 11, 2016 the House Committee on Transportation and Infrastructure held a markup on H.R. 4441 the Aviation Innovation Reform, and Reauthorization Act (AIRR).  During consideration of the bill, an amendment was offered by Rep. Grace Napolitano (D-CA) which would have removed TRALA-supported Section 611 from the overall bill.  TRALA and its allies were able to successfully push back on this amendment and keep section 611 in the final bill.  Rep. Napolitano's amendment was defeated by a vote of 27-31. 
 
While having section 611 included in the final bill is encouraging, to enact the preemption language into the final law that is sent to the President's desk it must pass the Senate and be agreed upon during conference between the two chambers.  In addition, there remain other contentious items in the AIRR Act that face significant opposition, which could threaten passage of the entire FAA bill in the Senate.
 
On March 9, 2016 the Senate introduced an 18-month reauthorization of the FAA which did not include the TRALA-supported FAAAA provision dealing with rest and meal breaks.  The Senate is looking to move an FAA reauthorization through the end of Fiscal year 2017, which indicates it wants to wait to deal with difficult issues like Air Traffic Control Reform after the election when a new President and Congress have been sworn in. 
 
On March 10, 2016 House Transportation and Infrastructure Committee introduced a short-term extension of the FAA which would expire on July 15, 2016.  Since the FAA is set to expire at the end of March it is almost certain that a short-term extension will need to be passed before a longer-term bill can be negotiated.  The House Transportation and Infrastructure Committee has shown strong support for fixing the FAAAA issue and indications are that this provision is not holding up the bill from moving forward, but the difficulties in moving the AIRR Act through the House pose problems for getting the FAAAA into a conference committee.  
 
LATEST ACTION:  TRALA signed onto an industry-wide letter that was sent to members of the House and Senate Appropriations Committees asking that language be inserted into the upcoming 2017 appropriations bill that would address the FAAAA issue to resolve the issue. 
 
Congressmen Kevin Yoder (R-KS) and Henry Cuellar (D-TX) - both members of the House Appropriations Committee - agreed to take the lead on this in the House and wrote a letter on March 17, 2016 to the Chairman and Ranking Member asking that the TRALA-supported language be added to the upcoming appropriations bill.  You can see a copy of the letter by
clicking here.
 
In the Senate, Senators Jerry Moran (R-KS) and Jon Tester (D-MT) also submitted an appropriations request letter to the Chairman and Ranking Member of the Senate Appropriations Committee asking that they include the FAAAA language in the Senate's version of the appropriations bill set for deliberations in the coming months. 
      
 
 
Electronic Logging Mandate (ELD)

 
The Federal Motor Carrier Safety Administration (FMCSA) announced on December 10, 2015 that it had finalized its rule to mandate electronic logging devices (ELDs) in commercial trucks.  The rule requires drivers who currently are mandated to file hours-of-service (HOS) documentation, to do so through electronic means that connects directly to a vehicle's engine.
 
The rule covers technical specifications for ELDs, clarifies the supporting documentation that is required, and addresses technical provisions aimed at ensuring that the ELDs are not used to harass truck drivers.  The actual rule was published the following day, meaning that the implementation date would be December, 2017.
 
TRALA was disappointed to learn that its formal comments regarding a rental vehicle exemption were not accepted by FMCSA for the final rule.  TRALA's key concerns focused on trucks that may be rented to multiple consumer and commercial entities with varying obligations to comply with logging rules.  In addition, TRALA expressed concern that different technology platforms used by so many different drivers and companies could be difficult to reconcile with no clear indication by FMCSA as to whether the owner of the vehicle or the operator would be required to maintain that data.
 
Even though the vast majority of TRALA-member customers would be exempt from the rules (due to the 100-mile and 150-mile radius exemptions), a certain percentage of those customers are mandated currently by HOS regulations.  Thus, in effect, the ELD rule could require that every truck in a company's rental fleet be retrofitted and equipped with an ELD to ensure compliance, whether or not the rental customer needs to utilize the technology.
 
Another concern that TRALA and its members share is that he current technology does not necessarily allow for multiple platforms to be utilized in the same vehicle.  Many TRALA members have telematics equipment already installed on their vehicle yet their customers - who under this rule would likely need to have their own portable ELD equipment - may not share that same information. What this means is that information needed by a TRALA member such as collecting miles traveled for IFTA compliance purposes may not work properly if another platform is being utilized by a customer.  There is also seasonal rentals that often use multiple drivers and as of now, technology is not perfected to decipher between different drivers for the same vehicle, which means that it may be necessary for every driver - even part-time seasonal ones - to have their own ELD equipment.  This could be an overwhelming expenditure for rental customers.
 
The final ELD rule can be seen in its entirety by clicking here. There is extensive discussion on TRALA's comments specifically starting on page 276. 
 
LATEST ACTION:  TRALA's Government Relations Committee held a conference call on March 1, 2016 to discuss the issues that the ELD Mandate presents particularly to rental trucks. After the call, TRALA reached out to its members asking for input on potential exemptions and asked that they be sent to TRALA no later than March 17, 2016.
 
TRALA plans to meet again with government officials at FMCSA to ask for a specific type of exemption from having to file electronic logs for rental vehicles given the unique nature of their activities.  It remains to be seen what that exemption would look like but TRALA's secondary approach will be to ask for a delay in enforcement for rental trucks to ensure that the proper technology is developed and works seamlessly by the time the law goes into effect.
 

 
EPA and NHTSA Issue GHG Phase II Rules
 
On July 13, 2015, the Environmental Protection Agency (EPA) and the National Highway Transportation Safety Administration (NHTSA) released Phase II of their push to reduce greenhouse gases from trucks. 
 
