Issue Updates - September 20, 2024

FEDERAL ISSUES:
 
 
TAX MATTERS
 
Earnings Before Interest, Taxes, Depreciation, & Amortization (EBITDA)
 
During the deliberation of the Tax Cuts and Jobs Act of 2017, TRALA was extremely active in securing favorable treatment for interest deductibility as part of the overall package. TRALA hired one of the country’s preeminent tax lobbyists to help make the case to leadership in Congress. Ultimately, Congress and the Trump Administration agreed to allow businesses to deduct interest up to 30% of adjusted income earnings before interest, taxes, depreciation, and amortization (EBITDA). Additionally, once the COVID-19 (coronavirus) pandemic began to cripple business, Congress chose to expand the interest deductibility provision temporarily to 50% of EBITDA until December 31, 2021 in an effort to help the economy. Unfortunately, the entire provision of EBITDA sunsets on December 31, 2021. In its place interest deductibility would be limited to 30% EBIT, with no depreciation or amortization included in the determination of what constitutes a company’s earnings and therefore the net sum of interest that may be deductible. This change would put capital-intensive and debt-reliant industries such as the trucking (among others) industry at an extremely disadvantageous position. 
 
TRALA was contacted by Senator Roy Blunt’s (R-MO) office in January of 2021 to discuss the issue. TRALA, several other organizations, and many companies have made the case directly to Senator Blunt that changing the way businesses are taxed during an unprecedented pandemic made no sense and that the EBITDA provision should be made permanent. Senator Blunt agreed and promised to offer legislation that would make the 30% interest deduction of EBITDA permanent. Senator Blunt is an influential member of the Senate Republican leadership and the Chair of the Senate Republican Policy Committee so having him as the lead of this effort will greatly elevate the issue as Congress debates a tax bill later this year. 
 
To View TRALA’s activities relating to EBITDA from 2021 – 2023, please click here.
 
 
On January 16, 2024, after almost a year of negotiations, House Ways & Means Chairman Smith (R-MO, 8) and Senate Finance Chairman Wyden (D-OR) released their framework for an updated tax package, including both the return to using EBITDA vs. EBIT as well as implementing Full Expensing, including a pay-for that would result in no significant increase in the deficit. However, with the makeup of Congress and the 2024 elections looming, getting a tax extender package across the finish line will take more work than usual. While having a bipartisan tax package is a very positive first step, because there isn’t a lot of time or “must pass” legislative vehicles for the tax package to be passed by both Chambers of Congress, TRALA does not feel confident that this tax package will be successful before the November elections.
 
TRALA has begun sending out scheduling requests with key congressional offices in both the House and Senate for June 12 when members of the TRALA Board of Directors meets in conjunction with its Executive Committee Meeting on June 13. 
 
The focus of the meetings will be the House bill, H.R. 7024, Tax Relief for American Families and Workers Act, sponsored by House Ways and Means Chairman Jason Smith (R-MO).  Key issues such as EBITDA vs. EBIT and full expensing will highlight the meetings.
 
LATEST ACTION:  TRALA and members of its Board of Directors met with Members of Congress and staff on June 12, 2024, to discuss the potential for tax legislation to make its way through Congress by the end of the year.  House offices pointed to the fact that a H.R. 7024 was already passed and was stalled in the Senate.  This legislation would give relief both for full expensing and EBITDA for the past two years, however several influential Republican Senators want to wait until after the November elections to gauge whether a much larger tax bill can pass in 2025, possibly with full Republican control of Congress.  While this remains to be seen, the fact that H.R. 7024 has not moved over the past few months indicates that it is very unlikely that any major tax issues will be sent to President Biden until – at a minimum – after the November elections.
 
                                                                                                  
Full Expensing
 
As part of the 2017 Tax Cuts and Jobs Act, Congress sought to encourage investment by changing the expensing rules for businesses that purchase new property.  Congress chose to eliminate Like-Kind Exchanges for property and instead allow for immediate 100% expensing of all new property.  Congress elected to make this new 100% bonus depreciation of all new property available to companies for 5 years, with a phase out of 20% reduction in bonus depreciation each year beginning on January 1, 2023.  While it was expected that Congress would maintain bonus depreciation at 100% and not allow the phase out reductions of bonus depreciation to begin, Congressional Democrats and President Biden have not endorsed an extension of 100% bonus depreciation.  As a result, TRALA has joined a coalition of businesses to push for an extension of 100% bonus depreciation in a future tax bill.
 
To View TRALA’s activities relating to Full Expensing between 2022-2023 click here.
 
On January 16, 2023, after almost a year of negotiations, House Ways & Means Chairman Smith (R-MO, 8) and Senate Finance Chairman Wyden (D-OR) released their framework for an updated tax package, including both the return to using EBITDA vs. EBIT as well as implementing Full Expensing, including a pay-for that would result in no significant increase in the deficit. However, with the makeup of Congress and the 2024 elections looming, getting a tax extender package across the finish line will take more work than usual. While having a bipartisan tax package is a very positive first step, because there isn’t a lot of time or “must pass” legislative vehicles for the tax package to be passed by both Chambers of Congress, TRALA does not feel confident that this tax package will be successful before the November elections.
 
TRALA has begun sending out scheduling requests with key congressional offices in both the House and Senate for June 12 when members of the TRALA Board of Directors meets in conjunction with its Executive Committee Meeting on June 13. 
 
The focus of the meetings will be the House bill, H.R. 7024, Tax Relief for American Families and Workers Act, sponsored by House Ways and Means Chairman Jason Smith (R-MO).  Key issues such as EBITDA vs. EBIT and full expensing will highlight the meetings.
 
LATEST ACTION:  TRALA and members of its Board of Directors met with Members of Congress and staff on June 12, 2024, to discuss the potential for tax legislation to make its way through Congress by the end of the year.  House offices pointed to the fact that a H.R. 7024 was already passed and was stalled in the Senate.  This legislation would give relief both for full expensing and EBITDA for the past two years, however several influential Republican Senators want to wait until after the November elections to gauge whether a much larger tax bill can pass in 2025, possibly with full Republican control of Congress.  While this remains to be seen, the fact that H.R. 7024 has not moved over the past few months indicates that it is very unlikely that any major tax issues will be sent to President Biden until – at a minimum – after the November elections.
 
 
Autonomous Trucks and Data
 
Automation in the transportation industry offers a transformational technology for all types of vehicles and the driving public.  Up until recently, autonomous vehicles had been seen as more of a down-the-road technology which would take years of development and testing before ever coming to the market but that has changed.  Federal officials have taken a more hands-off approach to regulation and legislation as it relates to the development of this technology, leaving several states to put in place laws and regulations to encourage Original Equipment Manufacturers (OEM) to develop and test their autonomous vehicles in their individual states.  Though the states have given OEMs different environments to work in, it became increasingly clear that more substantive federal rules would be needed to provide OEMs with a more concise and consistent framework within which they could develop and test autonomous vehicles.
 
To view TRALA’s actions on autonomous trucks and data in 2017-2019 please click here.
 
On December 4, 2019 TRALA received several draft sections of the anticipated autonomous vehicle bill the Senate Committee on Commerce, Science, and Transportation has been drafting.  As TRALA expected, the committee will once again not include trucks in their final autonomous vehicle legislation.  The committee wants the focus of the bill to be on passenger vehicles and not on commercial trucks.  TRALA is disappointed that the committee will not consider trucks in their autonomous vehicle legislation and it will continue to work with its partners to make sure that trucks are treated fairly as vehicles move towards greater levels of automation. 
 
LATEST ACTION:  On February 6, 2020, the United States Department of Transportation (DOT) published in the Federal Register their Automated Vehicles 4.0 program.  This round of autonomous vehicle guidance further details the government’s expanding effort to incorporate autonomous vehicles into the transportation sector.  The document builds upon previous autonomous vehicle guidance which established a baseline for OEMs and the government to follow as the industry builds towards autonomous vehicles.  Autonomous Vehicle 4.0 expands upon the roles of all the government agencies which will be involved in regulating autonomous vehicles as well as establishing a set of guiding principles for the government to follow regarding autonomous vehicles.  In its release the DOT states that its principles for autonomous vehicles will focus on:
 
I. Protect Users and Communities
1. Prioritize Safety
2. Emphasize Security and Cybersecurity
3. Ensure Privacy and Data Security
4. Enhance Mobility and Accessibility
II. Promote Efficient Markets
5. Remain Technology Neutral
6. Protect American Innovation and Creativity
7. Modernize Regulations
III. Facilitate Coordinated Efforts
8. Promote Consistent Standards and Policies
9. Ensure a Consistent Federal Approach
10. Improve Transportation System-Level Effects
 
The DOT has asked that stakeholders submit their comments within 30 days.  You may view the AV 4.0 proposal in the Federal Register by clicking here.
 
