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MRF Questions and Answers Regarding Proposed EPA Emissions
Standards for Street Bikes
May 23, 2003
Everything custom shops are doing today is already illegal.
Not so. First, it's so sweeping a charge, it can't possibly
be true. Second, if it were true, such businesses would
make lucrative enforcement targets.
have maintained for two years that this is an assertion,
not a statement of fact. Yes, the anti-tampering language
has been in the Clean Air Act for decades. That's one
reason why we supported the Barcia Bill last year, because
a part of that legislation added flexibility to the
anti-tampering provision. (Among other things, the Barcia
Bill essentially suggested that a motorcycle meet the
emissions standard prescribed for that model year -
a performance-oriented standard - rather than prohibit
modifications which do not result in higher-than-prescribed
emissions - a device-oriented standard.)
we've lived under a rather liberal emissions standard
for decades, we've had very little on our bikes that
can be classed as emissions control devices per se.
is no question that some modifications will produce
high emissions that may exceed the level prescribed
for a particular model year. However, for the most common
of personalization efforts - a pipe change, for example
- the emissions change may be measurable, but it is
insignificant as long as the bike is not catalyzer-equipped/made
to achieve an emissions standard that is catalyst-forcing.
Mr. Tom Austin of Sierra Research testified in the EPA's
public hearing September 17, 2002, on behalf of the
Motorcycle Industry Council: "Because the Tier 2 standards
will require the widespread use of catalyst[s], much
of the theoretical benefit is going to be lost in customer
service due to the popularity of aftermarket exhaust
systems," and "motorcycles with catalyst systems are
likely to have higher emissions with the catalyst removed
than motorcycles designed to meet a slightly less stringent
standard without catalyst."
take a look at enforcement, too. When the rubber meets
the road, what do inspectors look for in terms of signs
of "tampering?" Here is an example of what inspectors
look for in Ohio, taken from that state's environmental
protection agency rules and regs:
emission system reference manual or the vehicle control
information (VECI) label located on each vehicle shall
be used to determine the vehicle emissions systems requiring
inspection. If a conflict exists, the VECI label shall
take precedence. The emission systems subject to inspection
may include, but not be limited to:
Catalytic converter system
(2) Evaporative emission system
(3) Fuel inlet restrictor
(4) Positive crankcase ventilation system
(5) Thermostatic air intake system
(6) Air injection reaction system
(7) Exhaust gas recirculation system
(8) Oxygen sensor
(9) Computer control system."
The Vaughn Study claims that 'California experienced
a 7.7% reduction in motorcycle registrations between
1996 and 2001 while motorcycling increased by 32.2%
in the other 49 states during the same period.' From
1998 to 2001, California motorcycle registrations increased.
Why the disparity?
No matter what years you pick, you see a problem when
you compare the California experience to motorcycling
activity in the rest of the USA. If you pick registration
data from the years 1998 to 2001, you can show an increase
in motorcycle registrations in California of 16.7 percent.
If you pick the larger number of years chosen by Dr.
Vaughn, you document a decline in motorcycling. (If
you pick the whole decade, the motorcycling decline
is even more dramatic than the years Dr. Vaughn selected!)
Even if you prefer to paint the brightest possible picture
in California by picking the years 1998 through 2001,
a comparison with the other 49 states during that same
period dims the picture considerably. From 1998 to 2001
in California, registrations increased 16.7 %, but:
in the other states, motorcycle registrations increased
by 27.3 %. The variance - 27.3 % as compared to 16.7
% - is substantial and significant. There is a problem
in California, and riders know it.
You claim that 'over-regulation' is the only plausible
explanation for the variance between California and
other states. How do you justify that statement?
In a word, economics, and Dr. Vaughn is prepared to
testify before Congress to this effect. Let him testify.
First, climate has remained favorable to motorcycling
throughout vast portions of California. Second, neither
congestion nor gas prices have eased which should make
the grid-lock-busting, gas-miserly motorcycle more attractive,
not less. Third, population growth has increased in
the state, as has per capita income. Fourth, since California
was still booming in 1999 and into parts of 2000 (before
the bursting of the dot-com bubble), one can reasonably
expect that motorcycle registrations in that state would
have increased at the same rate, if not a faster rate,
than the national experience. Instead, when compared
to all other states, motorcycling declined in California
- or lagged substantially and significantly, depending
on the years you choose to compare. Fifth, it is axiomatic
that sales tend to suffer when consumers perceive that
discretionary dollars are better spent elsewhere; that
is, when tighter regulation adversely influences price
and product desirability, sales will be negatively impacted.
Again, Dr. Vaughn is happy to testify to these points,
and we hope Congress affords him the opportunity to
Why should we honor your claim that independent shops
and the aftermarket should be treated as motorcycle
makers for the purposes of 'regulatory flexibility'?