This proposal expands on the first greenhouse gas regulations by further reducing the amount of carbon emitted from new model tractors, engines, and trailers between model years 2017 through 2027.  For tractors, and trailers these changes will be implemented in phases with the first benchmark in 2021, the second benchmark in 2024 and then the final goal in 2027. 
 
The reduction in fuel and on co2 emissions for engines will also be phased in between 2017 and 2027. 
 
EPA has historically undersold the costs to industry for their regulations while overestimating the overall benefits to the economy their regulations will have.  In this case they are estimating a $230 billion net benefit to the economy from these regulations while only costing industry $25 billion in new costs.  The EPA estimates this by assuming all fuel savings will result in lower costs of goods for the consumer.  The EPA and NHTSA have requested comments from industry on their proposed rulemaking by October 1, 2015.
 
TRALA sent out draft comments to its Equipment and Technology Advisory Council and Government Relations Committee on July 23 asking for their input and support in an effort to compile official comments to EPA and NHTSA.
 
After hearing from dozens of its members and several of the OEMs, TRALA finalized its official comments and they were filed with the EPA and NHTSA on September 25, 2015.  TRALA's comments ceded that there were some positives within the rulemaking and that improving fuel efficiencies are a goal of the industry but TRALA continues to be concerned about several key issues which include: 

  • Industry is self-motivated to conserve fuel, thus market forces rather than regulation should be applied
  • EPA and NHTSA underestimate the costs to comply and fail to appreciate the unique economic impacts this rule would have on TRALA members
  • The agencies' technology assumptions are overly optimistic
  • The trade-off between NOx emissions and engine efficiency could lead to negative air quality impacts
  • Under no scenario would TRALA support "Alternative 4" which would speed up the full implementation date from MY2027 to MY2024
You may view TRALA's comments in their entirety by clicking here.
 
LATEST ACTION: TRALA and 15 other national trade associations sent a letter to Department of Transportation Secretary Anthony Foxx and EPA Administrator Gina McCarthy on October 1 regarding the Phase II emissions standards rulemaking recently published by the EPA and NHTSA.
 
A major point in the TRALA-submitted comments two weeks ago involved the idea being pushed by some environmental groups called "Alternative 4."  This alternative proposal would have the deadline for implementation of Phase II sped up from the scheduled date of MY 2027 to instead MY 2024.
 
The group letter expresses many of TRALA's core concerns about cost and technology assumptions that have historically been proven to be inaccurate in former emissions rule-makings.  TRALA and the other letter authors argue that by speeding up this process, not only will costs increase, but the manufacturers will not have enough time to perfect the technologies necessary to fulfill the goals of Phase II.  If Alternative 4 were to be accepted, pre-buys, as have occurred in the past, would surely take place and that would lead to a huge financial hit for the manufacturers which serve the entire trucking industry.
 
To view the letter please
click here.
 

 
Lessor Liability Suit in New York
  
In August 2014, the federal Graves Law (49 US 30106) was rejected by the Western District of New York as a defense for the owner/lessor of a truck involved in a fatal crash.  The judge's decision to reject the Graves Law defense in Stratton v Wallace hinges on the fact that the lessee employing the negligent driver is owned by the same corporate entity that owns the leasing company. While noting that the Graves Law protected affiliates of owners, the judge pointed out that only non-negligent affiliates are protected under the federal law.  In this case, the driver was clearly negligent.  The judge wrote "what differentiates this case from the ordinary Graves Amendment case is the fact that, here, the lessor and lessee are owned by the same parent company."
 
TRALA has been in contact with the attorney for the defendant, Great River Leasing.  TRALA expressed its strong support for the ongoing authority of the Graves Law in protecting non-negligent lessors and TRALA's willingness to help defend the law.  The lessor has filed a motion to certify their right to appeal the decision once the overall case is decided (there are still several other defendants).  They have also filed a motion to reconsider the summary judgment decision.
 
TRALA held a Government Relations Committee conference call on October 2, 2014 to discuss in more detail the Stratton v Wallace case with its members.  The Scopelitis law firm also participated on the call and gave a legal insight into the case and has provided TRALA with a synopsis which TRALA is sending out to its Government Relations Committee members.  TRALA's Government Relations Committee will weigh the benefits of filing an amicus brief in support of the challenge to the portion of the Graves Law protecting non-negligent affiliates from vicarious liability.
 
LATEST ACTION:  On November 19, 2014 TRALA filed an amicus brief with the U.S. District Court for the Western District of New York supporting the appeal and overturning of the court's rejection of the Graves Law as a defense for Great River Leasing. TRALA's brief uses legislative history and congressional debate to illustrate the intent of the Graves Law to completely eliminate no-fault liability for renting and leasing companies based solely on vehicle ownership.   You may view the official TRALA amicus brief by clicking here
 

FASB and IASB Lease Accounting Standards Changes
 
The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) continue to work jointly on a project aimed at overhauling lease accounting standards. The new standards are aimed at eliminating off-balance sheet leases by capitalizing all operating leases. However, TRALA remains concerned about the approach being taken by the FASB and IASB Boards. For example, TRALA is opposed to unnecessarily complex requirements that lessees front-load interest and other lease costs.
 
TRALA has submitted formal comments to the FASB and IASB in response to published proposed standards that were part of an Exposure Draft released in August 2010. TRALA has also met with FASB Board members and staff, as well as continuing to submit unsolicited comments during the Boards' deliberations.
 
As an example, in October, 2012 TRALA wrote a joint letter with the National Private Truck Council to the Chairmen of the Financial Accounting Standards Board and the International Accounting Standards Board outlining the two organizations' concerns about recent decisions by the Boards in their Lease Accounting Project.  The letter partly focuses on the FASB/IASB Boards' decision to allow lessees to account for real-estate leases using straight-line expensing but requiring lessees to account for equipment leases using an amortized, front-loaded expense model that distorts the true value of the asset and the lease transaction.  The letter also highlights recent input from the investor and financial analyst community stating that the capitalization of all operating leases would not increase transparency or accuracy in lease accounting.   
 