 
National Labor Relations Board
 
The National Labor Relations Board (NLRB) had taken multiple actions during the Obama Administration that were 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.  The Trump Administration spent four years trying to un-do those changes by returning the NLRB to a closer version of its historic self.  Now that the Biden Administration is taking control in 2021, TRALA expects many of the same battles to ensue and issues that impact the trucking industry as a whole could take center stage.
 
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’s action on labor issues from 2014-2023, please click here.
 
On January 12, the U.S. House of Representatives passed a Congressional Review Act resolution to revoke the Board’s recently released Joint Employer Rule by a vote of 206-177, with all Republicans and 8 Democrats supporting the resolution. The Senate has not yet voted on this measure, but TRALA expects it to happen in the coming weeks.  That said, the resolution has no power to change the NLRB’s actions and TRALA expects it to continue its anti-business activities as long as President Biden is in office.
 
Additionally, on January 12, 2024, the Department of Labor published a final rule setting forth the test the Department intends to use starting March 11, 2024, to determine whether a worker is an employee or independent contractor under the FLSA. Click here to view the final rule.
 
On February 9, 2024, the Occupational Safety and Health Administration (OSHA) sent its worker walkaround final rule to the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB) for final review. The rule would empower OSHA inspectors to allow union organizers, community activists, or other third parties who do not officially represent the employees or the government to accompany OSHA on an inspection of a workplace, contradicting the plain language of OSHA’s governing regulations, longstanding agency guidance, and past interpretations of federal workplace safety law. It’s a thinly veiled attempt to bypass the NLRA and state property laws by allowing union organizers access to employer property that they would otherwise not be entitled to under the law.
 
In addition, on February 9, 2024, TRALA, through its membership in CDW, and 15 employer organizations filed an amicus brief before the 9^th Circuit in Cemex Construction Materials Pacific v NLRB, in which the Board altered the union representation election process to essentially eliminate secret ballot elections in place of card check. The brief calls on the 9^th Circuit to set aside and decline to enforce the Board’s order, which takes away employees’ right to choose representation without pressure or coercion.
 
The brief explains that the NLRB’s decision in Cemex is contrary to Congressional intent by defaulting union representation to card check rather than via secret ballots and puts the burden on employers to call for an NLRB-supervised election, rather than the union as currently required. The brief also argues that the decision violates Supreme Court precedent in Gissel by making any unfair labor practice sufficient to support the issuance of a bargaining order against the employer, forcing the employer to recognize a union that may not have majority support from the workforce.
 
On February 14, 2024, the District Court for the Eastern District of Texas heard oral arguments in CDW's lawsuit challenging the NLRB’s Joint Employer final rule. On February 22, 2024, the judge issued a one-page order delaying the Rule’s effective date to March 11, 2024. The order didn’t include the court’s reasoning for issuing the delay, but TRALA and CDW hope that it signals a decision favorable to the employer community.
 
On February 21, 2024, the Board issued a decision in Home Depot USA, Inc., holding that the employer violated the National Labor Relations Act by discharging an employee who refused to remove the letters “BLM” - in reference to the Black Lives Matter movement - from their work apron. Home Depot fired the employee in 2021, because the handwritten markings clashed with Home Depot’s policy against “displaying causes or political messages unrelated to workplace matters.” The NLRB found that the employee was protected under the NLRA, because their refusal to remove the marking is considered a “concerted activity” as it was a “logical outgrowth” of prior employee protests about racial discrimination in the workplace.
 
The ruling broadens the scope of protected political action in the workplace and promises to create significant challenges as the Board forces employers to open the workplace up to political discourse.  With this as precedent, workers are likely to be able to wear political slogans against company policy, as long as other workers participate to ensure a “concerted” effort. Further complicating this situation is the Board’s recent determinations that require employers to allow abusive language in the workplace. TRALA, through its membership in CDW, will continue to track this case and look for opportunities to support CDW on this issue in federal courts.
 
On March 7, 2024, TRALA joined 45 other stakeholder groups in writing to Members of Congress – urging them to support H.J. Res 116 and S.J. Res 63. These Congressional Review Act resolutions would nullify the U.S. Department of Labor’s (DOL) recently finalized regulation that sets the enforcement standard DOL will use for determining whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (“FLSA”). The new rule is confusing, difficult to apply, and will invite unnecessary litigation and uncertainty for the tens of millions of workers that derive income as independent contractors.
 
To view the letter, please click here.
 
Also on March 7, 2024, Loren E. Sweatt was reappointed to be a member of the National Mediation Board by a U.S. Senate voice vote. Her term will expire July 1, 2026. Sweatt was previously reported out of the HELP Committee by a unanimous vote of 21-0.
 
On March 8, 2024, the District Court for the Eastern District of Texas invalidated the NLRB’s joint employer final rule. The judge in the case ruled that the NLRB’s final rule was too broad and violated the NLRA. It “would treat virtually every entity that contracts for labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly ... essential terms and conditions of employment.” The traditional joint employer standard - requiring direct and immediate control over workers’ terms and conditions of employment - is now in effect. The NLRB will likely appeal the ruling to the US Circuit Court for the 5^th Circuit.
 
On March 12, 2024, TRALA joined a broad cross-section of stakeholders from California and across the country to oppose AB 2754. To mark our opposition, TRALA and our fellow stakeholders sent a letter to the bill’s sponsor, State Representative Anthony Rendon.  AB 2754 implicates nearly every customer and transportation service provider in the supply chain as jointly liable for payment of wages, worker’s compensation and reimbursement of business expenses where a worker receives, picks up, or delivers freight at the shipper or consignee’s premises, facility or worksite.  Additionally, the legislation uses an impossibly broad definition of motor carrier, defining it to be any entity that utilizes commercial drivers to move freight. Furthermore, this legislation goes even beyond the notorious AB 5 as it casts a wide net in its proposed changes in definition to “client employer” and “labor contractor” – an attack on small business trucking.
 
TRALA will continue to monitor AB 2754 and work with our partners at the California Trucking Association to prevent it from becoming law.
 
On March 21, 2024, the House Education & Workforce Committee approved the Congressional Review Act (CRA) challenge to the U.S. Department of Labor's final rule on independent contractor status by a vote of 21-13. The final rule is confusing, difficult to apply, and will invite unnecessary litigation and uncertainty for the tens of millions of workers that derive income as independent contractors. 
 
On March 29, 2024, the Occupational Safety and Health Administration (OSHA) issued its worker walkaround final rule that allows third parties to accompany OSHA inspectors on facility inspections. OSHA failed to address concerns expressed in comments from industry stakeholders and added the following bolded language that may actually expand the rule: “When the representative(s) authorized by employees is not an employee of the employer, they may accompany the Compliance Safety and Health Officer during the inspection if, in the judgment of the Compliance Safety and Health Officer, good cause has been shown why accompaniment by a third party is reasonably necessary to the conduct of an effective and thorough physical inspection of the workplace (including but not limited to because of their relevant knowledge, skills, or experience with hazards or conditions in the workplace or similar workplaces, or language or communication skills).” 
 
The rule will go into effect on May 31, 2024. 
 
The U.S. Chamber is planning to challenge the rule in court and TRALA, through its association with CDW, plans to support their challenge with an amicus brief. 
 
On May 3, 2024, President Biden vetoed H.J. Res. 98, a Congressional Review Act resolution to nullify the NLRB’s joint employer final rule, despite the resolution passing the House and Senate on a bipartisan basis earlier this year. The Biden Administration claimed that “without the NLRB’s rule, companies could more easily avoid liability simply by manipulating corporate structure, like hiding behind subcontractors or staffing agencies.”
 
On May 7, 2024, the U.S. House of Representatives considered the veto message to accompany H.J. Res. 98 in an attempt to override it. The attempt failed to reach the needed 2/3rd threshold with a 214 – 191 total.
 
LATEST ACTION: On May 16, 2024, Representative Mary Miller (R-IL) introduced a Congressional Review Act (CRA) resolution against OSHA’s worker walkaround final rule. As a reminder, the rule allows union organizers, community activists, or other third parties to accompany OSHA safety and health officers on an inspection of a workplace if as few as two employees request that they do so. If passed, the resolution would nullify the final rule and prohibit OSHA from issuing a substantially similar rule in the future. 
 
On May 17, 2024, TRALA, along with 57 employer organizations, sent a letter to members of the U.S. House of Representatives urging them to support the Miller CRA.
 
