APRIL 6, 2010

IN THIS ISSUE

DEALER NEWS & INFORMATION

– Automotive News at a Glance

REGULATORY & LEGAL UPDATES

– Independent Contractors: Be Careful of Employee Misclassification

LEGISLATIVE UPDATE

– All Pinnacol Bills, Except for the Big One, Pass Out of Senate Judiciary

– Wellness Bill Heard by Senate Business, Labor and Technology Committee

– Summary of HB 1049 - CADA's Franchise Bill

UPCOMING SEMINARS

– Tell Us What You Need!

CALENDAR OF EVENTS
– Upcoming Events

– CADA 2010 Annual Golf Tournament

DEALER MILESTONES,
HIGHLIGHTS & TRANSITIONS

–Jerry Roth Passes Away

–Share Your Accomplishments

THE AFTERFACT

–All the News That's Fit to Email!

ARCHIVES

CLICK HERE for Open Road
e-newsletter archives.

CLICK HERE for an Index of Regulatory
& Legal Articles from the Open
Road e-newsletter.

CLICK HERE for Bulletin archives.

CLICK HERE for Colorado Auto
Outlook archives.

CLICK HERE for Denver Auto
Outlook archives.

ONLINE REGISTRATION

CLICK HERE to register online
for various CADA seminars & events.

MEMBERSHIP RESOURCES

CLICK HERE for details on the
Speaker and Educational
Resources.

CLICK HERE for a list of current
Endorsed Vendors/Programs.

CLICK HERE for a list of current
Allied Members.

CLICK HERE for an order form for
CADA forms.

CLICK HERE for information on all member services.

www.nada.org

CLICK HERE for NADA
Regulatory Affairs information.

STATE GOVERNMENT RESOURCES

CLICK HERE for the Auto Industry
Division of the Colorado Dept.
of Revenue.

CLICK HERE for the Title and
Registration section of the
Colorado Dept. of Revenue,
Motor Vehicles Division.

CLICK HERE for the Colorado
Department of Labor &
Employment website.

Visit us at www.coloradodealers.org.

CADA Hours of Operation
Monday to Thursday, 7 a.m. to 5 p.m.
Friday, 7 a.m. to 4 p.m.

CADA STAFF

CLICK HERE for a CADA staff listing

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or suggestions regarding this
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contact Lauren Stadler at
lauren.stadler@coloradodealers.org

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ENDORSED VENDOR/PROGRAMS

CLICK HERE for information about the
Endorsed Vendors/Programs.

If you have trouble viewing any of the links or documents in this e-newsletter, please CLICK HERE to access the web-based version.

2010 Denver Auto Show
Re-cap

Success Results-
By the Numbers!

By many measurements, the 2010 DenverAuto Show demonstrated definitive success. Some previous records were challenged, others fell.

Primary goals of Denver Auto Show:

·         Increase consumer interest and knowledge in new cars
·         Generate sales
·         Build value for exhibitors and manufacturers  

Green Tie Preview Party – Attendance up 60 percent

Opening night paid attendance – New all-time opening night attendance record
·         Up 19 percent over 2008 (previous record year)
·         Up 31 percent over 2009

Senior citizen attendance – Up 308 percent over 2009

Saturday attendance – Up 9.5 percent over 2009

Dealer promotion of $2 off coupons – Up 455 percent over 2009

Advance e-ticket sales – Up 65 percent over 2009

Overall show attendance – Increased between one and two percent over 2009 (1.19 percent)

NOTABLES:    2010 Denver Auto Show…

·         Ten pre-show events hosted by CADA
·         Two auto show mascots, one was new in 2010 (popular with younger set) – Ott-Oh           and Car-Lotta
·         Automobile history panels introduced – 1902 to 2010 chronological news highlights
·         Exclusive four-minute loop video on importance of new cars to improved air quality
·         Social media promotion of auto show events – YouTube, Facebook, Twitter (30 other           sites)
·         Ford exhibit staff to recommend more space, bigger exhibits for 2011 – go from           Silver level to Gold level.
·         Significant pre-show ‘earned media’ promotion.
·         Auto show attendees demonstrated strong public interest and support for industry!
·         Denver’s show is one of the few that posted increased attendance in current show           cycle.

Listed here are several articles pertaining to the
auto industry in general that appeared recently in newspapers and other media outlets across the nation.

