Rose meets with White House on Fitzgerald

By Michelle Price
UCBJ Managing Editor

WASHINGTON – Rep. John Rose (TN-6) met with President Donald Trump’s senior political affairs advisors at the White House on Thursday to discuss ongoing issues relating to Fitzgerald Truck Parts & Sales and their debate with EPA over glider kits.

Rose provided Trump’s advisors with background information regarding the sudden changes in the way that EPA treats glider kits as reflected in the new regulation issued during the last day of the Obama Administration. 

The new EPA regulation limited the production of glider kit trucks by a manufacturer to 300 per year, down from the 5,000 per year that Fitzgerald had been producing. This limitation resulted in a loss of hundreds of jobs and the closure of Fitzgerald’s Jamestown facility. 

“In the waning hours of the Obama Administration, they issued a rule that for the first time in history declared that glider trucks were new trucks,” Rose explained. “They had never been considered new trucks. They are not elsewhere defined by the government as new trucks. Interestingly, the tax regulations do not define them as new trucks, but nonetheless, this EPA rule declared them to be new trucks, and then that was the basis for limiting the production of them.”

The new EPA regulation limited the production of glider kit trucks by a manufacturer to 300 per year, down from the 5,000 per year that Fitzgerald had been producing. This limitation resulted in a loss of hundreds of jobs and the closure of Fitzgerald’s Jamestown facility. 

“They did not do any economic impact analysis or regulatory impact analysis on that new rule in the Obama administration, and so then when the Trump administration came into office, they looked at that and decided there was not a basis in the statutes for issuing that rule,” said Rose. “So, they developed a new rule that essentially reversed it and said these are not new trucks. They have never been considered new trucks going all the way back to the 1950s when gliders first came on to the market. So, this has been going on a long time; it’s not like it’s a new thing.”

Rose is asking the White House to request EPA to go ahead and initiate the new rule; thereby, starting the public comment period and allowing anyone with issues to lodge their comments formally.

“There have been a number of explanations for why it hasn’t already been issued but all of the objections, we believe, have been answered,” said Rose. “We believe the new rule should be issued and if it’s challenged, so be it, but there’s a process for that. It’s time for that process to continue. What we are confident of is that the current rule, the Obama rule, is not legal under current statute.”

There are reports that EPA plans to issue the new rule sometime in early 2020. With comment periods, this could allow the new rule to go into effect in late 2020 or 2021. 

“Our plea to the White House – and some people may be asking why would you make a plea at the White House – is that time is of the essence. These jobs in the Upper Cumberland are being lost,” said Rose. “It’s impacting the economy of the counties that are impacted. Obviously, Pickett County will be dramatically impacted, Fentress County has already been impacted, and Southern Kentucky is impacted; so, as Fitzgerald has to curtail its operations this affects not only the Fitzgerald business but their employees and the families of the folks who have lost their jobs and who have no certainty of the future and when they might be able to go back to work.”

Fitzgerald is also battling with the IRS and their question of $83 million in taxes the government now says is owed. Rose said they have looked at the issue, and it is currently in active litigation.

“So, for the fifth time in recent years – the fifth time – the IRS has asserted that Fitzgerald should be collecting excise taxes on the trucks as though they are new, despite a regulation at the IRS that says they are not new, so it’s kind of remarkable,” said Rose. “Four previous times Fitzgerald has contested that and won and here we are a fifth time, so you know you kind of get the question of how many times do you have to win before it’s a win. We feel confident – We wish the IRS would intervene and tell its auditors that they should leave this issue alone that it’s been decided and settled, but we feel fairly confident that Fitzgerald will win in court. Now, it’s unfortunate that they are having to fight it in court, but they are, and its again one of those situations that we feel is fairly clear.”

Michelle Price is the managing editor of the Upper Cumberland Business Journal and can be reached via email. Send an email.

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