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Congressional Budget Office Analyzes “AM Radio for Every Vehicle Act”

CBO says the mandate would cost automakers "several millions of dollars each year the requirement is in effect”

The Congressional Budget Office (CBO) has released its cost analysis of a bill that, if passed, would require AM broadcast stations to be accessible in all passenger motor vehicles sold in the United States.

The AM Radio for Every Vehicle Act of 2023 (S. 1669) was advanced by a Senate committee this summer after several car manufacturers disclosed they were dropping AM capability in their new electric cars and some gas powered vehicles, too.   

The Senate bill requires car makers to maintain AM broadcast radio without a separate or additional payment, fee or surcharge. The bill has yet to go before the full Senate for consideration. The House version of the bill also remains pending in committee for now, according to the National Association of Broadcasters. 

The CBO conducts objective, impartial analysis of budgetary and economic issues to support the Congressional budget process, according to its website. 

The office says the proposal, if adopted, would primarily affect manufacturers of electric vehicles, even though the bill would also prohibit future phase-outs in gasoline and diesel passenger vehicles.

Using sales data, the budget office estimates the bill would require auto manufacturers to update media equipment and infotainment software in about 2.5 to 3 million EVs per year. 

The CBO, which is nonpartisan, states: “Because the unit costs of those updates are small, CBO estimates the total cost of the mandate [for automakers] would be several millions of dollars each year the requirement is in effect.” That’s well below the annual maximum threshold of $198 million established by the U.S. government when adopting private-sector mandates.

[Related: “Bipartisan Support for AM Radio Legislation Grows“]

If passed into law, the proposed AM Radio for Every Vehicle Act would require the U.S. Department of Transportation (DOT) to issue a rule mandating AM inclusion in new vehicles within one year of adoption. The Senate bill would also require the Government Accountability Office (GAO) to study the role AM broadcasts in passenger vehicles play in disseminating emergency alerts through the Integrated Public Alert and Warning System.

The office also estimates the government price tag for enshrining AM radio in the dashboard of future cars. It says it would cost DOT and the GAO a total of $1 million over the 2024-2028 period. Any spending would be subject to the availability of appropriated funds, the government agency says.

And even some of those costs could be recouped, the CBO states, since the Senate bill would authorize DOT to assess civil penalties on manufacturers that fail to comply with the new rule. The CBO estimates that any additional revenues collected would total less than $500,000 over the 2024-2033 period because the number of violations would probably be small.

The CBO concludes the bill also would preempt state and local laws by prohibiting those entities from enforcing any laws or regulations pertaining to the access of AM radio in passenger vehicles.

[Read more stories about the future of AM radio in cars]