INDEPENDENT CONTRACTORS: BE CAREFUL OF EMPLOYEE MISCLASSIFICATION

Colorado Law provides the criteria for when an employee can be considered an independent contractor, and contains nine factors used in evaluating whether a worker is properly classified. Last year, the Colorado legislature increased penalties for the misclassification of independent contractors (HB09-1310).  There are now substantial fines and other penalty risks to employers that misclassify an employee as a contractor. The fine for the first willful violation is up to $5,000 for each misclassified employee and up to $25,000 for additional employees.  The fines and penalties are primarily aimed at ensuring that employers pay appropriate taxes to the state for unemployment and workers compensation.

See the guest article below for more guidance on this topic:
HOW TO DETERMINE WHETHER A WORKER IS AN EMPLOYEE OR AN INDEPENDENT CONTRACTOR
By Michelle R. Magruder, Esq. of Nemechek & Magruder, LLC 

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If you have questions on any legal or regulatory topic, please contact:

• Tammi McCoy, Vice Pres., tammi.mccoy@coloradodealers.org, 303.282.1449
• Tim Jackson, President, tim.jackson@coloradodealers.org, 303.282.1448

DISCLAIMER: CADA is not authorized to dispense legal advice.The information contained in this weekly email is intended to provide important updates and reminders regarding statutes, litigation, and regulations. CADA always advises that dealers should consult legal counsel on the specifics of any laws or regulations to ensure proper compliance

ALL PINNACOL BILLS, EXCEPT THE BIG ONE, PASS OUT OF SENATE JUDICIARY

Late into the evening Wednesday, March 31st, the Senate Judiciary committee heard 8 hours of testimony on the 6 bills relative to the state regulation of Pinnacol Assurance, Colorado’s workers’ compensation carrier of last resort.  All of the bills before the committee, except for HB 1012 regarding the use of video surveillance on claimants, passed out of the committee on a party-line vote.  Arguably HB 1012 is the most contentious of the Pinnacol bills and has been widely and vocally fought by the business community, including CADA.  The Senate sponsor of HB 1012, Sen. Morgan Carroll (D-Denver) explained that she wanted to work on amendments to the bill since she did not have political support for the measure in its current form.  As a result, Sen. Carroll laid the bill over, a procedural move that allows the bill to be heard by the same committee at a later date.  We will continue to fight to kill this bill on behalf of CADA and Colorado businesses.

The other Pinnacol bills that passed out of the committee were HB 1038 regarding a workers compensation claims brochure; SB 13 regarding workers compensation accountability; HB 1009 regarding the Pinnacol board of directors; SB 12 regarding workers compensation benefits and SB 11 regarding conflicts of interest in workers compensation claims. 

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WELLNESS BILL HEARD BY SENATE BUSINESS, LABOR AND TECHNOLOGY COMMITTEE

HB 1160 by Rep. Joe Rice (D-Littleton) and Sen. Shawn Mitchell (R-Broomfield) was heard by the Senate Business, Labor and Technology committee on Wednesday.  The bill would allow small group and individual insurance companies to offer plans that provide financial incentives for policyholders that commit to healthy lifestyles and are able to provide proof of outcomes of those efforts.  For example, an obese employee who committed to a weight loss program and was able to show measureable weight loss results would get a discount in his or her health insurance.  If the employer pays 100% of an employee’s health insurance, the employer would receive the rate reduction.  The bill is heavily opposed by several consumer and disability groups who believe the measure will unfairly discriminate against people who are unable to participate in a wellness program.  To address that issue, the sponsors have added language that allows disabled people to receive a waiver and still get the benefit of the rate reduction.  The bill will be up for a final vote on Wednesday, April 16th.

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SUMMARY OF HB-1049 - CADA'S FRANCHISE BILL

Governor Ritter has signed HB 1049, CADA’s Franchise bill for the 2010 Legislative Session.  The bill passed out of the House of Representatives by a vote of 60-5 and out of the Senate by a vote of 35-0.  The bill had 63 of the 100 members of the General Assembly (almost two-thirds of the entire body) who signed on as co-sponsors.  All of the provisions in the bill were effective immediately upon Governor Ritter signing the bill on Monday, March 22, 2010.  The summary below reflects current and enforceable law in Colorado.  To read the bill in its entirety, please CLICK HERE.