To view this letter, please click here.
 
TRALA was joined by other lessor organizations in meeting with FASB Board Member Russ Golden on March 18, 2013 to discuss the project and the pending release of a second Exposure Draft. TRALA again argued for lessee expenses to be accounted for in a straight-line expense model rather than an amortized, front-loaded model. TRALA also argued that in defining a lease, it is important to recognize the service agreements that are often elements of a full-service truck lease.
 
On May 16, 2013 the FASB and IASB jointly issued a revised version of its Exposure Draft, revealing new proposed standards for lease accounting. You may view a copy of the Exposure Draft by clicking here.
 
Several revisions from the 2010 Exposure Draft included new provisions that addressed some of TRALA's stated concerns, including the decision to continue to treat short-term rentals (1 year or less) under the current standards; easier accounting for contingent rents without estimations of variables; simpler incorporation of renewals into definition of lease terms.  However, there are still provisions that TRALA intends to fight, including the front-loading of costs in the amortized accounting model for vehicle leases
 
TRALA held an in-depth webinar to fully brief members on the new FASB/IASB Exposure Draft on Thursday, May 30, 2013. To view the webinar presentation on the newly revised FASB/IASB proposed lease accounting standards, please click here .
 
On July 11, TRALA met with FASB Chairman Russ Golden in Washington, DC to outline concerns with the proposed standards in the most recent Exposure Draft.
 
On September 4, 2013, TRALA and several other organizations met via conference call with four Board Members from the International Accounting Standards Board (IASB).  It was apparent at the end of this call that several IASB Board members have already developed positions on the project and they were unlikely to be swayed by further public comments.  One IASB Board member went so far as to call all leases nothing more than "disguised financing."  Also on September 4, 2013 TRALA was joined by several other organizations in a meeting with the SEC's Chief Accountant Paul Beswick and his staff.  As expected, the SEC was very reserved in its statements and in expressing willingness to lean too heavily on the FASB during its standard-setting process.  However, there was some agreement by the SEC that the current standards proposed in the most recent Exposure Draft needed to be simplified.
 
On September 10, 2013 TRALA submitted this comment letter to FASB in response to the most recent Exposure Draft. Also on September 10, TRALA joined in signing a letter to the FASB from a broader group of stakeholders working through a coalition at the U.S. Chamber of Commerce. TRALA also distributed to its FASB Working Group and Government Relations Committee a guidance document to help other companies and interested parties write their own comment letters. This document was later posted on TRALA's website for access by the full TRALA membership.
 
On September 23, 2013 TRALA took part in a roundtable discussion of the proposed Lease Accounting Standards with members of both the FASB Board and the IASB Board. The meeting took place at FASB Headquarters in Norwalk, CT. Much of TRALA's discussion highlighted the non-asset components of a full service lease, as well as the points made in TRALA's September 10 comment letter.  FASB Board members were very engaged with ideas being discussed by the 14 stakeholders at the lead table, while the IASB Board members appeared to have already established their opinions on most issues.  Several stakeholders embraced TRALA's suggestion of a dollar amount or lease term-based threshold for materiality, as outlined in the TRALA comment letter.
 
TRALA's discussion points at this roundtable were:
 
  • The proposed standards were overly complex for lessees, especially for smaller businesses;
  • The costs associated with implementing the changes were not justified by significant improvements in financial reporting;
  • Full service leases are executory contracts with significant non-asset components designed to provide lessees with fixed payment obligations in return for the right to use assets without bearing risks of ownership, including maintenance, regulatory compliance and residual values;
  • Straight-line lease expensing more accurately reflects the economics of these transactions than the proposed interest and amortization model;
  • Variable payments should not be accounted for until the event occurs;
  • Re-assessments should only be required on an annual basis;
  • If unbundling asset and non-asset components of a lease payment is required, lessee should be able to use market estimations rather than specific, and often proprietary information to bifurcate costs.
  
The FASB and IASB staff presented a tentative timeline in which they expect to issue a final standard in early 2014.  TRALA will continue to actively engage the standard setting Boards at every opportunity, as well as work with coalition partners to influence the process.
 
Several TRALA members and staff had a private meeting with FASB Board Chairman Russ Golden and three other members of the FASB Board in Norwalk, CT on December 20, 2013. The meeting allowed for a comprehensive discussion of practices in the truck renting and leasing industry and the potential impacts of the new standards as proposed. TRALA made a strong case for the continuing viability of operating leases within the truck leasing industry. TRALA also emphasized the substantial executory costs and services built into full service truck leases. Importantly, in response to TRALA's direct inquiry, the FASB made it clear that their first obligation was to users of US GAAP, not to the IASB or other foreign-based interests.
  
One week after FASB Board Member Daryl Buck held a business workshop with TRALA members at the 2014 Annual Meeting, the FASB and IASB Boards met to further deliberate on the Lease Accounting Project.  After an initial review, many of the changes TRALA Members pushed for in the workshop were adopted by the FASB.  Among the most important:  
 
  • The FASB and IASB have made a preliminary decision to diverge on their definitions of the lease accounting model.  The FASB has changed its position and wants to recognize all existing operating leases as Type B leases, recognizing a single total lease expense. This change brings FASB into agreement with one of TRALA's biggest concerns about the project and is the result of years of effort on the part of TRALA and its allies to educate FASB about the nature of operating leases.
  • The IASB still wants all leases to be considered as a Type A financing or sale and require lessee expenses to be front-loaded with costs in an amortized model. 
 
