UNDER THE GOLD DOME
May 7, 2008

STATE BILL REVIEW

SB244 made its appearance late Friday last week. Originally the legislative session was expected to adjourn on Friday, but due to so many last minute bills and amendments, the session now plans to adjourn no later than Wednesday at midnight. Amongst the late bills that surfaced was Senate Bill 244 which proposed the creation of a trust fund to repair the 122 crumbling unsafe bridges in the state. The bill’s language proposed a 25 dollar increase in registration fees, later dropped to $10 (2 per family) and it included and increase in fees for those renting cars by six dollars per day with no cap, which was later reduced to three dollars with a four day cap. Car dealers were sent a survey to illustrate our industry’s perspective. Results from the survey indicated the rental car fee increase component of the bill, which is often picked up by car dealers, needed to be struck or amended. This bill took many turns.  In fact, the sources of funding began changing so often, that it was nearly impossible to know what we as lobbyists could negotiate. This was primarily due to the nearly hourly revisions coming from legislators, the Colorado Contractors Association (those promoting the bill) as well as the Governor’s office which was working a higher level deal on allocation of general funds with the Republican Senators. After nearly two days of back and forth deals, vote counting, and alerting all other likely opponents, the deal was to table the bill. We have bipartisan support to work on the issue over the summer interim which will allow the state to look for a broader coalition to come forth to assist with the issue of transportation and the failing infrastructure.

Thank you to all the dealers that sent in their perspective (via the survey) regarding this legislation. Due to your input we were successful in challenging the focus of the legislation.

Stay tuned next week for an overview of the legislative session of 2008.

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The RAQC - Regional Air Quality Commission

The Regional Air Quality Commission has scheduled a Modeling Stakeholder Meeting on Tuesday, May 20, 2008, at the Regional Air Quality Council's office at 1445 Market St., 2nd floor Board Room beginning at 1 p.m. at the Denver Chamber of Commerce at 1445 Market Street in Denver. This meeting will discuss the modeling used to track and monitor ozone in various parts of our state. Information is available at OzoneAware.org

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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