Self-Driving Vehicles

Self-Driving Vehicle Legislation Must Preserve a State’s Right to License and Regulate Vehicle Commerce (H.R. 3388/S. 1885)

Issue

Congress aims to finalize legislation to advance self-driving vehicles (H.R. 3388/S. 1885) by preempting certain state laws to avoid automakers having to build different self-driving vehicles for different states. Historically, the federal government has preempted only state laws that impact vehicle design, construction and safety. Congress must ensure self-driving vehicle legislation retains a
state’s traditional role to provide consumer protections, and license and regulate vehicle commerce within its borders.

Background

The Senate Commerce, Science, and Transportation Committee approved S. 1885 last year. While the bill clarifies that state laws regarding the sale, distribution, repair or service of self-driving vehicles are not preempted, the bill lacks a technical amendment to ensure that state vehicle licensing/franchise laws protecting the rights of dealers and consumers are not nullified. NADA expects this
technical issue will be corrected before full Senate consideration to ensure these state vehicle laws are fully protected. The House passed bill, H.R. 3388, includes bipartisan language to clarify that state vehicle licensing/franchise laws as applied to self-driving vehicles are not preempted.

Ensuring the correct federal/state relationship is critical, as states have traditionally had the right to license and regulate the distribution, sale and service of vehicles in their state, based on the states’ desire to protect consumers and businesses that provide price competition, local jobs, and significant local and state tax revenue. These rights are reserved to states under the 10th Amendment to the Constitution.

For decades, state vehicle franchise laws have included important consumer protections and regulated the disparity in size and power between local dealers and multinational automakers to help level the economic playing field. Such protections for state residents are especially important, as there are new risks, as well as opportunities, associated with self-driving technologies, and new entrants rapidly entering the auto market.

Traditionally, the federal government has preempted only state laws that impact vehicle design, construction and safety to ensure uniform rules across all 50 states. Auto dealers support this defined and well-established federal role regarding self-driving vehicles.

Key Points

  • Congress should enact a balanced federal preemption (as in H.R. 3388/S. 1885) that enables states to continue to exercise their right to license and regulate the distribution of vehicles.
  • H.R. 3388/S. 1885 properly clarify that state laws regarding the sale, distribution, repair or service of AVs are not preempted to preserve state vehicle franchise laws protecting the rights of dealers and consumers. 
  • S. 1885 should include a technical “conforming” amendment before Senate consideration to fully ensure that state vehicle licensing and franchise laws are not preempted.

Status

The House passed H.R. 3388 in September 2017. Senate sponsors of S. 1885 are seeking agreement to attach the committee-passed bill to a must-pass measure on the Senate floor. Congress must ensure that final self-driving vehicle legislation fully and explicitly preserves state vehicle licensing/franchise laws.  

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September 14, 2018