TRALA believes that this is a positive development in the Lease Accounting Project and will continue to work with the FASB as they continue their discussions on the overall direction of the project.  The project is expected to be completed in mid-2015 and the implementation date is expected in 2018.
 
The FASB continues to diverge from IASB and it is now clear that the FASB Accounting Project will be much more favorable to TRALA members than the IASB Project would have been.  There still remains key reasoning for leasing vs. purchasing even though lessees will have to capitalize leases once the document is finalized.  Bankruptcy law and tax rules will remain the same for lessors and the FASB will adopt a two-lease model vs. a one-lease model for IASB which is good for U.S. companies.
 
The timing for the FASB standards to be released is likely to be middle to late 2015.  The Boards are in the final deliberations now with separate standards and the implementation date is still to be determined but unlikely to take effect until at least 2018.
 
TRALA, working through its consultant Bill Bosco, has developed some updated slides on the impact the FASB Project will have.  You may view them by clicking here.
 
TRALA is working on a document with its accounting adviser that should be available by the end of November that will illustrate the key provisions in the final Accounting Project that impact the truck renting and leasing industry.  This document will not only review the changes that are being made by the FASB but also the benefits and explanations lessors can use and discuss with their lessees to better explain the continued benefits to leasing vs. purchasing.  Once this document is finalized, TRALA will distribute it to the membership.
 
TRALA, through its accounting consultant, completed its FASB White Paper and distributed it the membership on November 23, 2015.  The document gives both an overview of the final standards that are expected to be released in early 2016, as well as reviews the benefits to leasing that remain after these standards take effect in 2019.  The paper allows lessors the ability to discuss the accounting changes with their lessee customers now so that there are no surprises as the changes that will take place occur over the next few years.
 
TRALA worked in conjunction with the US Chamber, ELFA and a handful of other leasing organizations to push for FASB to diverge from IASB and in many instances they did exactly that.  While there will be changes that lessors and lessees will need to make to their internal systems, the draconian impacts that were originally expected are mostly now gone, particularly on the FASB accounting lease rules which the vast majority of TRALA member leasing companies are most impacted by.
 
You may view a copy of TRALA's FASB White Paper by clicking here.
 
TRALA has been told that the FASB final rules will be released in February, 2016.
 
LATEST ACTION:  The FASB released their final rules for lease accounting on February 25.  The final standards were in line with what TRALA had been told for months was going to happen with several TRALA-supported changes incorporated into the final version.
 
While the new rules will require lessees to bring the cost of operating leases onto their balance sheets for the first time, these payments will not be considered debt and expensing will be straight-line and not front-loaded.
 
The effective date for public companies will be the fiscal year beginning after December 15, 2018 and for private companies it will be the fiscal year beginning after December 15, 2019 with interim reporting periods starting after the fiscal year beginning after December 15, 2020.  What that means is that public companies will have to show three years of P&L and two years of balance sheets and private companies will have to show two years of their financials.  This is important because leases will have to be capitalized in the earliest period which would mean private companies begin to show their financials in early 2019 and public companies in 2017.
 
To view the final rule issued by the FASB,
click here.
 

 
National Labor Relations Board Anti-Business Issues
 
The National Labor Relations Board (NLRB) has taken multiple actions in the past few years that are unprecedented in the history of the organization.  The NLRB majority has been led by far-left, pro-union members in their attempts to enact "Card Check" through the regulatory process since President Obama took office.
 
Four issues in particular have been pushed by the NLRB that TRALA has opposed through its active membership in the Coalition for a Democratic Workplace (CDW). These issues include: 
 
  • "Micro-unions."  This would reverse 50 years of law by allowing sub-groups within a workforce at a single company to unionize.
  • "Ambush elections."  This rulemaking would reduce the number of days an employer can respond to an attempted unionization from 60 days to as few as 10.
  • "Persuaders."  This rule would force any attorney or consultant that gives advice for a company under a union push to file several reports with the Department of Labor.
  • "Notice Posting requirement."  This rule would require nearly all businesses to post notices telling employees that they have the right to form unions.
 
To view TRALA updates on the NLRB throughout 2013-2015, please click here.
 
The Department of Labor (DOL) sent its persuader rule to the Office of Information and Regulatory Affairs (OIRA) for review the week of December 7.  While the Fall Regulatory Agenda has the persuader rule scheduled to be finalized in March 2016, DOL is not even planning to propose changes to a critical component of the persuader reporting process (Form LM-21) until September 2016.  Because of this, TRALA and several other organizations working with the CDW is formulating a letter asking DOL to consolidate these two rulemakings because they are so intertwined.  This letter will reference an earlier letter that TRALA and others sent to DOL and asks OIRA to send the persuader regulations back to DOL in order to be consolidated with the pending changes to the reporting process. 
 
Unfortunately, an attempt to add language into the omnibus bill disallowing a rulemaking from taking place on the overtime pay rule, the joint employer rule or the persuader rule did not survive into the final omnibus legislation.
 
TRALA participated in a lobbying committee meeting with the CDW on March 7, 2016.  The meeting focused on legislative and regulatory issues affecting employers and the efforts to alleviate some of the pressure being placed on employers by the DOL and NLRB.  Much of the meeting focused on the impending Persuader Rule which is expected to be released by the DOL later this month.  It is expected that multiple lawsuits will be filed challenging the Persuader Rule once it is introduced due to the reporting requirements placed on law firms and trade associations which advise its membership.  Additionally there will be a strong push to get policy riders placed in the Department of Labor, Health and Human Services Appropriations Act for Fiscal Year 2017 if it is brought to the floor for a full vote.  TRALA along with CDW are working on a member letter which would be sent to Chairman Hal Rogers (R-KY) and Chairman Tom Cole (R-OK) urging them to include limitation amendments on the Persuader Rule, Joint-Employer Rule, Ambush Elections Rule, and Micro-Unions in the Labor Health and Human Services Appropriation Bill.  
 