Doesn't that view strain credibility and won't it invite
The Small Business Regulatory Enforcement Fairness Act
of 1996 (SBREFA) was enacted to safeguard small business
from needless over-regulation. Since the debate over
tougher street bike emissions standards began over two
years ago, MRF has been clear and consistent that the
vast cottage industry of independent shops and the aftermarket
must be treated as small business entities directly
impact by this proposed rulemaking. This is analogous
to the Bureau of Alcohol, Tobacco and Firearms remaining
flexible regarding custom gunsmiths (who make as well
as repair firearms) should an ATF rulemaking tend to
favor major manufacturers to the detriment of small
businesses. With respect to EPA, small motorcycle firms
deserve standing and should be fully engaged in the
interprets the SBREFA law as meaning that only manufacturers
of a complete machine should be accommodated under the
umbrella expressly fashioned by the Congress to protect
directly impacted businesses. We do not agree. From
the small business person's point of view, the agency's
interpretation is terrifying. From an economist's point
of view, its interpretation is absurd. Why should firms
that make 100% of a motorcycle achieve standing and
enjoy some flexibility in rules that impact their future,
while firms that make 30%, 50%, 80% or more of a motorcycle
receive no standing and no protection from inflexibility
in rulemaking? More to the point, how is it that an
independent shop that makes a motorcyle not be considered
a maker? To argue otherwise is tantamount to arguing
that small businesses must be big enough to be what
economists term "vertically integrated" in order to
qualify for the modest protection offered by SBREFA.
It is not our view but this view that that strains credibility
and, we hope, invites considerable scrutiny. Motorcyclists
nationwide rely on very small as well as very large
businesses. All are deserving of protection in this
perusal of HOT BIKE magazine or a catalog from aftermarket
giant J&P reveals that the nexus of independent shops
and the aftermarket constitutes the smallest of the
small volume motorcycle makers. We argue that small
business flexibility protections should be extended
to this most fragile element of the motorcycle industry.
And unlike the automotive industry, there is a progression
in this segment of the industry that we should all understand
- and that regulators should honor - a progression from
pipe dream to place of business.
a fellow named Eddie who found himself out of work in
Florida a decade ago. In 1993, Eddie fixed his house,
repaired his boat and, out of mere interest as a hobbyist,
built a custom motorcycle from the ground-up. He built
a few and displayed his rolling art at his tavern, and
they attracted more than a little interest. People came
up to Eddie and said, "Make me one." He invested, hired
friends and eventually hung out a shingle at a facility
he obtained. Eddie's bikes attracted even more interest,
got some coverage in the popular magazines, and he was
on his way. Today, Eddie employs 18 workers and turns
out custom machines that go for $39,000 and up. It is
absolutely defensible - indeed, it is an ethical imperative
- to argue that Eddie's business is a motorcycle-making
business. His firm - Eddie Trotta's Thunder Cycles of
Florida - is deserving of protection. And this is key:
his firm deserves protection even at the earliest stages
of its development. If Mr. Trotta pays for a business
license or files taxes as a business, his enterprise
is a business. If he is making a motorcycle, he is a
motorcycle maker. From those humble beginnings ten years
ago, Eddie Trotta's Thunder Cycles is now a thriving,
5 million-dollar-a-year small business, and 18 families
rely on its survival.
are truly the smallest of America's small-volume motorcycle
You claim that the future of 10,000 businesses hang
in the balance. Why haven't they come to Washington?
They have, and if MRF had the money to take out full-page
ads in the popular motorcycle magazines or mount a massive
direct-mail campaign, more would come.
fact, independent shop owners have been present in the
ranks of visiting SMRO teams from various states. Many
others have written their Congressmen to voice their
concern. Many have supported the Vaughn Study, including
a three-person shop in Iowa whose $350,000-a-year business
was featured by ABATE of IOWA in presentations to their
Members of Congress in April, 2003. Among the firms
that cause us worry are truly small firms - often two
and three-person operations - at a stage of their development
that perhaps mirrors where Eddie Trotta found himself
in the mid-1990s. These businesses can hardly afford
trips to Washington, much less full-time lobbyists and
regulatory affairs specialists here to pour through
the Federal Register on their behalf, especially when
these businesses believe that rider advocacy groups
know full well their plight and are working hard in
their defense, not as the direct advocates of business
but as advocates of riders who rely on those businesses.
Should Congress grant us - and them - a hearing on this
issue, these small businesses will step forward, speak
and be heard.
Okay, so one Small Entity Representative (or SER) shows
up for a SBREFA pre-panel briefing and testifies that
he would exit the business if Tier II's catalyst-forcing
standard is imposed on him. If that businessman testified
that he COULD meet the standard, would your argument
then be to adopt that standard for all small-volume
Our argument would not necessarily be to follow whatever
a single SER happened to say at a SBREFA pre-panel briefing,
but rather to call the entire SBREFA process into question
- which is precisely what we are doing. The entire thrust
of our argument regarding the SBREFA process is that
it was not honored, that impacted businesses were not
given standing, and that just one SER - culled only
from those makers recognized by EPA as directly impacted
entities - could not possibly be representative of all
directly impacted entities. That said, the one SER who
did participate made the unequivocal statement that
imposition of Tier II would compel him to end his business.
question is not whether this lone SER speaks for all
impacted businesses - he does not - or whether his statement
is the sole driver behind our desire for a non-catalyst-forcing
emissions standard - it most assuredly is not.
question is, did EPA tag the SBREFA base before it began
its final sprint to home plate, a sprint being run now?
