UNDER THE GOLD DOME

STATE BALLOT INITIATIVES - A Chess Game
The debut of three anti-business ballot initiatives is yet another chapter in the story behind the Collective Bargaining Executive Order issued by Governor Ritter. Several business groups responded to Gov. Ritter’s Executive Order by placing “Right to Work” language on the ’08 November ballot. In response, opponents have moved the rook, bishop, and the knight in this state ballot chess game by introducing anti-business measures to the upcoming ballot.

The Denver Chamber of Commerce recently held a meeting to discuss options to “checkmate” these initiatives. Additionally, they have hired Doug Friednash of Fairfield and Woods, P.C. to challenge these initiatives. The measures are being challenged based upon alleged violations of single-subject rule and insofar as they are misleading.  Businesses are extremely concerned with the following three initiatives.

INITIATIVE 57 - “Criminal and Civil Liability of Businesses and Individuals for Business Activities"
Initiative 57 dramatically expands existing criminal liability of business entities to all individual employees, officers, director, and any other person who is authorized to act on behalf of a business entity. The effect of this measure is to create dozens of new crimes with procedural and substantive changes.

It allows any Colorado resident to bring an action for civil damages, regardless of whether that person is harmed or injured, against any business entity, employees, officers, directors, and any other person who is authorized to act on behalf of a business entity.

Additionally, awards of damages are to be paid to the State of Colorado’s General Fund, which is exempt from state spending and revenue limitations.

INITIATIVE 62 -  “Just Cause for Employee Discharge or Suspension”
The purpose of this initiative is to eliminate employment-at-will relationships in Colorado. Employees can only be terminated or suspended for “just cause.”  Definition of just cause goes far beyond traditional notions of incompetence and substandard performance.  The reduction in force of less than 10% of a business in Colorado does not constitute just cause.  It eliminates the employer’s ability to contract with employees. It also mandates a mediator hear all disputes and has the right to order back pay, reinstatement and attorney’s fees.  Mediation determines final decision and cannot be addressed further in court.

INITIATIVE 63 - “Fair Share Colorado”
This mandates that every business which employs 20 or more employees (Sponsors of the measure are considering reducing the threshold from 20 employees to 5 employees) to provide major medical health care coverage for its employees and their dependents.

Several measures with similar titles have also been filed and are being monitored. The Denver Chamber of Commerce has set aside funds to move this process forward. The Chamber has requested financial assistance from businesses to assist in “operation checkmate.” CADA and MDADA will be addressing these initiatives at the upcoming Board of Directors meeting. CLICK HERE to review the current status of each initiative.

 

STATE BILL REVIEW

Franchise Law Reform
Several dealers met to discuss revisions to the Franchise Act of Colorado. The suggestions are "in review" as CADA staff assesses the plans to revise the statutes that would make the playing field, between manufacturers and dealers, a more level one.

Manufacturers to sell directly to consumers?
Senate Bill 179 which was sponsored by Senator Sandoval and initiated by Transwest and their lobby was pulled by the sponsor at Transwest’s request last week.  This bill is now dead.  CADA is researching the possibility of adding similar language to their franchise revisions in the future.

 CIADA Legislation
The Colorado Independent Auto Dealers Association (CIADA) is currently pushing a bill (SB 151) through the legislature that requires eight hours of pre-licensing training for applicants for a USED motor vehicle dealer, a wholesale motor vehicle dealer or a wholesaler license. The bill allows the MVDB to set the components of the training program. Sen. Tochtrop (D) is sponsoring the bill in the Senate, and Rep. Don Marostica (R) is sponsoring the legislation in the House of Representatives. CADA views this bill as a benefit for the industry as a whole and supports the bill with an amendment. Nancy Burke testified on behalf of CADA in support of the bill with an amendment that would exempt dealers who wish to open up a used car dealership that have been operational as a new car dealer within the past three years. The Senate Committee adopted the amendment. The bill has passed through the Senate has been introduced in the House and will now be heard in the House Transportation Committee on March 20th. CADA’s lobbyist will testify again on behalf of the measure.