LATEST ACTION:  The NLRB released its final Persuader Rule on March 23, 2016.  This rule targets companies that hire outside counsel to advise them on labor policies or union organizing efforts.  The goal of this rule has been to force any adviser on labor policy to disclose to the government who they are advising as well as who their clients are.  This is a broad expansion of the rule which was originally intended to focus on outside employees who were brought in to discuss unionization efforts with employees.  TRALA is currently reviewing the rule in its entirety and expects to discuss the details more thoroughly with CDW in the coming weeks.  TRALA fully expects there to be lawsuits filed in different federal courts challenging this rule.

 
Federal Excise Tax
 
TRALA has supported a reduction or elimination of the 12% federal excise tax (FET) on the purchase of new trucks and equipment.  This excise tax has been in place since the adoption of Title 26, Section 4051 of the Internal Revenue Code of 1982 and was reestablished under the Internal Revenue Code of 1986.
 
Last year, House Concurrent Resolution 33 was introduced in the U.S. House of Representatives, led by Congressman Reid Ribble (R-WI) and Tim Walz (D-MN).  HCR 33 would put Congress on record in opposition to any increase in the FET on heavy-duty trucks and trailers. HCR 33 can be viewed in its entirety by clicking here.
 
A few years ago, TRALA supported federal legislation that would have replaced the 12% FET with an increase in the diesel fuel tax.  That bill faced opposition from Members of Congress unwilling to sign a tax increase of any kind into law even though it had an elimination of another tax because there was concern that diesel prices were already historically high and that even with an offset of repealing the FET, many felt it was a politically difficult idea to move in Congress. 
 
With diesel prices now significantly lower and a growing sense that the Highway Trust Fund is in need of help from non-traditional methods, TRALA is once again going to engage in a proposal to replace the FET with an increase in the diesel tax.
 
TRALA met with Congressman Earl Blumenauer (D-OR) on January 8, 2016 to discuss a strategy for building support for the plan to replace the FET.  At this meeting the Congressman asked TRALA directly for assistance with Republican Members of Congress that would be willing to co-sponsor the legislation at introduction which he has targeted for this spring.  TRALA has begun to reach out to its allies in Congress to gauge their support in this effort.  TRALA  will also work with some of its members to meet with a coalition of companies and Members of Congress sometime in February.
 
LATEST ACTION:  TRALA met with staff for Congressman Mike Kelly (R-PA) the week of February 14 and he has agreed to be a lead sponsor for the future FET repeal legislation TRALA is supporting.  He and Congressman Blumenauer have asked the Joint Committee on Taxation to determine how much the diesel tax would need to be raised in order to create a revenue-neutral bill.  That is likely to take a month or two at which time TRALA has agreed to help organize a meeting with both Congressmen and supporters of the measure.
 

 
Tolling
 
Toll operators all across the country are beginning to work towards implementing nationwide tolling interoperability, in order to comply with a mandate from Congress that was contained in the latest highway bill.  As part of the MAP-21 highway reauthorization bill, Congress mandated that a nationally interoperable system for collecting tolls electronically be established within four years. One of the publicly stated goals of the toll operators is for states to be able to suspend both in-state and out-of-state registrations for vehicles that have outstanding toll violations. TRALA has concerns with this and other practices of the tolling industry that have plagued the vehicle renting and leasing industry for years, so TRALA has released a white paper in order to go into great detail about its concerns.
 
TRALA sent its white paper to the American Association of Motor Vehicle Administrators (AAMVA) on January 15, 2014. AAMWA is helping to formulate an interoperability strategy in accordance with the mandate from Congress. TRALA intends to work together with AAMVA leading up to the implementation of nationwide tolling interoperability to address the challenges its members face. 
 
Truck renting and leasing companies are often held financially responsible for toll transactions or violations incurred by their customers. Toll violations incurred by vehicle operators are often enforced by checking the rented or leased vehicle's license plate to find the registered owner, which is the renting and leasing company, who then receives a notice of violation for the toll, plus penalties. In most states, TRALA members have some statutory authority to transfer liability for the violations from themselves to the vehicle operator so the toll operators can invoice the responsible party. However, in many cases, that is generally where the process breaks down.  
 
Whether it is the lack of a response or action by toll operators upon receipt of transfer of liability paperwork, or the lack of a timely notice to lessors in the first place, TRALA members have generally found the current practices for attempting to absolve themselves from violations incurred by the actual vehicle operators to be inadequate.
 
TRALA, along with some of its members, met with the AAMVA on February 27, 2014 to discuss concerns with tolling practices that negatively impact the truck renting and leasing industry, and to ask that AAMVA support the needed changes outlined in TRALA's white paper as they work towards implementing interoperability in order to address TRALA's concerns.  AAMVA said that it understood many of the issues TRALA raised and would like to work cooperatively to find solutions that could help mitigate the concerns TRALA raised in its white paper.
 
In other tolling news, The Alliance for Toll-Free Interstates (ATFI), of which TRALA joined at the end of 2013, released links to their Facebook and Twitter accounts espousing the new coalition and the work they are doing to end tolling on existing Interstates. You can follow ATFI by clicking on the following links:
 
ATFI on Facebook
 
ATFI on Twitter
 
TRALA participated on an ATFI-hosted strategic planning conference call on December 12, 2014 to discuss its approach in the next Congress.  It was decided that an ATFI letter to members of Congress would be drafted to reiterate the alliance's position that it opposes tolling existing interstates.  The Alliance will also push members of Congress to introduce legislation that would repeal the Federal tolling pilot program law that authorizes up to three states to toll existing interstates. Lastly, TRALA will take part in a workshop on January 29, 2015 hosted by the ATFI that will be attended by House Transportation and Infrastructure Committee staff members to further educate them on the problems with tolling existing interstates.
 