The letter explains that the rule will result in individuals with agendas against the employer using the inspection process to redirect OSHA inspections away from health and safety, putting OSHA inspectors in the middle of labor disputes. Moreover, it provides no limitations on how many representatives can join the inspection and provides no guidance on how inspectors are to prioritize, approve, or manage employee requests. Finally, it violates workers’ right to choose their workplace representatives in a free and fair representation election as required by federal labor law. 
 
 
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 released a white paper in order to go into great detail about its concerns.
 
To view TRALA’s actions on tolling from 2014-2022, please click here.
 
On January 24, 2023, members of the Alabama Toll Road, Bridge, and Tunnel Authority approved proposals from the Mobile River Constructors and Kiewit-Massman-Traylor for the construction for adding tolls to Interstate 10 on the Mobile River Bridge and Bayway. The Mobile River Bridge project has an estimated cost of almost $1.5 billion and $1 billion for the Bayway project. Additionally, the project has proposed toll rates of $2.50. The Authority’s approval will allow the Mobile River Bridge and Bayway tolling project to move forward under the framework created by the Eastern Shore and Mobile Metropolitan Planning Organizations (MPO) in 2022. TRALA continues to work with the Alabama Trucking Association (ATA) to ensure that its members are not unfairly targeted under the toll rates.
 
On February 10, 2023, the Rhode Island Department of Transportation (RIDOT) filed an appeal requesting that the ruling, which deemed that the trucks-only tolling program is unconstitutional, be reversed. The trucks-only tolling scheme was created under former Governor Gina Raimondo’s (D) RhodeWorks program that sought to generate $4.7 billion for infrastructure projects across the state. TRALA had supported the American Trucking Associations (ATA) and other interest groups in the lawsuit against the tolling program that would have collected the majority of its revenue from trucks only.
 
RIDOT’s appeal argues that the court should grant oral arguments citing that the court struck down a state statute under the Constitution as it relates to federalism and the Commerce Clause. While TRALA does not anticipate that the court would overturn its ruling, it will continue to engage with its allies in case it should need to act in the future.
 
On February 15, 2023, TRALA received an update from the Pennsylvania Motor Truck Association (PMTA) which said that the Pennsylvania Department of Transportation (PennDOT) is moving forward with the Public-Private Partnerships (P3) project to replace six bridges without any tolls. In 2021, PennDOT released a list of bridges that should be considered for tolling to generate funding through tolling for infrastructure-related projects across the state. TRALA’s main concern was that PennDOT’s proposal called for the use of electronic tolling that would be collected through use of an E-ZPass device or license plate billing, putting the truck renting and leasing industry at risk for being held completely responsible for toll violations.
 
The decision to repair the bridges without the addition of tolls comes after the Legislature passed Senate Bill 382 in 2022 which rescinds the P3 Board’s action that approved the P3 Major Bridge Initiative. The bill states that PennDOT may continue work on the nine bridges, while preserving preliminary designs and engineering plans, but prohibits tolling as the source of revenue to pay for the projects as previously proposed. TRALA applauds that the state recognized the ill effects of adding tolls to existing highways and that the law will prevent a similar situation from occurring in the future by requiring increased transparency and oversight.
 
On February 28, 2023, the United States Department of Transportation (DOT) announced that it will award $60 million in Mega Grant funding to widening Interstate 10 (I-10) in Diamondhead, Mississippi and $150 million to the new construction of a bridge on I-10 over the Calcasieu River in Louisiana, but there would not be any funding to the Mobile River Bridge and Bayway tolling project which is estimated to cost $2.7 billion.
 
The Alabama Department of Transportation (ALDOT) applied to receive funding from the Mega Grant program that was created under the Infrastructure Investment and Jobs Act which President Joe Biden signed into law at the end of 2021. ALDOT announced that the project would be funded through bonding in the amounts of $250 million in state funds and $125 million through the federal Infrastructure for Rebuilding America (INFRA) Act which was awarded to the department in 2019. Additionally, tolling will be the main source of repaying a federal loan of $300 million; however, tolls will not be added to existing routes.
 
ALDOT announced that the toll rates for the bridges project will be $18 for a 5-axle truck with an ALGO sticker and $31.75 without one. TRALA is working with the Alabama Trucking Association (ATA) to ensure that EZ-Pass transponders are compatible. Additionally, TRALA and ATA are advocating for a monthly pass for commercial vehicles.
 
ALDOT anticipates that the project will be constructed by 2028. ALDOT is in negotiations with Omaha-based Kiewit Infrastructure on a joint-venture team to oversee the design and construction of the new bridge with the expectations that a separate design-build contract will be rewarded later this spring on the Bayway portion of the project.
 
LATEST ACTION: On June 1, 2023, TRALA filed, with a handful of other federal trade associations and nearly every state trucking association, an amicus brief in support of the American Trucking Associations in their case vs. the Rhode Island Turnpike and Bridge Authority.
 
As you may recall, TRALA supported the original case with the Rhode Island Trucking Association in their suit against the anti-truck tolling program that went into effect a few years ago.  The tolling plan only targeted trucks on Interstate highways and bridges, making it unconstitutional.  A federal court judge ruled in favor of TRALA and its allies and now the Rhode Island Turnpike and Bridge Authority has appealed that decision.  The Scopelitis law firm handled the brief and worked with TRALA and others to craft the key arguments for why the original decision was correct.
 
You may view the amicus brief by clicking here.
 
 
Federal Environmental Rules and Regulations
 
Climate change has become a major political issue over the past decade and as a result, both the federal government and some states have taken active roles in reducing emissions from cars and trucks.  The states in particular have been led by California which, through its Air Resources Board (CARB), has been aggressively targeting the car and truck market through emissions rules.   As a result, the federal government through the Environmental Protection Agency (EPA) has attempted to work with CARB to ensure a single environmental standard for Original Equipment Manufacturers (OEM) to follow.  However, with the Trump Administration in office CARB has taken a more aggressive path in trying to shape environmental policy in the United States.  TRALA continues to work with the EPA to make sure that any new environmental rules are both attainable for OEMs as well as to ensure they set a level playing field for the industry to follow.
 
TRALA expects several initiatives from the Biden Administration will impact environmental regulations in the coming months and years to be more aggressive on emissions rules that could impact the trucking industry.
 
To view TRALA’s actions on environmental rules and regulations from 2014-2021, please click here.
 
 
EPA NOx Rule
 
On March 7, 2022, the Environmental Protection Agency (EPA) released their long-anticipated Notice of Proposed Rulemaking (NPRM) for the Clean Trucks Plan.  The rule is extensive and seeks to significantly reduce the federal standard for NOx from the current level of 0.2 to either .02 or .05, putting it more in line with the NOx rule produced by the California Air Resources Board (CARB).  Furthermore, the rule seeks to tighten the Greenhouse Gas (GHG) emissions standards created by the Obama Administration beginning with Model Year 2027.  The EPA has set a public comment period of 46 days upon the rule being published in the Federal Register. 
 
The EPA is proposing two options for reducing NOx for the public to comment. Option 1 is the more stringent of the NOx standards and would be a 2-step process that would ultimately reduce NOx by 90% to .02 in Model Year 2031, putting the EPA at the same level as CARB’s NOx standard. Option 2 would require manufacturers to reduce their NOx by 75% to .05 in 2027, setting a national standard that is higher than CARB’s.  The proposed rule would also make changes to testing requirements, warranties, and it extends the useful life of an engine to maintain the new NOx standards. 
 
TRALA has significant concerns with the Biden Administration’s proposal to set a drastically lower national standard for NOx, while simultaneously tightening GHG Phase II standards.  You may view the proposed rule in its entirety by clicking here. 
 
On May 13, 2022, TRALA formally submitted its comments to the Environmental Protection Agency (EPA) on their Clean Trucks Plan.  TRALA incorporated suggestions from its membership as well as suggestions from its friends at the Truck and Engine Manufacturers Association (EMA) and some of the individual OEMs. 
 
In its comments TRALA focused on the economic and technological implausibility of the 90% reduction in NOx proposed by Option 1.  Furthermore, TRALA encouraged the EPA to amend Option 2, which called for a 75% reduction in NOx but would not prevent CARB from adopting a different standard, and to make it a national standard.  This would require the EPA to force CARB as well as several other states that typically follow California’s lead to amend their NOx rules to meet the 75% reduction in NOx proposed in Option 2.  Finally, TRALA encouraged the EPA to use a national standard for NOx to establish a national Clean Idle Standard set at .05
 
You may view TRALA’s comments on the Clean Trucks Plan by clicking here.
 
