Death Tax Repeal
Repealing the federal estate/death tax has been at the forefront of AIADA's legislative agenda this session. This tax has a devastating impact on family-owned businesses, including automobile dealers. Upon the death of the dealer principal, surviving heirs must pay death taxes of up to 60 percent of the estate's total value-in cash-to the federal government. AIADA has worked as part of the Family Business Estate Tax coalition to secure passage of death tax repeal legislation. In addition, dealers attending AIADA's Automotive Congress in May lobbied their congressional members on this issue, and on May 23, AIADA Chairman Barbara Vidmar spoke out in support of the repeal at a Death Tax Summit press conference held on Capitol Hill.

In early June, the association's efforts paid off as the House of Representatives voted by an overwhelming bipartisan majority (279-136) to pass a stand-alone death tax repeal bill-H.R. 8. After this vote, AIADA and other death tax opponents zeroed in on the Senate, which subsequently passed the bill with a vote of 59-39.

While President Clinton consistently indicated his opposition to the death tax repeal, AIADA did not let up the pressure. In a letter sent to auto retailers, Vidmar asked dealers to contact the president and encourage him to sign the death tax repeal into law. The president, however, vetoed H.R. 8, and it seems unlikely that Congress can garner the votes necessary to override the veto.

Although the president's veto was a major setback to AIADA's repeal efforts, there may be some opportunity for an end-of-session tax bill. But with presidential campaigns in full swing and little time left, the outlook for repealing the death tax this session appears unlikely. AIADA, however, will not stop working on this issue until the estate tax is repealed. "We didn't quit on the luxury tax, and we're not quitting on the death tax," says Walter Huizenga, AIADA president.

CAFE Standards
For the past several years, the House Department of Transportation (DOT) Appropriations bill has included a provision that would freeze CAFE standards at their current levels. Several representatives indicated their intention to strip the provision from this year's DOT bill and allow the administration to raise CAFE standards. Raising CAFE standards-especially in the popular light-truck segment, which includes minivans, sport-utility vehicles and pickups-would put the auto industry at odds with consumers who demand these vehicles. Dealers attending AIADA's Automotive Congress asked their congressional members to preserve consumer choice in the marketplace and retain the CAFE freeze in the DOT bill. When the House bill came to the floor, pro-CAFE representatives dropped their opposition to the freeze and did not offer an amendment to strike the provision. The House bill passed with ease, shifting the CAFE battle to the Senate.

The Senate DOT bill did not contain the CAFE freeze, and when the bill came to the floor, Sens. Slade Gorton (R-Wash.), Dianne Feinstein, (D-Calif.) and Dick Bryan (D-Nev.) offered a resolution to block the House-backed CAFE freeze and impose higher CAFE standards. To prevent passage of this resolution, AIADA contacted all senators and urged them to oppose it. AIADA also activated its grassroots dealer network to help lobby on the issue. After extensive debate, a compromise was reached prior to the vote. As part of the Senate compromise, the CAFE freeze remains intact for fiscal year 2001. Since this most recent CAFE battle, Ford and General Motors have announced plans to increase the fuel efficiency of their light trucks.

International Trade
The dominant trade issue this year has been granting China permanent normal trade relations (PNTR). The China PNTR vote was characterized as a battle between those political forces calling for isolationism vs. those who believe free trade has been key to U.S. economic prosperity. Groups opposed to international trade (labor unions, environmentalists and human rights organizations) have stopped at nothing to deny China PNTR.

Given AIADA's history of battling on behalf of international trade, the administration, the House Republican leadership and the business community asked AIADA for its help on this issue. The timing of the vote could not have been better since the House scheduled it for the week following AIADA's Automotive Congress. Prior to the vote, dealers explained the benefits of expanded international trade to Congress and asked its members to grant China PNTR. On May 24, the House voted 237-197 to pass H.R. 4444. The Senate is expected to pass this bill by the end of the session.

U.S.-Japan Auto Trade. The U.S.-Japan Auto Agreement struck in 1995 expires at the end of this year. This agreement averted the imposition of 100 percent tariffs on certain Japanese vehicles. American and Japanese negotiators are expected to meet several times this year to assess the impact of the agreement, compliance with the agreement and the future of U.S.-Japan auto relations. AIADA is working with the U.S. government and industry to ensure that auto dealers are viewed as part of the solution and not as part of the problem.

U.S.-Korea Auto Trade. Trade tensions with Korea are being fanned by U.S. and European automakers engaged in a joint strategy designed to pressure Korea to open its domestic auto market to imported vehicles. In 1999, Korea exported 1.5 million vehicles, while it imported only 2,400 vehicles. In addition to this trade disparity, the U.S. auto trade deficit continues to skyrocket. These are issues that have the potential to become even more volatile in an election year or if the U.S. economy experiences a downturn.

- Cody Lusk (luskc@aiada.org) is AIADA's director of legislative affairs.