UNDER THE GOLD DOME
April 30, 2008

STATE BILL REVIEW

Governor signs Sunday Liquor Sales bill…Car Dealers Remain Untouched
Governor Ritter has signed the Sunday sales of alcohol into law.  This legislative session, Senator Jennifer Veiga (D), Denver, and Representative Cheri Jahn (D) Wheat Ridge, sponsored the bill to repeal a portion of the state’s blue law to allow alcohol sales on Sundays. Both car dealers and liquor stores are listed in Colorado’s Blue Laws in the statutes. A blue law is one restricting activities or sales of goods on Sunday, to accommodate the Christian sabbath. The first blue law in the American colonies was enacted in Virginia in 1617. Contrary to popular belief, there is no evidence to support the assertion that the blue laws were originally printed on blue paper. Instead, the word blue was commonly used in the eighteenth century as a disparaging reference to rigid moral codes and those who observed them.

Many states have repealed their blue laws allowing those businesses, once restricted by the blue law, to now be able to open on Sundays. For example, until 1985, Texas car dealerships continued to operate under blue-law prohibitions. Many states still prohibit selling alcohol on Sunday, although it’s now the second busiest shopping day of the week. Senator Veiga understands that Colorado Auto Dealers want to remain under the state’s blue laws. She has spoken on the issue, stating that she did not want her bill to flow over into other areas of the blue laws.  The legislation’s focus was to allow liquor stores to open on Sundays, and keep other businesses (auto dealers) out of the bill. Prior to the legislative session, CADA’s lobbyist spoke with Senator Veiga in hopes of obtaining a tight title for the bill. 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. There was one attempt to repeal the blue law of in the House of Representatives to include the car dealers to enable cars sales on Sunday, but because the title was so very restrictive, it was not allowed to be amended to the bill. Car dealers have an economic issue when it comes to opening one more day and opening one additional day does not always generate additional sales. Lights, heat, a/c and more employees and the increase in administration for these extras add up to increased expenses for auto dealers.  As we meet with our state legislators we need to visit with them about these negative implications and urge them to not support repealing of any additional blue laws in our state.

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 now awaits its second hearing in the House.

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.

Franchise Law Reform
Meetings are being scheduled to discuss the proposed revisions to the Franchise Act of Colorado with both proponents and opponents. CADA will continue to address input from both sides and will proceed to draft legislation for the upcoming legislative session year. The revisions are being addressed to revise the statutes to make the playing field, between manufacturers and dealers, a more level one.

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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 (Initiative 41) on the ’08 November ballot. In response, opponents (AFL-CIO) have moved the rook, bishop, and the knight in this state ballot chess game by introducing anti-business measures to the upcoming ballot. Colorado businesses could spend millions of dollars campaigning against the proposed ballot initiatives as these initiatives would devastate the state’s employment environment.  AFL-CIO backs the measure that are intended to crack down on corporate fraud, require employer paid health care and employers from terminating workers without notice or reasonable cause.

The Denver Chamber of Commerce has retained Doug Friednash of Fairfield and Woods, P.C. to assist in the “checkmate” of these initiatives. The measures are being challenged based upon alleged violations of single-subject rule and insofar as they are misleading. The business community is 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. This initiative is awaiting review from the title board.

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. 

To summarize, the proposed business-backed measures would:

  • Make Colorado a right-to-work state by prohibiting union membership or the payment of fees to unions as a condition of employment.
  • Prohibit mandatory deduction of union dues or fees from state employees' paychecks.

The Initiatives backed by unions would:

  • Require employers to give annual cost-of-living raises.
  • Require employers with more than 20 employees to provide health insurance.
  • Deny tax breaks and incentives to businesses that send Colorado jobs to foreign countries.
  • Raise property taxes on businesses.
  • Allow injured workers to sue outside the workers' compensation system.
  • Impose criminal and civil penalties on corporate executives who allow fraud to occur.
  • Make it harder to fire workers without "just cause."

CLICK HERE to review the current status of each initiative.

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The RAQC - Regional Air Quality Commission

The Regional Air Quality Commission has scheduled a meeting for May 1 at 1445 Market St. in Denver. The Air Pollution Control Division will present the analysis of potential VOC stationary source control strategies, including oil and gas industry strategies, for the Council’s discussion and consideration. The Summer 2008 Ozone media campaign will be presented by Launch Media. The RAQC plans to take action to approve the advertising content.  The Commission will also discuss revised local government funding allocations based on the latest population and assessed valuation data as well as addressing a strategy to get more local governments involved in RAQC funding.  

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ON THE FEDERAL FRONT

D.O.T. PROPOSES NEW CAFE RULE ON EARTH DAY
U.S. Transportation Secretary Mary E. Peters announced this week that she wants fuel efficiency standards for both passenger vehicles and light trucks to increase 4.5 percent per year over a five-year period, ending in 2015. This would mean a 25 percent hike overall that far exceeds the 3.3 percent baseline proposed by Congress last year.  Secretary Peters believes the proposal to increase fuel economy for passenger cars from the current 17.5 miles per gallon to 35.7 miles per gallon by 2015 and for light trucks 23.5 mpg in 2010 to 28.6 mpg in 2015 is "historically ambition, yet achievable."  Automobile dealers and manufacturers support national standards that are reasonable, and oppose the adoption of state initiatives that create a patchwork of their own standards.

EPA SEEKS DOCUMENTS FROM WAXMAN
The California greenhouse gas waiver submitted to, and denied by, the Environmental Protection Agency's Administrator Stephen Johnson has caused quite a stir. First, House Oversight and Government Reform Chairman Henry Waxman (D-Calif.) sought to retrieve documents from the EPA, proving Administrator Johnson did not listen to calls by fellow EPA staffers encouraging him to approve the state's waiver application. Now, EPA has decided turnabout is fair play, and has requested Chairman Waxman provide transcripts of interviews his committee staff had with seven EPA employees. EPA has given the Democrats thousands of documents and may be asked to supply more. 

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. 

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.  In addition, U.S. Representative Peter Welch, of Vermont, is sponsoring H.R.5560 which would permit California and other states to effectively control greenhouse gas emissions from motor vehicles.

THE FIGHT FOR ARBITRATION CONTINUES
Legislation (HR 5312) aimed solely at auto dealers, was introduced in the House.  If passed, this legislation 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."

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.  Arbitration - a process that has a proven record of being fair to both the dealer and the consumer, helps to control costs for both parties involved and results in a more timely resolution to the dispute.  Arbitration is an efficient, effective, and less-expensive means of resolving disputes outside of court.

BILL ALLOWS EPA TO RETROFIT OLD DIESEL ENGINES
This month 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.  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 from 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