On December 20, 2022, the EPA adopted its final NOx rule entitled, “Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards.”
 
The EPA believes this final rule will set “stronger emissions standards to further reduce air pollution, from heavy-duty vehicles and engines starting in Model Year (MY) 2027.” Lastly, the EPA projects that, by 2045, this final rule will reduce Nitrogen Oxide (NOx) emissions from the in-use fleet of heavy-duty trucks by almost 50%. 
 
The new EPA standards require heavy-duty commercial vehicles to limit NOx emissions to 0.035 grams per horsepower-hour during normal operation, 0.050 grams at low load, and 10.0 grams at idle.
 
The new emissions standards also impact vehicles by forcing more stringent standards for a longer period of time of when these engines operate on the road. EPA estimates that the new NOx rules will increase the useful life of heavy-duty trucks by 1.5 to 2.5 times and will yield emissions warranties that are 2.8 to 4.5 times longer. These longer useful lifespans and warranty periods in theory should guarantee that as target vehicles age, they will continue to meet the EPA's more stringent emissions standards for a longer period.
 
This final rule is the first of three major actions being taken under EPA's Clean Trucks Plan. By the end of March 2023, the EPA intends to release the proposals for the remaining two steps in the Clean Trucks Plan:
 

• Proposed “Phase 3” GHG standards for heavy-duty vehicles beginning with MY 2027
• Proposed multipollutant standards for light- and medium-duty vehicles beginning with MY 2027.
   

These additional rulemakings will also consider recent congressional action, including resources for electrification from the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) that promote cleaner vehicles.
 
The EPA will likely prioritize releasing decisions on the three pending heavy-duty program waiver requests from the state of California in early 2023. TRALA will continue to work with its allies to address the EPA's drastic emission reduction rules for trucks. 
 
You may view the final rule in its entirety by clicking here.
 
On January 24, 2023, the EPA published its final NOx rule entitled, “Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards.”  There were no changes to this published rule from the December 20^th pre-published version.  TRALA will continue to monitor activity as it relates to the NOx rule.
 
On February 9, 2023, Sen. Deb Fischer (R-NE), along with 33 Republican cosponsors, introduced S.J. Res. 11, a joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Environmental Protection Agency relating to "Control of Air Pollution From New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards."  If adopted, this joint resolution would nullify the EPA’s final NOx rule, which was published on January 24, 2023.  The nullification would be made possible by a legislative oversight tool known as the Congressional Review Act, which is used to overturn final rules issued by federal agencies.  TRALA believes this action to be more “messaging” in nature rather than a legitimate attempt to overturn the EPA rule.  That said, even though on the surface, TRALA would welcome the supportive measure by Congress, it would not prevent states like California from enacting their own more draconian measures and thus, this joint resolution could be seen as the federal government abdicating its authority over emissions and environmental matters to the states which TRALA would oppose vigorously.
 
On April 12, 2023, the Environmental Protection Agency (EPA) announced its proposed Phase 3 greenhouse gas (GHG) emissions standards rule for heavy-duty vehicles beginning with model year 2027. Specifically, this rule would apply to heavy-duty vocational vehicles (such as delivery trucks, refuse haulers, public utility trucks, transit, shuttle, school buses, etc.) and tractors (such as day cabs and sleeper cabs on tractor-trailer trucks).
 
The proposed rule, which would also set further stringent CO2 standards for model years 2028 through 2032, builds upon the 2011 Phase 1 GHG rule and the 2016 Phase 2 GHG rule.  Additionally, the EPA issued a proposed rule that would reduce GHG emissions for light- and medium-duty vehicles.
 
TRALA anticipates that comments will be due around June 1, 2023.  The EPA plans to hold a public hearing prior to the comment period deadline, which will occur on May 2 and May 3.  A separate hearing on the light- and medium-duty vehicles rulemaking will be held on May 9 and 10. TRALA will work with its environmental consultant and its allies to ensure it fully addresses how these rules will impact its membership.
 
You may view the proposed heavy-duty vehicle rule in its entirety by clicking here and the light- and medium-duty rule by clicking here.
 
On April 27, 2023, the Environmental Protection Agency (EPA) officially published its proposed Phase 3 greenhouse gas (GHG) emissions rule for heavy-duty vehicles in the Federal Register.  This action formally began the agency’s 50-day public comment period, which lasted until June 16^th. 
 
First and foremost, the Phase 3 rule will increase up-front truck purchase prices. However, EPA does expect that this upfront cost increase will be recouped due to reduced operating and fuel savings, even though industry experts are not convinced this will occur with the first generation of electric vehicles. . 
 
Second, the proposed Phase 3 rule revises the previously-approved Model Year (MY) 2027 GHG standards to be more stringent for vocational vehicles and day cab tractors.  In addition, it introduces new standards for vocational vehicles and day cab tractors for MYs 2028 through 2032 that will be progressively more stringent. For sleeper cab tractors, the proposed Phase 3 rule introduces new, more rigorous GHG standards for MYs 2030-2032.  Like the Phase 2 GHG rule, the Phase 3 standards are differentiated by vehicle type and use.  Lastly, it’s important to note that the proposed standards do not mandate the use of a specific technology. 
 
While the EPA has a history of underestimating industry costs, they do believe that the MY 2032 average per-vehicle cost increase will be between $8,000 and $11,400 per tractor.  In addition, due to the extra layers of complexity involving added vehicle weight, recharge times, and vehicle range, fleets will likely need to utilize additional zero-emission vehicles (compared to the number of diesel-fueled vehicles) to ensure they can fulfill the hauling needs of their customers. 
 
During the comment period, TRALA staff and its environmental consultant worked with the membership to develop TRALA’s formal comments for submittal.  In its comments, TRALA highlighted that the truck renting and leasing business model is far different than the more traditional sale/purchase model for fleets acquiring trucks.  TRALA’s 24-page comment letter addressed several issues with this latest proposed rule.  TRALA highlighted the disproportionate impact zero-emission vehicle (ZEV) purchases will have on small trucking companies, in addition to their residual resale value.  In addition, TRALA made clear that transitioning to a zero-emissions future is not about flipping a switch.  Such unprecedented efforts will not occur overnight and must consider the fact that internal combustion engines will remain necessary for the trucking industry nationwide for decades to come and that electric infrastructure is not remotely ready to accept the number of vehicles that EPA anticipates moving away from diesel.
 
To view TRALA’s formal comments, which were submitted on June 16, 2023, to the Environmental Protection Agency, please click here.
 
On June 14, 2023, President Joe Biden vetoed S.J. Res. 11, a joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Environmental Protection Agency relating to "Control of Air Pollution From New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards."  Subsequently, the United States Senate attempted to override the President’s veto on June 21, 2023, but his veto was sustained with a vote of 50-50.  These actions come on the heels of S.J. Res. 11’s passage in both chambers of Congress earlier this spring. 
 
In November 2023, the Federal Highway Administration (FHWA) finalized a rule imposing greenhouse gas (GHG) emissions performance measures on state departments of transportation and metropolitan planning organizations despite lacking congressional authority.  Therefore, on February 7, 2024, Rep. Rick Crawford (R-AR) and U.S. Senator Kevin Cramer (R-ND), along with Rep. Sam Graves (R-MO) and U.S. Senators Shelley Moore Capito (R-WV) and Joe Manchin (D-WV), introduced a bicameral Congressional Review Act (CRA) Joint Resolution of Disapproval to nullify the FHWA rule and illustrate Congress’ objection to this federal overreach.  TRALA applauds this bipartisan action by members of Congress from both parties and chambers and will continue to monitor its progress.
 
LATEST ACTION: On July 2, 2024, 157 members of the U.S. House of Representatives and U.S. Senate wrote to EPA Administrator Michael Regan urging that the agency withdraw its final rule entitled “Greenhouse Gas Emissions Standards for Heavy-Duty
Vehicles – Phase 3” that was published in the Federal Register on April 22, 2024. This TRALA-supported letter, which was led by Rep. Randy Feenstra (R-IA) and Sen. Mike Crapo (R-ID) urges the EPA to withdraw the Heavy-Duty truck rule, highlights the cost it would place on average Americans, and describes the burden it will have on businesses across the country.
 
 
National Electric Vehicle Infrastructure (NEVI) Formula Program
 
On September 26, 2022, the Biden Administration approved electric vehicle (EV) infrastructure development plans for all fifty states as well as for the District of Columbia and Puerto Rico under the National Electric Vehicle Infrastructure (NEVI) Formula Program. The program, which provides grants to states and jurisdictions to begin constructing EV charging stations, was established and funded by the infrastructure law known as the Infrastructure Investment and Jobs Act that was signed into law by President Joe Biden in November 2021. The funding under the law provides $5 billion over 5 years to the program and the approval by the administration provides access to at least $1.5 billion through the next fiscal year that will go directly to building electric vehicle chargers across the nation.
 