TRALA has learned that the Senate Environment and Public Works (EPW) Committee Chairman James Inhofe (R-OK) is leaning toward supporting an expansion of the federal pilot project which allows states to toll existing interstates as part of the next federal highway bill. This news comes after Chairman Inhofe had repeatedly told the Alliance for Toll-Free Interstates (ATFI), of which TRALA is a member, that he did not want the "distraction" of including toll-related provisions in the highway bill.  TRALA has been told that Chairman Inhofe's proposal would expand the number of states eligible to toll existing highways under the pilot program from the current allotment of three states, up to five states.

TRALA, through ATFI, is working to convince Chairman Inhofe to withdraw this proposal.  The alliance is also pushing other members of the EPW Committee to oppose this effort. There is a markup of the legislation scheduled for June 24, 2015 so TRALA and the alliance will continue to urge opposition to any proposal to expand the ability to toll existing interstates in advance of the markup. 
 
TRALA and the Alliance for Toll-Free Interstates (ATFI) aggressively lobbied the U.S. Senate Environment and Public Works Committee (EPW) Members in response to their reported plan to expand the federal pilot project that allows states to toll existing interstates as part of the proposed highway bill known as the DRIVE Act.  The current pilot project, known as the Interstate System Reconstruction & Rehabilitation Pilot Program (ISRRPP), has been law for 17 years, and has provided up to three states the opportunity to toll existing interstates, yet no state has successfully implemented such tolls. The EPW Committee had been planning to expand the pilot program from three to five states, but outreach by TRALA and ATFI forced them to abandon that plan. However, the bill approved by the EPW Committee lowers the bar for approval of a state application to toll an existing interstate, and it also implements time restrictions designed to serve as a "use it or lose it" incentive, with the goal being to prevent states from holding one of the slots in the pilot project but not actually implementing tolls.
 
The bill would also create a "toll credit marketplace" pilot project, with as many as ten states potentially being allowed to participate in the program. Per current law, toll credits are excess funds generated from a toll that can be used as a substitute for a state match in financing a federal transportation project. Under the pilot program, states would be able to sell or transfer toll credits to other states, and use the proceeds for any project that is eligible under the surface transportation program established by Congress. The main goal of the proposed toll credit marketplace program is to determine if such a system might be feasible to implement nationwide.
 
The language lowering the bar for a state to toll existing interstates, as well as the "use it or lose it" provisions are in the current version of the Senate's highway bill.  There have been rumors that the House Transportation and Infrastructure Committee might move to adopt similar language as part of a highway bill.  The House recently passed a five month extension of the current highway authorization, which did not include the language relating to the tolling pilot project. However, if the extension is ultimately agreed to by the Senate, it is likely that later this year the House will work on crafting a long term highway bill, and that is where the House might look to include the language that expands the tolling pilot project.  Accordingly, TRALA and ATFI feel that now is an appropriate time to officially get "on the record" with House members to state opposition to expanding the tolling pilot project in any way.  TRALA and other ATFI members are putting the finishing touches on a letter that will be sent to House Transportation and Infrastructure Committee Members. TRALA also has been, and will continue to, directly urge Members to oppose tolling expansion.
 
TRALA has heard that the House transportation reauthorization bill that is scheduled to be introduced the week of September 13 with a tentative markup date of September 17 will have a tolling expansion included in its text.  TRALA, working in conjunction with other ATFI members plan to activate a grassroots effort to contact the House T&I Committee urging them to reject interstate tolling expansion.  TRALA has also been asked to be quoted in a letter being circulated to key legislators arguing that tolling is a failed revenue generation method and inefficient compared to fuel taxes.
 
TRALA was pleased that the House's highway reauthorization bill differed from the Senate in its views on tolling.  The House bill does not expand the program to additional states, and it places additional requirements on states attempting to toll existing highways under the Interstate System Reconstruction & Rehabilitation Pilot Program.  Additionally the House removes federal participation from the initial construction of new bridges or tunnels that are tolled.  TRALA continues to push both the House and Senate to abandon the idea of expanding tolling to existing Interstate highways and instead embrace other funding mechanisms that are more efficient.
 
LATEST ACTION:  The final highway reauthorization bill that came out of conference adopted the House language regarding the Interstate Reconstruction and Rehabilitation Pilot Program, which allows three states to place tolls on existing interstate.  The conferees create parameters for the three current states enrolled in the program to either come up with a plan or be removed from the pilot program.  TRALA had lobbied Congress to ensure that the program was not expanded to include additional states. 
 

 
STATE ISSUES:
 
Florida
 
Legislation to Increase State MFR
 
The state of Florida has introduced legislation in both the House and Senate which would increase the Minimum Financial Responsibility (MFR) dramatically for motor vehicles.   The bills, S.B. 1380 and H.B. 1193, would dramatically increase the MFR to $100,000 for injury to one person, $300,000 for injury to two or more people and $50,000 for property damage.  The current MFR levels in the state are $10,000/$20,000/$10,000.
 
Furthermore, these bills seek to add additional requirements on companies which rent or lease vehicles by making sure that they verify that renters of vehicles have a valid driver's license and could hold them legally responsible if they rent to a person who may have an illegal or fake ID.  TRALA has engaged with its allies in the state of Florida to make sure that neither of these bills moves forward. 
 
You may view a copy of SB 1380 by clicking here and HB 1193 by clicking here
 
TRALA has reached out to some of its Florida-based members as well as its lobbyists on the ground to begin to organize a coordinated effort to defeat both pieces of legislation.
 