Sunday Sales Bill heads for the House…Car Dealers Remain Untouched
Sen. Viega (D), Denver, Rep. Cheri Jahn, (D) Wheat Ridge have proposed legislation to repeal a portion of the State’s blue law to allow alcohol sales on Sundays (Senate Bill 082) will make its way to the House of Representatives as it has cleared the House Appropriations Committee last Friday.  The bill has already passed through all three readings in the Senate and through the Senate Finance Committee. Rep. Jahn has mentioned she would like the effective date of the bill moved to July 1 as that is the date that most bills signed by the Governor go into effect. CADA is actively monitoring this bill to ensure car dealerships remain exempt from this bill.

Sen. Viega understands that Colorado auto dealers want to remain under the State of Colorado’s blue laws. She has spoken on the issue, stating that she does not want her bill to flow over into other areas of the blue laws. Her attempt is to allow liquor stores to open on Sundays, and keep other businesses (including auto dealers) out of the bill. Prior to the legislative session, CADA spoke with Sen. Viega in hopes of obtaining a tight title for the bill. Our efforts paid off as the bill was drafted with a very tight title, meaning only alcohol sales could be addressed in the bill. Adding any other business group would be virtually impossible. We will continue monitoring this bill. From time to time, however, you may see reference to auto dealers due to the fact that auto dealers are the last business group to stay under the blue law umbrella.

Biennial Motor Vehicle Registration
Senate Bill 070, sponsored by Sen. Bill Cadman (R), requires the department of revenue to offer the owner of a vehicle the option to register biennially. The bill exempts vehicles that are required to have an emissions test within the two year period. The proposed legislation also repeals the 2003 limit on biennial emissions testing of light duty non-commercial diesel vehicles. This bill has been referred unamended to the Appropriations Committee. 

Air Quality Controls for Mobile Machinery
HB 1230 proposed compliance with the Federal Tier II standard of the EPA’s Clean Air Act. Rep. Fisher (D) of Ft. Collins wanted to limit emissions from mobile machinery sources (Cats, etc.) to the Federal Tier II level and then within five years increase the requirement to the Tier III level. The bill establishes a per horse-power fee for non-compliance which could, in some instances, be upwards from $50,000+ fine.  In the nearly two hours of testimony in the Health and Human Services Committee, several lawmakers spoke about the need for cleaner air.  This bill died a slow death in committee this past Thursday.  HOWEVER…this bill’s language has been rumored to be added as an amendment to a renewable products and services bill that is sponsored by Rep. Kefalas. Apparently, CPR can work.

Disposition of Abandoned Vehicles
Senate Bill 144, sponsored by Sen. Windels (D), Arvada, establishes a process for motor vehicle repair shops at which a motor vehicle has been abandoned to follow in order to obtain a certificate of title and sell the abandoned motor vehicle in Title 38. This bill will mirror language to a certain extent, already contained in Title 42. Senate Bill 144 revises language in Title 38 for consistency purposes. It requires the repair shop, or its agent, to establish the retail fair market value of the vehicle and have the abandoned motor vehicle inspected and a verification of vehicle identification number (VIN) completed by a peace officer certified to perform VIN inspections. After the repair shop has obtained a certificate of title for the abandoned motor vehicle, authorizes the repair shop, or its agent, to sell the motor vehicle in a commercially reasonable manner at a public or private sale to recoup its costs. The service repair shops are monitoring this bill to ensure the consistency between the two sections in statute. The Department of Revenue spoke at the past committee hearing and proposed further changes to the bill, so much in fact, we could be faced with using yet another form which would execute the changes incurred by this bill.  This bill awaits second hearing in the House.

Additionally...
Other bills we are monitoring include business personal property tax, limits on selling items over the internet, license plates, hazardous waste legislation, automobile theft, prohibition of employee sharing wage information, disclosures of credit card receipts and more. 

 

ON THE FEDERAL FRONT

The EPA Drama Never "Waivers"
California Sen. Barbara Boxer, chairwoman of the Senate Environment and Public Works committee, continues her fight with the Environmental Protection Agency (EPA) over its decision to deny California's request to implement its own greenhouse gas emission rules for vehicles. Boxer has gone to great lengths to show that EPA Administrator Stephen Johnson was unjustified in his decision to reject the California request of a waiver for national emissions requirements. Johnson recently said, "climate change is not unique and exclusive to California;" therefore, there is no need to single them out when a national standard for tailpipe emissions has been mandated through the Clean Air Act.  