Funding for the NEVI Formula Program can be used towards the following projects related to the charging of a vehicle:
 

• Upgrades of existing and construction of new EV charging infrastructure;
• Operation and maintenance costs of these charging stations;
• Installation of on-site electrical service equipment;
• Community and stakeholder engagement;
• Workforce development activities; EV charging station signage;
• Data sharing activities; and,
• Related mapping analysis and activities.

 
Of concern to TRALA is that the Federal Highway Administration, under the direction of the Department of Transportation, has limited the eligibility applicants to receive grants only to 24/7 publicly facing facilities, so truck companies will not be able to access the funds. Because the EPA and CARB have proposed extreme zero emission rules and regulations that would require significant reductions of carbon emissions from mainly the trucking industry, TRALA is working with its allies so that federal grants for the construction of EV chargers can be made available for private truck companies as well so TRALA members can ultimately have access to these grants.
 
 
SEC Emissions Rule
 
On March 21, 2022, the Securities and Exchange Commission released its proposed rulemaking on climate-related disclosures.  The rule seeks to require publicly traded companies to report to shareholders and potential investors on their impact on climate change.  The rule will require the largest companies in the U.S. to report climate-related information in line with the rule in their FY24 annual report, with large companies following in FY 25 and smaller companies in FY26.
 
Under this rule, companies will be required to evaluate how any climate-related risks identified by the company have had or are likely to have a material impact on its business and consolidated financial statements over the short, medium, and long term, including how those risks have affected or are likely to affect company strategy, business model, and outlook.  The rule outlines two types of risk:  Physical Risk, which requires companies to report on how and where there business is impacting climate change, and Transition Risk, which requires a business to report on the cost associated with mitigating its impact on climate change.  Furthermore, all companies will be required to disclose Scope 1 (direct) and Scope 2 (indirect) GHG emissions, and most companies will be required to disclose Scope 3 (value chain) emissions information. 
 
Of significant concern to TRALA is Scope 3 which deals with emissions from a company’s value chain, this would include the emissions generated from the transportation of a company’s goods.  TRALA is concerned that its members with customers who are public companies would have to produce the emissions information to its customer.  Furthermore, this emissions information would have to be subject to a 3^rd party audit in order to be included on an annual report, creating significant liabilities for TRALA members. 
 
TRALA has significant concerns with this rule and is working with the United States Chamber of Commerce and other industry allies to submit comments in opposition to this rule.  Unless an extension is approved, the comment period for this rule will close on May 20, and a final rule is expected to be produced before the end of 2022.  This short time frame will not give many companies time to set up an accounting system in order to comply with this rule. 
 
On May 9, 2022, the Securities and Exchange Commission (SEC) announced that it was extending the comment period on its climate-related disclosure rule for an additional 30 days.  The new deadline to comment on the SEC’s climate rule is now June 17. 
 
TRALA has had conversations with many of its members regarding the impact this rule will have on the renting and leasing industry and TRALA plans to submit joint comments with its allies at the American Car Rental Association (ACRA) and the American Automotive Leasing Association (AALA).  These comments will focus on the unique impact this rule will have on companies who rent and lease cars and trucks to public businesses who have to file environmental disclosures.  Additionally, TRALA is working with the United States Chamber of Commerce on a joint trades letter which will allow a large swath of businesses and different industries to comment together on the negative impacts of this rule.
 
You may view the notice in the Federal Register extending the comment period for the SEC’s rule by clicking here.
 
On June 15, 2022, House Energy and Commerce Committee Chairwoman Cathy McMorris Rodgers (R-WA) and House Financial Services Committee Chairman Patrick McHenry (NC-R) led a letter that was signed by 129 fellow Republican Members and sent to the Securities and Exchange Commission (SEC) Chair Gary Gensler about the Commission’s proposal that would require climate-related disclosures from public companies.
 
In the letter, House Republicans urged the Chairman to immediately rescind the proposal so that the Commission can instead focus on its “statutory tripartite mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”.  The letter argues implementing any climate-related rules would exceed the SEC’s authority and fall outside of the scope and expertise of the Commission. Furthermore, the letter explains that it is Congress’ job to write environmental policies and that they should be handled as such.
 
You may view the letter by clicking here.
 
On June 17, 2022, TRALA joined the American Automotive Leasing Association (AALA) and the American Car Rental Association (ACRA) in submitting a letter to Secretary Vanessa Countryman of the Securities and Exchange Commission (SEC) regarding its proposed rules on The Enhancement and Standardization of Climate-Related Disclosures for Investors.
 
In the letter, TRALA urges the SEC to reconsider major elements of the proposed rule. TRALA argues that the SEC’s proposed rule would likely increase compliance costs for reporting and non-reporting TRALA members and may create uncertainty in emissions data reporting. TRALA also highlights how the proposed rule goes well beyond the SEC’s authority and how inconsistency in mandates could create confusion for companies. Lastly, TRALA noted that the proposed rule is unclear in how or when the Commission would take reasonable enforcement actions based on the required information that would need to be reported by companies.
 
You may view the letter by clicking here.
 
On July 14, 2022, TRALA agreed to support Republican Ranking Member Blaine Luetkemeyer of the House Committee on Small Business in a letter he intends to send to the Securities and Exchange Commission regarding its proposed rule known as the Enhancement and Standardization of Climate-Related Disclosures for Investors. The letter, which all Republican Members of the Small Business Committee have co-signed, specifically outlines the harmful impact the rule would have on small businesses.
 
TRALA released a statement in support of the letter saying: “The Truck Renting and Leasing Association applauds Ranking Member Luetkemeyer for his leadership in supporting businesses that would be impacted by the SEC’s climate disclosure proposal.  This rule would negatively affect nearly all of our 475 member companies as well as the millions of small businesses across the country they serve.  While our industry copes with unprecedented inflation and supply chain disruptions, this rule would simply add to the difficulties facing our industry.”
 
You may view the letter by clicking here.
 
On July 20, 2022, Rep. Blaine Luetkemeyer (R-MO), who is the Ranking Member on the House Committee on Small Business, formally submitted his TRALA-supported letter to the Securities and Exchange Commission (SEC).  In his letter, Ranking Member Luetkemeyer urges the SEC to rescind its environmental disclosure rule due to its impact on public businesses and the small businesses who supply them.  The SEC’s proposal would require TRALA members to provide publicly traded companies who lease or rent trucks with the amount of greenhouse gases produced by those trucks, and this data must meet auditing standards.  TRALA pushed back hard against this proposal, by submitting comments urging the agency to rescind this proposal given its impact on the renting and leasing industry.  Additionally, TRALA has worked with the Chamber of Commerce, its allies, and Members of Congress to urge the SEC to abandon this proposed rule.
 
You may view the letter that was sent by Ranking Member Luetkemeyer by clicking here.
 
On Saturday, October 7, 2023, Gov. Gavin Newsom (D-CA) signed both SB 253 and SB 261 into law, requiring businesses to publicly disclose their greenhouse gas emissions in hopes of increasing transparency and, in the bill authors' view, to combating climate change. SB 253, known as the Climate Corporate Data Accountability Act, will require US businesses operating in California and with revenues greater than $1 billion to report their emissions. The emission reporting requirements include scopes 1, 2, and 3, beginning in 2026. For a complete text of the bill, click here. California Senate Bill 261 requires large corporations operating in California with annual revenues over $500 million, to disclose climate-related financial risks and mitigation strategies annually. For the full bill text, click here. 
 
How similar (or different) these new laws will be to the highly anticipated SEC emissions disclosure final rulemaking is still unknown as it has yet to be posted. TRALA staff will continue to monitor the SEC's rulemaking and the implementation of SB 253 and SB 261.
 
On March 6, 2024, the Securities and Exchange Commission (SEC) announced the approval of its climate-related disclosure rules for U.S. public companies, requiring companies to provide information in annual reports and registration statements on climate risks facing their businesses.
 
The same day, 10 Republican-led states filed suit against the SEC to challenge the new federal rules. The lawsuit, which has been filed in the 11^th U.S. Circuit Court of Appeals, argues that the SEC's new rules go beyond the SEC's scope and legal authority.
 
The final rules scaled back the Scope 3 disclosure, which would require companies to disclose the environmental impact of their value chain, which is well outside the scope of their day-to-day operations. TRALA and other opponents to the reporting of companies' Scope 3 impact often cite issues with quantifying emissions outside of their operations, as well as the high possibility of emissions being counted multiple times.
 
