In a major victory in the fight against the Gas Guzzler Tax, the U.S. Senate agreed to a National Limousine Association (NLA) sponsored amendment to the tax bill totally exempting limousine manufacturers from the Gas Guzzler Tax. This sets the stage for the final battle in the House-Senate Tax Conference which will produce the new tax bill. Under the proposed House version, the Gas Guzzler Tax would apply to a vehicle whose “unloaded” weight is 6,000 pounds or less rather than “loaded” weight under the present law. The average coachbuilder would be retroactively liable back to 1980 for approximately $500,000 per year. Moreover, in 1987 and thereafter, each limousine sold would cost the coachbuilder, and ultimately the operator, an additional $500 to $3,850 depending on gas mileage.
NLA General Counsel Jeffrey L. Berger of Finley, Kumble, Wagner, spearhaded the lobbying effort against the Gas Guzzler Tax
The NLA amendment was offered in the Senate by Senator Dan Evans of Washington State, after extensive lobbying by the NLA. According to NLA General Counsel Jeffrey L. Berger of Finley, Kumble, Wagner, who spearheaded the lobbying effort with Executive Director Cindy Littlefield, various other senators and NLA members were helpful in the passage of the amendment.
They include Senator Danforth of Missouri, contacted by Gary Dabney of DaBryan Coachbuilders; Senator Gramm of Texas, contacted by Ainslie Dencker of Allen Coachworks; Senator Long of Louisiana, contacted by Alan Fisher of London Livery Ltd.; Senator Wilson of California, contacted by Jules Kaplan of Marquis Custom Coach, and Senator Pryor of Arkansas, contacted by Danny Aldridge of Armbruster/Stageway.
The NLA amendment, written by Berger, was adopted verbatim and was one of the few amendments to the tax bill passed by the Senate. The Senate version would make the Gas Guzzler Tax inapplicable to any company that produces fewer than 10,000 cars per year and is a “manufacturer solely by reason of lengthening an existing automobile.”
An NLA fact sheet on the limousine industry served as the basis for Senator Evans’ support of the amendment. The Senator’s insightful comments in the Congressional Record of June 19, 1986 reflect the effectiveness of the NLA’s lobbying effort:
“Under current law, a number of small businesses engaged in converting standard luxury cars into stretch limousines have been determined to be ‘manufacturers “ As a result, these converters have been subject to the possibility of double taxation: once on the original production automobile, and again on the final product. Yet, these converters do not have the capability of affecting gas mileage because they do not modify the engine, drivetrain or other related mechanical parts. They merely lengthen a car on which any gas guzzler tax which would apply should have been paid. The modification made by the amendment would relieve these mostly small businesses from potential tax liability...It ensures that a limousine manufacturer does not get taxed twice by exempting those manufacturers of stretch limousines from the provisions of this amendment.”
Commenting on the Gas Guzzler
Tax as it applies to automobile manufacturers; Senator Evans humorously explained why Congress considers it necessary to change the law to cover vehicles whose “unloaded” as opposed to a “loaded” weight is less than 6,000 pounds:
“In the past, automobiles of 6,000 pounds and over [loaded] were not considered to be automobiles [under the Gas Guzzler Tax] and were thus exempt from some of the requirements for fuel efficiency. A few automobile manufacturers found it to their advantage to escape the law on automobiles that were heavy, but not quite 6,000 pounds by merely loading the car with “Refrigerator” Perry, and a few of his colleagues and a few packs of cement in the back to make the car over 6,000 pounds. But by doing that, they escape any penalty by missing gas mileage requirements. This amendment would correct it.”
In the absence of the Senate’s exemption, coachbuilders would also be covered by the change to “unloaded” vehicle weight of 6,000 pounds or less.
The NLA has obtained extraordinary results so far, especially since it is lobbying with a limited budget along with General Motors, Chrysler, and Rolls Royce, who are spending hundreds of thousands of dollars on the gas guzzler issue. The NLA must now convince the Joint House-Senate Tax Conference, which writes the final bill, to adopt the Senate version of the Gas Guzzler Tax.
Many coachbuilders and operators are involved in the all-important House-Senate Conference lobbying effort. Those who aided in the Senate area and are again lobbying in the House include Richard Ramis of Illinois Limousine Service; Larry LeCompte of LeCompte Limousine Service; David Isermann of Royal Limousine Service; Peter Halaka of Halaka World Class Limousine; Peter Cirlin of Dillinger/Gaines, and Ralph Hotton of Premier Engineering.
The industry has been well served by these individuals and the other members of the Coachbuilders Task Force including Tom McPherson of Eureka Coach, Richard Stelmach of Tri-State Custom Coach, Marsha Tortora of Empire Coach, and Jay Meyers of American Custom Coach.
This joint effort of coachbuilders and operators is a major milestone in our industry which has matured, through the NLA, into a national political force.
Self-Insurance Bill Passes Senate
Since the last National Limousine Association update, Congress has taken further action on risk-retention legislation. Senator Bob Kasten’s bill, S 2129, passed the Senate on July 17, 1986. S 2129 makes it easier for groups and associations to form self- insurance programs. The bill now goes to the Conference Committee.
In the House, Congressman Ron Wyden introduced “The Liability Risk Retention Act of 1986.” The new bill, HR 5225, incorporates a compromise between business proponents and insurance commissioners. It retains what the NLA feels is the most important aspect of his previous bill, HR 4301, namely that it allows self-insurance groups to meet the capitalization requirements of only one state rather than 50 states. HR 5225 has several cosponsors and was assigned to the Committee on Energy and Commerce. If HR 5225 passes, it will proceed to the Conference Committee which will combine each House of Congress’ versions (S2129 and HR 5225) into one final bill.
The NLA encourages all limousines owners and operators concerned about the high cost of insurance to write to their Congressmen in support of Congressman Wydnen’s bill (HR 5225). The NLA office has sample letters to use as a guideline in writing to your Representative. If you would like a sample letter, write or call the NLA office.