TRALA has received assurances from the Senate sponsor that the legislation will not move in 2016.  In addition, the sponsor has indicated to one of TRALA's members that she is open to meeting with the truck renting and leasing industry to better understand the impact that increases to the MFR in Florida would have on rental trucks in particular.
 
LATEST ACTION:  The Florida Legislature adjourned on March 11, 2016 without taking any action on either SB 1380 or HB 1193.  TRALA still plans to sit down with state lawmakers to better educate them on the issues involving rental trucks and the concerns TRALA has over the idea to increase the MFR on those vehicles later this year.
 

 
Louisiana
 
Interstate Exemption and Sales Tax Overhaul

 
The State of Louisiana is in a serious budget crisis with the new governor threatening to shut down several state entities unless a resolution can be reached with the legislature to close the gap in funding.
 
As part of this process, the governor has supported the removal of the sales tax exemption for trucks used in interstate commerce.  This would have a significant impact on its members and so TRALA began to lobby against this proposal in the legislature the week of February 22.  Given that Mississippi, Arkansas, and Texas all grant a sales tax exemption to trucks used in interstate commerce, this proposal could easily lead to the exodus of Louisiana-based motor carriers to surrounding States.
 
In addition to the interstate exemption, House Bill 53 was introduced on February 14, 2016.  The legislation would eliminate and replace the existing property tax on business inventories and the State income tax credits associated with the repeal of a state sales and use tax.
 
TRALA has learned that several prominent lawmakers will support TRALA's position on the Interstate exemption and oppose its removal.  That said, there is growing consensus that something must be done to address the revenue shortfall in Louisiana and so TRALA will not oppose a small sales tax increase if it is done across the board without any discrimination against leasing or renting particularly.  It remains to be seen if the legislature can finalize a compromise with the governor in the special session that ends on March 9.
 
LATEST ACTION:  After lobbying members of the state legislature, TRALA was given assurances that they would support TRALA's position on the Interstate exemption and oppose its removal.  Upon the adjournment of the special secession on March 9, TRALA was informed that the Interstate truck exemption was still in place through House Bill 61 and 62.  TRALA will remain vigilant as the regular session starts up next week to ensure that this exemption does not face another attempt at elimination later in 2016.
 

 
Rental Tax
 
House Bill 39 was introduced on February 16, 2016.  This bill would place an automobile rental tax on vehicles operating in the State.  The tax would be two and a half percent for the State and one half of one percent for localities placed on the gross proceeds derived from the short-term rental of a vehicle subject to a rental contract.
 
The definition of an "automobile rental contract" simply means any agreement for a vehicle rented without a driver for a period of no more than 29 days.  There is no clear definition TRALA could find that would explicitly exempt rental trucks and the concern on TRALA's part is that the Department of Revenue or another government agency could interpret this incorrectly in the future.
 
LATEST ACTION:  TRALA was active in voicing its opposition to the state legislature as HB 39 moved through committee but received word that the bill was headed for passage.  Because of this, TRALA approached and convinced its ally in the state, Senator Daniel Martiny (R-District 10), to introduce a TRALA-written amendment on the Senate floor that clearly exempts rental vehicles whose primary purpose is the transport of freight or goods from this rental tax. Martiny's amendment was adopted and the overall bill passed in the House and Senate on March 8 and now awaits the governor's signature.
 
You may view the bill with Martiny's amendment language adopted
here.
 

 
Maryland
 
Short-Term Vehicle Rental Tax
 
Legislation was introduced in the Maryland legislature on January 21, 2016 that would increase the rental tax on rental trucks from their current status of 8% to 11%.  House Bill 165 also decreases the automobile rental tax from 11.5% to 11%.
 
The bill would put Maryland at a higher rental rate for trucks than its surrounding neighboring states and be a disincentive to rent trucks.  TRALA is opposing the legislation and working with its lobbyist in the state to stop the bill completely or strip out the language pertaining to rental trucks.
 
LATEST ACTION:  House Bill 165 held a hearing on February 11 where TRALA voiced its opposition to the rental truck portion of the bill.  TRALA then contacted several state legislators to explain the impact of the law and received positive feedback from key legislators that they would not support a tax on rental trucks.  TRALA will continue to monitor the progress of the legislation and work with its lobbyist to ensure its defeat or the removal of language as it relates to rental trucks.
 

 
New York
 
Highway Use Tax
 
TRALA has been working with the New York State Motor Truck Association to find a solution to an issue that has arisen after a recent New York Supreme Court decision was handed down regarding the Highway Use Tax (HUT).  Since the decision, which made the enforcement of the HUT registration and decal unconstitutional due to interstate commerce, the State has taken down the Once Stop Credential and Registration (OSCAR) system.  This has made it nearly impossible for TRALA members seeking to operate legally in New York to receive new HUT decals and registrations.
 
In mid-February New York made OSCAR available for New York plated trucks only, thus creating different methods for in-state and out-of-state trucks to comply with.  Out-of-state trucks can now receive HUT decals for free of charge, but only by going through the slow process of receiving them by mail.
 
Due to the numerous complaints and concerns from TRALA and others, the State is now considering a new method of complying with the court's decision.  On February 12, the Governor of New York Andrew Cuomo indicated that a plan to charge a $1.50 administrative fee for the processing of the HUT decals could be charged to both in-state and out-of-state trucks.  This new fee could be included in the governor's 30-day amendments to the Fiscal Year 2016-2017 budget.  According to state officials, this fee would not raise excess revenue; it would only cover the expense for issuing the HUT decals.  If this proposal is adopted, it could go into effect as early as April 1, 2016.
 