You may view the SEC's final rule by clicking here.
 
LATEST ACTION: On April 4, 2024, the Securities and Exchange Commission (SEC) paused its new climate disclosure rule. The SEC’s quick pause on its rule, which was only announced in March, was highlighted in a letter to the 8th U.S. Circuit Court of Appeals. In the letter, the SEC said it is not retreating from its belief that rules requiring public companies to disclose climate risk are both “consistent with applicable law” and within its authority. However, the SEC believes that “given the procedural complexities” of a slew of lawsuits against the rule, a stay would “facilitate the orderly judicial resolution of those challenges and allow the court of appeals to focus on deciding the merits.”
 
TRALA will continue to monitor for more developments with the rule as it is challenged in court.
 
 
Federal Highway Administration’s Greenhouse Gas (GHG) Emissions Final Rule
 
On November 22, 2023, the U.S. Department of Transportation announced a tight deadline imposed in a final rule by the Federal Highway Administration (FHWA). The rule will require states to report, by February 1, 2024, their carbon emission metrics and reduction goals as part of the Biden Administration’s goal to reduce GHG emissions by 50% by 2030 compared to a 2005 base year. Within FHWA’s effort to establish emission-reduction goals came two new developments to note. The first change adds performance management measures on greenhouse gas emissions to existing FHWA national performance measures by creating a national framework for states to track their emissions actions and influence their overall investments. Second, state departments of transportation and metropolitan planning organizations are to establish their own performance measurements to lower emissions associated with roadway travel. House Transportation and Infrastructure Chairman Sam Graves (R-MO) reacted to FHWA’s announcement by reminding the public that “this GHG rule seeks to implement policy that Congress specifically excluded during the development and passage of the Infrastructure Investment and Jobs Act (IIJA).”
 
TRALA Staff will continue to monitor developments with this final rule.
 
 
STATE ISSUES:
 
Tort Reform/Optional Equip Legislation
 
The trial bar has begun a systematic attempt to circumvent the Graves Amendment by claiming lessors are now liable for actions of their customers if the vehicle involved in an accident did not have every possible “safety” equipment installed at the time of the accident.  This is being called “failure to equip” by trial lawyers or “optional equip” by TRALA and its allies.
 
This issue has become one of the most consequential for TRALA as it has multiple members now that have been sued, including a few cases that went to summary judgment, for millions of dollars.  The trial lawyers’ arguments claim that lessors should retrofit a vehicle, even if a customer does not want optional safety equipment, to ensure the vehicle exceeds federal requirements.  TRALA members have argued that they abide by all federal safety regulations and have their customers spec the trucks/equipment that most enhance their business model and thus have no additional responsibility to add more safety features to a vehicle.  Even if members were able to retrofit all the vehicles in their fleet (which is an impossibility), under this trial lawyer theory, they could simply change their demands at a future time to claim liability against a lessor if another piece of safety equipment could have been added.  NHTSA and FMCSA take safety seriously and thus test different pieces of safety equipment over many years to determine if they are useful, enhance safety, and do not cause any unforeseen problems.  To make lessors more liable than OEMs is to put leasing and rental companies at a specific disadvantage over other trucking companies and represents a threat to the entire industry.
 
TRALA has been working with its members and state trucking associations and allies to determine opportunities to strengthen the Graves Amendment at the state level by introducing legislation that would essentially codify vicarious liability to include optional equip language, thus making it impossible for the trial bar to sue a lessor solely for ownership and the decision to only equip a vehicle with federally mandated safety equipment but nothing beyond that.
 
 
Florida
 
TRALA and its allies were able to have legislation introduced that would make it impossible to sue due to the optional equip theory being trolled by the trial bar.  HB7055 was expanded by the Judiciary Chairman to encompass more than just leasing and rental companies with respect to optional equip language. TRALA testified at the Judiciary Committee hearing (using an attorney to represent the industry) on April 4, 2023.  HB 7055 passed out of the House Judiciary Committee on April 6, 2023 by a vote of 16-7.  It now moves to the full House and if passed, the Senate.
 
On April 19, 2023, HB 7055 was pulled by the Judiciary Committee Chairman and will not be considered during this session of the legislature.  The abandonment of the TRALA-supported bill had nothing to do with the substance of the language, but rather reflected the political realities currently in Tallahassee.  It had become clear that additional amendments that were being proposed would weaken HB7055 and time was simply running out.  In addition, the fights in the legislature that have made headlines (i.e. Disney) had come to dominate the House and Senate and therefore, TRALA will now have to reconvene in the fall of 2023 or January of 2024 to address this issue and attempt to have it passed and signed into law. 
 
Optional Equip legislation was officially introduced in the Florida Senate on December 6, 2023 by Senator Travis Hutson.  Senate bill 760 is tied to the Graves Law, protecting all rented or leased vehicles from trial lawyers' attempts to file lawsuits against TRALA members for not adding unmandated so-called "safety" equipment to vehicles.  TRALA anticipates hearings to take place in early 2024 where it plans to testify on the bill's merits. 
 
LATEST ACTION:  On January 25, 2024, TRALA was scheduled to testify on behalf of the optional equipment legislation being considered in the Florida legislature.  However, upon discussing with several lawmakers, the lobbyist on the ground felt it best to wait until specific questions could be addressed before a vote would take place, attempting to ensure passage by the key relevant committees of jurisdiction.  Opposition from a few key Republican members of the House have muddied the plan as of today.  It is unclear whether TRALA will travel to Tallahassee in the next few weeks to testify or not.
 
 
Arizona
 
On January 12, 2024, TRALA and the Arizona Trucking Association were able to convince lawmakers to introduce optional equipment legislation into the State House.
 
House Bill 2461 was introduced by Representative David Cook who is Chairman of the House Transportation Committee. The language was mostly mirrored after the legislation TRALA has worked on in Florida that would essentially codify the Graves Law.
 
TRALA plans to lobby the legislature in the coming weeks as to the merits and need of this legislation. You can view the test of HB 2461 by clicking here.
 
On February 7, 2024, HB 2461 received a hearing in the Arizona House Transportation & Infrastructure Committee.  The legislation was unanimously passed out of committee by a vote of 11-0.  TRALA remains actively engaged on this piece of legislation and will coordinate with the Arizona Trucking Association to lobby key lawmakers over the next few weeks to help ensure its passage later this year.
 
On February 20, 2024, the Arizona House of Representatives passed HB 2461 unanimously, by a vote of 57 – 0.  TRALA applauds the Arizona House for its strong showing of support for this legislation and continues to advocate for its advancement in the Arizona Senate where it received its First Reading on February 28, 2024, and Second Reading on February 29, 2024.
 
LATEST ACTION: On April 1, 2024, the Arizona Senate passed HB 2461 unanimously.  Following both chambers passage, the bill was transmitted to the governor on April 4, 2024.
 
On April 11, 2024, Governor Katie Hobbs (D-AZ), signed HB 2461 into law, joining Indiana earlier this year and Texas last year to adopt optional equipment legislation. TRALA will continue similar efforts across the country in key states in future years.
 

Indiana
 
During January of 2024, TRALA spoke with a handful of state legislators in the state of Indiana about the possible introduction of optional equipment legislation.  TRALA coordinated discussions with the Indiana Trucking Association and also wrote a letter to the governor’s office to urge action in 2024.  Initially, TRALA was told that given the governor was a lame duck, leaving office in November, and the fact that there was no obvious legislative vehicle for the language to move, it was unlikely that legislation would move in 2024.
 
During the week of February 26, TRALA was informed that the governor’s office had been quietly discussing the language with key legislators and had pushed to have the language added to a transportation-related bill, rather than one that originated in the judiciary committee.  TRALA was told that if this became a more public issue, it risked being stopped before it could progress in the legislature so TRALA agreed to simply give assistance when requested.
 
LATEST ACTION: State Representative Pressel had introduced HB 1162, which the governor’s office was able to include optional equipment language as an amendment.  As this bill made its way through the legislative process the past two weeks, TRALA sent key letters to State Senator Rodric Bray and State Senator Mike Crider to earn their much needed support and spoke with key State Senator Mark Messmer along with the Indiana Trucking Association. 
 
On March 8, 2024, HB 1162 was passed in both the Indiana State House (Roll Call 346: yeas 69, nays 29) and State Senate (Roll Call 328: yeas 26, nays 21).  The bill was sent to the governor who signed it into law on March 13.
 
Indiana marks the second state now to fully protect TRALA members from unscrupulous lawsuits based on the optional equipment theory.
 