We don't think so. The Vaughn Study calls into question
the way EPA played the game. We are asking Congress
- chiefly but not exclusively the House Small Business
Committee - to make the call as umpire. We are asking
individual Congressmen to hold field hearings - so they
can make the call as umpire. It is a fair, legitimate
request. What's wrong with asking the umpire to make
the call? Nothing.
Your claims about a safety problem with catalytic converters
on motorcycles really needs to be documented!
You know what? You are absolutely right. And that is
why the Motorcycle Riders Foundation has requested a
complete, independent and comprehensive study into that
very question before the new rule is finalized. And
we've requested such a study repeatedly. For more than
run the list, shall we? MRF brought up the safety question
in our first comment soon after EPA published its Advanced
Notice of Proposed Rulemaking in late 2000.
raised the safety question at a meeting at the White
House Conference Center in October, 2001, with a representative
of EPA's Office of General Counsel present.
touched on the issue at the September 17, 2002, public
hearing in Ann Arbor.
requested a study in both our appeal for a public comment
deadline extension September, 19, 2002, and again in
our comments on the proposed rulemaking filed January
agency's attorney did not say one single word in our
October, 2001, meeting.
agency has yet to provide a single written word to us
in response to these many written requests, other than
a statement in its proposed rulemaking that the safety
problems are "not insurmountable" (a tacit acknowledgement
that some problems had to be surmounted).
How many shops and other related small businesses are
The truth is, no one knows for certain. Based on input
from a number of sources, including observations by
John Paliwoda of the California Motorcycle Dealers Association
and inquiries made by SMROs, we estimate there are at
least 10,000 impacted small businesses in the United
States. Remember that John Paliwoda of the California
Motorcycle Dealers Association testified at the September,
2002, EPA public hearing that his constituency - franchised
and non-franchised dealers among them - will be directly
impacted. So the number of businesses goes beyond "independent
shops" or "custom shops." As ABATE of OHIO indicated
in its talks with its Congressional delegation, some
entity other than the independent shop may shape the
billet, another chrome it, still another manufacture
an O-ring, another must ship the part, etc. We believe
the number of related businesses (e.g., non-franchised
dealers, aftermarket businesses, shops, derivative suppliers,
etc.) creates an impacted segment of industry that numbers
well above 10,000 entities.
fact is, because so many small motorcycle businesses
are in various stages of development (as discussed above
regarding Eddie Trotta Thunder Cycles), it would take
additional study well beyond the scope of Vaughn - and
additional time - to arrive at a more precise estimate.
In our talks with Congress over the last two months
and more, we have used the expression "in excess of
10,000 small businesses." In one recent case, ABATE
of IOWA presented page after page of impacted businesses,
by name, for that state. Everyone is doing his or her
part to describe, to the best of our ability, the number
and nature of impacted businesses.
even if we counted all the businesses with laser-precision,
the outstanding question is this: regardless of their
number, should EPA count them as directly impacted small
business entities? We think they should.
You have no data from manufacturers to suggest what
percentage of their future models will be equipped with
catalytic converters. Why do you predict 'widepread'
use of catalyzers?
No, we know of no motorcycle manufacturer data to describe
the percentage of catalyzers in their future fleet.
In his study, however, Dr. Vaughn chose to cite a reputable
source (Mr. Tom Austin of Sierra Research who delivered
the Motorcycle Industry Council testimony at EPA's September
2002 public hearing). Representing the motorcycle industry,
Mr. Austin expressed "concern" because "the Tier 2 standards
will require the widespread use of catalyst[s]..." "Widespread"
may not mean 100%, but it certainly denotes extensive,
prevalent and common.
You keep emphasizing the benefits of motorcycles as
transport, because they conserve fuel, ease traffic
congestion and reduce road wear. Aren't motorcycles
in the main recreational or supplemental forms of transport?
The motorcycle predates the automobile and is a bonafide,
legitimate form of transportation codified as such in
federal and state law. Motorcycles conserve fuel, ease
traffic congestion and reduce road wear. We believe
Congress and the Administration should help increase
motorcycling in America, so that America can reap the
benefits of this bonafide, legitimate form of transportation.
FINALLY: You can't win on the EPA issue.
The Motorcycle Riders Foundation is duty bound to advocate
for the street motorcycle rider, represent our members
faithfully and fight for what we believe is right. We
believe it is right to fight for a reasonable emissions
standard that improves pollution control while preserving
small business, rider options and increasing motorcycling
in America to reap the benefits of fuel conservation,
road wear reduction and congestion easing.