Provisions applicable to ALL Colorado dealers:

1. Exporting of motor vehicles:  If a dealer sells a vehicle that is ultimately exported outside their AOR, the manufacturer must prove that the dealer knew the vehicle was going to be exported prior to imposing any penalties, including but not limited to, imposing fines and penalties or withholding inventory.  Additionally, there is now a presumption in the statute that the dealer did not have knowledge that the vehicle might be exported.
2. Warranty and sales incentive audits:  Last year SB 91 provided a 15 month submission period for dealers on warranty and sales incentive claims.  It also limited the manufacturer’s ability to audit those claims to 15 months.  Under HB 1049, we have reduced the submission period AND the audit period to 9 months.
3. Facility upgrades:  Within 90 days of a manufacturer terminating a dealer’s franchise agreement for any reason other than fraud, misrepresentation or other crimes, a manufacturer must reimburse a dealer for all manufacturer required upgrades to the dealer’s facility made within the previous 5 years.
4. Manufacturer operation of a dealership:  An existing provision in Colorado law already prevented a manufacturer from operating a dealership so long as they were not franchised dealerships.  This statue narrows provision so a manufacturer that has any dealerships in Colorado, whether franchised or not, is prohibited from operating a dealership.
5. Future manufacturer bankruptcy:  In the event of a future manufacturer bankruptcy in federal court, the manufacturer may not discharge its obligation to pay terminated Colorado dealers the termination assistance and payment provisions provided in Colorado law.
6. Definition of the word “franchise”:  As a clarifying provision, Colorado law now defines the word franchise to include “the authority to sell or service and repair motor vehicles of a designated line-make granted through a sales, service, and parts agreement with the manufacturer, distributor, or manufacturer representative.”

Provisions applicable to dealers terminated in GM and/or Chrysler bankruptcies:

1. Right of First Refusal:  All dealers who were terminated in the GM and Chrysler bankruptcies have a right of first refusal in the event that the manufacturer wishes to re-enter the market previously held by the terminated dealer.  The right of first refusal is for five (5) years from the date of the termination of the franchise.
2. Optional cash payout:  In the event that a manufacturer wishes to re-enter the market previously held by a terminated dealer, the dealer has the option to either (1) take back their franchise under the right of first refusal OR (2) instead accept the termination payments required under Colorado law that the manufacturers did not have to honor during their federal bankruptcies.
3. Mandatory notice to terminated dealers:  In the event a manufacturer wishes to re-enter the markets previously held by a terminated dealer, they must give notice to all dealers, including the terminated dealer, within a 5 mile radius of the point they wish to open.  This is a critical provision of the bill as it gives terminated dealers standing to challenge the reassignment of their franchise to other dealers.  This will prevent Chrysler and GM from reallocating franchises of terminated dealers to other dealers.  This notice provision is for 5 years and it mirrors the right of first refusal time frame.
4. Definition of “right of first refusal area”:  In an effort to establish the physical boundaries under which a manufacturer must offer the right of first refusal, Colorado law has defined a new term, “right of first refusal area” which means “a five-mile radius extending from the location of where a motor vehicle dealer had a franchise terminated, cancelled or not renewed if the franchise was in a county with a population of more than one hundred fifty thousand or a ten-mile radius if the franchise was  in a county with a population of one hundred fifty thousand or less.”
5. For dealers whose franchises were already reassigned prior to Federal arbitration and the implementation of HB 1049:  The right of first refusal survives the manufacturer reallocating those franchises prior to the implementation of HB 1049.  This section of the bill is retroactive.  If a dealer does not want their franchise back, they have the option to seek the cash payout indicated in section 2 above.
   

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Questions or Comments?  Please contact:

• Melissa Kuipers – VP of Government Relations and Communications
  melissa.kuipers@coloradodealers.org, 303.457.5115
• Tim Jackson, President, tim.jackson@coloradodealers.org, 303.282.1448

TO REGISTER ONLINE FOR ANY CADA SEMINAR OR EVENT, PLEASE VISIT: www.coloradodealers.org/registration

If you have a particular area of interest or would like to suggest a training seminar topic, please contact Lauren Stadler at 303.457.5123 or lauren.stadler@coloradodealers.org

JERRY ROTH PASSES AWAY

Jerry Roth, 86 – Former owner of Jerry Roth Chevrolet and Jerry Roth Isuzu, Kia Volkswagen passed away April 10th 2010.

Funeral services will be held on Thursday, April 15th at 10:00am at Our Lady of Fatima Catholic Church, 1985 Miller Street, Lakewood, Colorado.

In lieu of flowers, the family requests donations to the Capuchin Province of Mid-America, 3613 Wyandot Street, Denver, Colorado 80211.

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LET US KNOW ABOUT YOUR ACCOMPLISHMENTS!

Have you or anyone else at your dealership won an award recently? Have you or your dealership provided any outstanding community service? We want to recognize such accomplishments. Please send us a brief write-up of the award or event along with any other information to milestones@coloradodealers.org. Also include your contact information for further follow-up.

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