 
Louisiana
 
TRALA spoke with the Louisiana Motor Truck Association (LMTA) regarding their efforts to enact tort reform in the 2024 session.  TRALA asked whether optional equipment language might be added to a tort reform bill or a stand-alone bill could be introduced by a legislator with business experience.
 
On March 8, 2024, TRALA met via Zoom with State Assemblyman Rodney Schamerhorn (R-LA) who has run a trucking company and understood the implications of the optional equipment theory being pushed by the trial bar. 
 
Representative Schamerhorn agreed to introduce legislation in this session in Louisiana. TRALA asked to have the language similar to what was introduced in Florida and Arizona with no weight threshold.  The timeline for introduction is likely around April 1, 2024.  TRALA will coordinate its efforts with LMTA and its members once the legislation is introduced.
 
On March 26, 2024, State Representative Rodney Schamerhorn (R-LA) introduced optional equipment legislation, House Bill 785.  TRALA ensured that the language was as similar as possible to legislation in both Florida and Arizona to protect all lessors.  
 
On April 8, 2024, the House Committee on Civil Law and Procedure held a hearing on the bill where TRALA’s President and CEO, Jake Jacoby, testified on the merits of the bill and answered questions from committee members. The bill was then immediately passed out of committee unanimously.  TRALA will continue to lobby the state legislature for its ultimate passage later this spring.
 
On May 14, 2024, the Committee on Judiciary held a hearing in which TRALA President and CEO, Jake Jacoby, testified and answered questions from committee members. The trial bar also testified and attempted to mislead the committee on a variety of issues, but their central focus was on emotions in an attempt to sway the committee. 
 
Ultimately, the committee agreed with TRALA and voted in favor of the bill, and it was sent to the full Senate.  TRALA expects a vote in the Senate over the next several days and TRALA and LMTA will lobby the Senate in favor of the bill to ensure it passes the chamber. 
 
LATEST ACTION: On May 20, 2024, members of the Louisiana Senate passed HB 785 on a party-line vote of 26-11. The bill was then signed by the Speaker of the House on May 21 and the President of the Senate on May 22.
 
On May 24, HB 785 was sent to the Governor’s office for executive approval. TRALA spoke directly with Governor Landry’s Chief of Staff regarding the merits of the legislation when TRALA learned the governor was considering vetoing the legislation. 
 
On June 7, 2024, Governor Landry signed HB 785 into law.  Louisiana now represents the fourth state to sign TRALA-supported optional equipment legislation into law.
 
 
California
 
California Air Resources Board (CARB) Zero Emissions
 
On April 29, 2015, the Governor of California, Jerry Brown (D) signed an Executive Order establishing a goal of reducing Greenhouse Gas (GHG) emissions in the state by 40% below 1990 levels by 2030.  Later that year, in October 2015, the state of California adopted Senate Bill 350, the Clean Energy and Pollution Reduction Act of 2015.  This law seeks to codify Governor Brown’s Executive Order by placing new requirements on state public utilities to reduce the state’s GHG production by 40% below 1990 levels by 2030.
 
Additionally, the law established 5 policy goals for public utilities to incorporate into their GHG reduction plans: Integrated Resource Planning, Energy Efficiency, Renewable Energy, Transportation Electrification, and Disadvantaged Communities.  The law also stated in its findings that it is the policy of the legislature to encourage greater adoption of electric vehicles including light-, medium-, and heavy-duty trucks in order to reduce GHG emissions and petroleum use.  The Zero Emission Vehicle (ZEV) program built on these initial goals through the 2016 Mobile Source Strategy which assumed 2.5% of all new sales of class 3-7 trucks would be ZEV, which would increase to 10% by 2025. 
 
As a result of the ZEV program, the California Air Resources Board (CARB) has been aggressive in introducing proposals that would target the trucking industry to reduce their emissions in order to achieve their goal of having ZE everywhere feasible by the year 2045. These proposals are specific to the state of California, and they include the Advanced Clean Truck (ACT) Rule, the Low NOx Heavy-Duty Omnibus Regulation, the Clean Fleet Rule, and the Inspection and Maintenance Program.
 
You may view more information on these proposals by clicking here. 
 
To View TRALA’s Activities with respect to CARB Zero Emissions from 2020-2023 please click here.
 
 
In addition to California, other states controlled with large Democratic majorities are starting to follow California's lead in setting electric vehicle sales benchmarks.
 
As sessions roll over, many bills from New York and New Jersey introduced last year are carried forward into the next year. Of these bills, New York Senate Bill 6298 and Senate Bill 7961 were rolled over in an attempt to reduce carbon emissions.
 
NY S6298 introduces the Advanced Clean Fleet rule from California, requiring that one year after enactment, all fleet operators must report on the number of zero-emission vehicles (ZEV) compared to non-zero emissions vehicles in the fleet, among additional information.
 
In addition to reporting, if enacted, S6298 would lay out the following benchmarks:

• Starting in 2028, fleets would be prohibited from buying or leasing drayage trucks unless they are a ZEV or near ZEV;
• Starting in 2036, fleets are banned from driving drayage trucks unless they are ZEV or near ZEV;
• Starting in 2041, fleets are banned from driving medium and heavy-duty trucks unless they are ZEV or near ZEV;
• The bill also sets standards for high-priority fleets as well.

 
The commissioner may exempt fleets if ZEV or near ZEV vehicles do not exist to carry out the fleet's needs. However, this is at the commissioner's discretion, and politics may likely come into play.
 
NY S7961 takes California's targets for selling zero-emissions medium and heavy-duty vehicles and would establish them for New York.
 
NJ 213 would require that 100% of all medium and heavy-duty vehicles sold or leased for registration in the state must be a zero-emission vehicle by December 31, 2045.
 
On January 19, 2023, TRALA discussed many bills that impact the rental and lease industry with Kendra Helms of the Trucking Association of New York and Jennifer Blazovic of the New Jersey Motor Truck Association. TRALA will continue to work with both trucking associations and its allies to monitor and lobby against all of these bills.
 
On Friday February 9, 2024, CARB sent out a notice regarding the Clean Truck Check (CTC) program, announcing that the deadline to report and pay compliance fees for the CTC had passed. All vehicles subject to the program will be considered noncompliant if they have not reported and paid the fees.
 
CARB also announced that it was working with the California Highway Patrol to enforce compliance with CTC. For more information, you can click here.
 
On February 21, 2024, CARB sent out a reminder that the California DMV has begun automatically issuing registration holds on vehicles that are not compliant with the Clean Truck Check requirements. To report your vehicle and avoid any potential registration holds, report your fleet here.
 
Additionally, on February 22, 2024, CARB sent out a notice reminding fleets that the Advanced Clean Fleet (ACF) Regulation requires all applicable vehicles to report company information, vehicle information, and compliance options using their online Truck Regulation Upload, Compliance and Reporting System (TRUCRS), which has been updated for ACF reporting.
 
On March 14, 2024, CARB announced that the Clean Truck Check (CTC) program’s periodic testing deadline has been delayed by several months.  Key points include:
 

• Periodic testing will now become effective October 1, 2024, as vehicles may submit passing emissions tests up to 90 days before the vehicle’s compliance deadline (i.e., the first periodic testing deadline has now been extended to January 1, 2025). 
• The announcement does NOT delay requirements to register and pay per vehicle fees of $30 for a California fleet in 2023 (no later than January 31, 2023).
• The rollout of California Department of Motor Vehicle registration holds for CTC non-compliance will likely ramp up immediately.
• Fleets must also still plan to pay fees for their 2024 California fleet, which will be due in the latter half of this year.

 
Lastly, CARB posted a fact sheet on its CTC website that goes into more detail on this recent update.
 
LATEST ACTION: On September 16, 2024, TRALA submitted formal comments to the Environmental Protection Agency (EPA) asking that the agency deny a waiver request by the California Air Resources Board CARB in their attempt to adopt the Advanced Clean Fleets regulation. 
 
In a letter dated November 15, 2023, CARB submitted its request to the EPA seeking a waiver and authorization under Section 209(b) and 209(e) of the Clean Air Act (CAA) after its adoption of the ACF regulation. The ACF requires affected state and local governmental fleets, drayage truck fleets, federal governmental agency fleets, and large commercial fleets by forcing them to incorporate zero-emitting on-road medium and heavy-duty vehicles and light-duty package delivery vehicles into their fleets, beginning in 2024.
 
On July 12, 2024, the EPA announced the opening of a public comment period for California's pending ACF waiver request through a Federal Register publication notice. This marked the beginning of the notice and comment period, not a waiver determination by the EPA. The agency held a virtual public hearing on August 14, 2024, to gather comments on the waiver, with written comments due by September 16, 2024.
 