LATEST ACTION:  House and Senate negotiators are locked in a debate over the 2016-2017 State budget.  While several difficult issues are still being deliberated, TRALA has learned that changes to the HUT program as proposed by the governor have been agreed to by both the House and Senate.  The agreed-upon plan would be a $1.50 Administrative fee for both in-state and out-of-state- trucks.  The new budget is supposed to begin on April 1, 2016, however negotiations on this budget could go beyond that date, which would delay the implementation of the new HUT plan.  
 

 
Wisconsin
 
MFR on Rental Trucks
 

TRALA is lobbying to have legislation introduced that would correct a conflict between two separate insurance statutes in Wisconsin law.  The issue first came to TRALA's attention when one of its members was involved in a court decision where the court ruled that a consumer rental truck must meet the Federal Minimum Financial Responsibility (MFR) requirements for common and contract carriers transporting property, instead of Wisconsin law which deals with MFR for rented or leased vehicles.  Wisconsin law requires an insurance policy of $25,000 for the injury or death of one person, $50,000 for the injury or death of more than one person, $10,000 for property damage (25/50/10), whereas federal law for common and contract carriers transporting property by motor vehicle in excess of 10,000 pounds GVW requires a $750,000 policy.
 
The statute which sets the 25/50/10 limits is W.S.A.§ 344.51, which deals with financial responsibility for rented or leased vehicles.  The other statue in question is W.S.A. § 194.41, which deals with contract of liability for damage to persons or property.  This area of law is primarily concerned with the registration and insurance requirements required of common and contract motor carriers and it references the federal law which states that the minimum financial responsibility for transporting property by motor vehicle in excess of 10,000 pounds GVW is $750,000.00.
 
The reason that the minimum insurance limits of $750,000 incorporated by reference into W.S.A. § 194.41 could be mistakenly interpreted to apply to consumer truck rentals is because the first line of W.S.A. § 194.41(1) reads, "(1) No permit or registration may be issued to a common motor carrier of property, contract motor carrier, or rental company..." if they do have an insurance policy to comply with the federal minimum.  It is uncertain why the phrase "rental company" was included in that line.
 
TRALA is working to have the Chairman of the Wisconsin State Senate Transportation Committee, Jerry Petrowski, introduce legislation that would simply remove "rental company" in order to resolve the conflict in statute.  Chairman Petrowski had indicated in the past that he might favor legislation that defines "rental company" for purposes of that section of law, in order to remove the threat the rental vehicles could be subject to the federal $750,000 minimum.  However, TRALA is adamant that he should take the easiest approach and simply eliminate "rental company" from that section, which would bring Wisconsin back in line with the 49 other states that do not hold rental companies liable for meeting the federal $750,000 minimum that applies to for-hire carriers.
 
TRALA's lobbyist has met with Chairman Petrowski and he has agreed to introduce legislation to resolve the rental truck issue.  Because of pushback from the Wisconsin Department of Transportation, instead of simply removing "rental company" from the existing statute, the legislative language will instead offer a definition of rental company that will in essence, remove TRALA member trucks from the requirements to hold $750,000 in insurance as a minimum.  This legislation would move consumer rental trucks into the same class as they currently are in all other states.  TRALA expects legislation to be introduced within the next several weeks.
 
On February 9, legislation was introduced in the state Senate at TRALA's request to clarify that consumer rental trucks are not subject to the federal minimum financial responsibility requirements.  Senate Bill 710 was introduced by Senator Petrowski who also is Chairman of the Senate Transportation Committee which has jurisdiction over this issue.
 
On February 10, TRALA learned that a hearing will be held by the Senate Transportation Committee on Wednesday, February 17.  TRALA was asked to provide a member company to testify on the impacts this change in law would have on the industry.  TRALA has secured Mike Schneider of U-Haul to testify on the industry's behalf.
 
On February 17, a hearing was held where Mike Schneider of U-Haul, representing both his company as well as TRALA, delivered testimony arguing for the adoption of Senate Bill 710.  There was no recorded opposition during the hearing.  Following this, TRALA was informed that a paper ballot would likely be introduced for both Senate Bill 710 and the subsequent companion bill in the House, to be voted on by the State legislature.  That was expected to happen in mid-March right before the legislature adjourns for the session.  TRALA remains optimistic that it has the votes to secure the legislation's passage.
 
Senate Bill 710 was passed out of the Senate Transportation and Veterans Affairs Committee along party lines on March 9, 2016 by a vote of 3-2.  The vote advances the bill forward where TRALA hopes it can be passed by the entire Wisconsin Senate.  However, TRALA has learned that some trial lawyers in Wisconsin have begun pushing Democrats in the legislature to oppose the bill which could turn the bill into a partisan piece of legislation.  That said, TRALA is confident that there is enough strong leadership behind the bill which should help it to pass in the Senate. 
 
Unfortunately, TRALA has learned that the Assembly does not plan to consider AB 941 - the companion bill to SB 710 - during this session.  AB 941 was introduced by Representative John Spiros (R-86) a few weeks ago at TRALA's request.  This turn of events is not due to a lack of interest in the bill, but rather time constraints and procedural issues due to the session nearing a close on April 7, 2016.  While TRALA is disappointed that it appears now the overall legislation is unlikely to be adopted this year, TRALA believes that passing the bill in the Senate this year will help to move legislation more quickly when the legislature reconvenes in January of next year.
 
LATEST ACTION:  TRALA was disappointed to learn that the Wisconsin Legislature plans to end its legislative session early without considering a full vote on SB 710.  There is significant concern about the upcoming election, and as a result, leadership in the state legislature is letting members leave early this year so that they can work on their campaigns.  TRALA is working with both its House and Senate sponsors to make sure that this MFR fix is ready to go at the beginning of the legislative session in 2017.  Getting companion bills introduced, and passing one of them out of committee are significant steps which should allow TRALA the ability to move the bill faster next session, but the results of the November elections could change the political dynamics on the ground.