A total of 16 states, including California, are suing EPA over Johnson's decision because they want to enact California's tailpipe standard. Boxer has introduced legislation (S. 2555) that would overturn the ruling, and she plans to file an amicus brief in support of the states who desire to enact California’s rules.  

CLICK HERE for to read a related article, "EPS justifies denial of emissions waiver for California," from the Los Angeles Times.

House Oversight and Government Reform Chairman Henry Waxman (D-CA) has threatened to subpoena EPA documents containing communication between EPA and White House regarding EPA Administrator Johnson's denial of the California waiver request.  Waxman has openly expressed his discomfort with the decision against California and 16 other states to create and enact their own tailpipe emissions laws.  During a hearing with Administrator Johnson, Rep. Ed Markey (D-MA) said he plans to take all actions necessary to retrieve documents confirming his belief that Johnson was advised by his EPA colleagues to grant the waiver.  Both the House and the Senate have introduced legislation to overturn the EPA decision - negating the benefit of the national Corporate Average Fuel Economy (CAFE) standards passed by Congress in December of 2007. 

SAYING NO TO ARBITRATION?
Legislation (HR 5312) was recently introduced in the House that would prohibit dealers from requiring customers to accept binding arbitration to settle disagreements over sale or lease deals. When Congresswoman Linda Sanchez (D-CA), chairwoman of the House Judiciary Committee subcommittee on Commercial and Administrative Law, introduced her bill she said the legislation would "connect the chain from manufacturers to dealers and from dealers to consumers."

At the hearing held on Thursday in Sanchez's subcommittee, consumer advocates voiced their complaints against what they feel is a biased arbitration system that does not deliver justice. The consumer groups' spokespeople alleged that automobile dealers prey on customers who are not well-educated, have fewer monetary resources, and even military servicemen and -women by creating "very sophisticated fraud" plans. Consumer groups are advocating for every consumer's right either to sue and take a dealer to court or to voluntarily and knowingly opt-in to binding arbitration in a dispute. Also testifying at the hearing was a representative from the American Arbitration Association who urged the committee not to amend the Federal Arbitration Act because it is the basis for the vast majority of business-to-business arbitration cases.

We will continue to follow this possible ban on pre-dispute arbitration for auto dealers in sale or lease transactions. It is also anticipated that Sen. Russ Feingold (D-WI) will introduce a companion bill in the Senate.

BILL ALLOWS EPA TO RETROFIT OLD DIESEL ENGINES
Last week the House Energy and Commerce Committee approved a bill to allow the Environmental Protection Agency to use funds to retrofit older diesel engines. The Senate unanimously passed its version Feb. 29. Between 2001 and 2006, companies agreed to enter into settlements worth more than $45 million for violations of the Clean Air Act. These funds will be used to retrofit old diesel engines in school buses and other heavy vehicles.

The EPA estimates there are 11 million older diesel engines in the United States that lack emissions control technology. These vehicles produce more than 1,000 tons of particulate matter every day and the pollution causes approximately 21,000 premature deaths in the United States each year, according to a Senate report.

"This bipartisan legislation will allow badly needed funds from environmental settlements to go towards reducing the effect of diesel engines on our environment," said Rep. John D. Dingell, D-Dearborn, chairman of the House Energy and Commerce Committee.

The EPA has dramatically tightened emissions limits on diesel engines in recent years for vehicles on the roads, requiring ultra-low sulfur diesel fuel. The EPA hasn't set its own limits, but is working to do so.

The movement on the bill comes as rising diesel fuel prices increase automakers logistics costs.  A purchasing chief fro GM, stated that the automaker's logistics costs -- for moving parts and hauling new cars to dealers -- increase $6 million annually for every $1 increase in the price of a barrel of oil.

Automakers hope to increase diesel vehicle sales over the next decade to comply with new fuel efficiency standards, but the high price of diesel may deter some customers.

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If you have questions on any legislative topic, please contact:

Colorado Automobile Dealers Association
 290 East Speer Boulevard Denver, CO  80203
 Telephone:  303.831.1722  |  Facsimile: 303.831.4205
 www.cadaonline.org