TRALA coordinated with its members and sought feedback during the process of completing the formal comments to the EPA. TRALA’s comments focused on several key elements of concern over the ACF regulation, as well as pointing to key legal and technical factors that should convince the EPA that it must deny the waiver request by CARB. Some of the issues covered within the comments by TRALA include:
 

• The ACF is essentially mandating a single energy technology
• The ACF is technologically infeasible in the near term
• EPA should wait until current litigation concludes before deciding on the waiver request
• Including rental trucks will not achieve the desire emissions reductions
• The ACF is unconstitutional under the Commerce Clause
• EPA lacks the authority to act on the waiver under the Major Questions Doctrine
• The ACF violates the congressionally passed F4A Act

 
 To view TRALA's Comment Letter, please click here.
 
 
CARB’s TRU Regulation
 
In 2022, the California Air Resources Board (CARB) updated its Transport Refrigeration Unit (TRU) regulation, which requires a certain percentage of TRUs to be a zero-emission transportation refrigeration unit (ZETRU) starting in 2023, with 100% of all TRUs needing to be ZETRUs by 2029.
 
In December 2022, CARB requested that the U.S. Environmental Protection Agency (EPA) grant California a waiver under the Clean Air Act to implement the TRU rule.
 
In April 2024, the EPA published a notice of public comment period to allow the public to weigh in on the merits of granting California a waiver on the TRU rule.
 
LATEST ACTION: On June 19, 2024, TRALA's President and CEO, Jake Jacoby, submitted comments on behalf of the Association to the EPA that recommends that the EPA not grant California its waiver request.
 
To view TRALA's Comment Letter, please click here.
 
TRALA will continue to monitor more developments with the rule as it makes its way through regulatory process.
 
 
New York
 
New York City Idling
 
For the last several years, New York City has encouraged its citizens to file complaints against trucks that are idling illegally in the city through the Citizens Air Complaint Program. The program allows citizens to send in videos of trucks that are idling for more than three minutes. The city will then pay the citizen who reported the incident, a sum of 25% of the fine that can range from $350 to $2,000 for a repeat offense. The program is designed so that it is not only extremely easy to find violators, but also an easy process for filing complaints with the incentive of receiving money for very little effort.  Therefore, this program makes it almost impossible for truck drivers to complete necessary deliveries throughout the city without the risk of being reported for simply doing their jobs.
 
Of particular interest to TRALA, the program does not have a provision that allows for the transfer of liability for leasing companies so that the liable party is held responsible and bad behavior is discouraged. TRALA is working with the Trucking Association of New York (TANY) and the coalition to allow the option for leasing companies to transfer responsibility for the violation (with an opportunity to defend itself) to the individual or company responsible. Under NYC’s Department of Finance’s (DOF) system, lessors register with DOF as a lessor and file a copy of the blank form lease. DOF then sends a weekly list of parking tickets to which a lessor responds within 30 days with the name and address of lessee for each ticket. DOF then transfers liability to the lessee[EH1] .
 
You may view a summary of the issues and proposed solutions surrounding NYC’s idling program by clicking here.
 
On May 31, 2023, TRALA signed a coalition letter organized by the Trucking Association of New York (TANY) to oppose NYC’s idling program.  The letter will soon be sent to New York City officials and TRALA will share once that happens.
 
On June 14, 2023, the coalition spoke with NYC’s Department of Environmental Protection (DEP). The DEP relayed that several types of trucks are exempt from the idling law:
 

• Trucks that use the motor vehicle engine to run a truck’s lift gate when being used to ACTIVELY load and unload product are allowed to keep the engine running; 
• A vehicle operating a processing device is also exempt. That is a device that accomplishes the function for which the vehicle or equipment was designed, other than transporting goods or people, via a mechanical connection to the engine; including but not limited to operating a lift, crane, pump, drill, hoist, or mixer; or
• A system that controls the environment of temperature-sensitive cargo or substances, provided that such cargo or substances are being transported in a vehicle designed for the transportation of such materials.

 
The DEP stated that they will offer a sticker that they will place on any exempt vehicle. The sticker is free, numbered and non-transferable to reduce the number of unfounded complaints related to exempt trucks. TRALA believes that this new sticker program will not change the coalition’s asks, letter, or strategy, however, it does illustrate that our advocacy efforts on the issue have had an impact. The messages of industry are getting through.
 
On July 11, 2023, TRALA joined TANYin sending a letter to New York City Mayor Eric Adams regarding the trucking industry’s concerns with the Citizens Air Complaint Program. There were close to 200 businesses and organizations that signed on to the letter, which sends a strong and unified message as to the effect this program has had on NYC trucking companies.
 
You may view a copy of the letter by clicking here.
 
TRALA will support TANY as it works on a media and public relations campaign, which will include a video. Additionally, there will be a hearing later this summer or in the early fall regarding the program.
 
LATEST ACTION: On September 18, 2024, the New York City Council’s Committee on Environmental Protection, Resiliency, and Waterfronts held a public hearing on the merits of the Citizens Air Complaint Program. TRALA’s Director of Government Relations, Ryan Snyder, testified on the importance of receiving a timely summons and the need to include provisions to transfer liability to the party operating the vehicle to protect TRALA members.
 
You may view a copy of the testimony by clicking here.
 
TRALA will continue to work with TANY to fight this egregious program and work to carve out exemptions for the rental and leasing industry.
 
New York Rental Security Legislation
 
In January, NY S1502 was introduced in the New York State Senate.  The proposed bill would require rental companies to register with the state Division of Homeland Security and emergency services; maintain records of any person who rents a truck or trailer for a minimum of two years; require that anyone who rents a vehicle or trailer provide a valid driver’s license and another form of identification; and mandate that companies that rent vehicles check all potential renters against state or federal criminal databases for terrorism threats.
 
TRALA has opposed similar legislation in the past, pointing to federal rental security legislation passed in Congress with TRALA’s input.  In addition, TRALA vehemently opposes any state legislation that would create different standards for security operations for nationwide rental companies.
 
LATEST ACTION: On January 19, 2023, TRALA discussed many bills, including S1502, that impact the rental and lease industry with Kendra Helms of the Trucking Association of New York. TRALA will continue to work with TANY to defeat this legislation.
 
 
New York Congestion Pricing
 
New York City has been considering the idea of congestion pricing for years. The stated goal of the New York Metropolitan Transportation Authority Board (MTA) is to reduce city congestion, but the unstated goal is to raise significant monies in order to fund other priorities. MTA's plan is to charge vehicles that travel south of 60th street in Manhattan a fee based on time of day and other factors.
 
On March 27, 2024, the New York Metropolitan Transportation Authority Board (MTA) approved the Congestion Pricing Tolling proposals. The plan calls for charging trucks $24.00 or $36.00 (depending on size) each time the truck enters the zone, while passenger vehicles will only be charged once a day for $15.00. The Board does provide discounts for overnight travel, along with certain bridge and tunnel crossings.
 
TRALA is working with the Trucking Association of New York to help educate MTA on the impact congestion pricing has on the rental and leasing industry, as well as advocating against this policy.
 
LATEST ACTION: On June 5, 2024, New York Governor Kathy Hochul blocked the MTA’s long-awaited plan to toll drivers entering the busiest parts of Manhattan. The MTA board will likely file a lawsuit against the governor to attempt to revive the program. Depending on the November 2024 elections, there is a chance this ruling will be overturned. However, currently there is no clear guidance, and all congestion pricing is on hold.
 
TRALA will continue its work with TANY to monitor and advocate against congestion pricing.
 

New York’s Advanced Clean Trucks Regulations
 
New York, along with several other states, has begun the process of adopting the same regulations as California’s Air Resources Board (CARB) with respect to emissions and moving all fleets away from internal combustion engines.
 
New York as moved to adopt the Advanced Clean Trucks (ACT) regulations while TRALA and others in the trucking industry have begun to lobby against this move based on the lack of charging infrastructure, not enough vehicles being produced, and most importantly, that most customers/consumers simply are not ready to purchase ZEVs.
 
LATEST ACTION: On August 29, 2024, TRALA sent New York Governor, Kathy Hochul (D) a letter opposing the ACT regulation that is set to go into effect on January 1, 2025, in New York. The letter argued that, while TRALA does support the need to reduce emissions in New York, the ACT poses a threat to the entire trucking industry and asks the governor to delay enforcement of the program until the technology and infrastructure have caught up with the regulation.
 
To view TRALA’s letter to Governor Hochul, clicking here.
 
 
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