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Modern Tire Dealer goes to Washington: The Who, What, When and Where of issues that will directly affect your business, and Why you should care

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Modern Tire Dealer goes to Washington: The Who, What, When and Where of issues that will directly affect your business, and Why you should care

Steroid use among Major League Baseball players is the hot media topic on Capitol Hill. But there are a lot of other legislative issues being addressed that, if passed, will directly affect your business.

The recent Automotive Legislative Summit in Washington, D.C., gave association leaders and independent tire dealers a chance to lobby for the issues they hold dear. Among them was the Motor Vehicle Owners’ Right to Repair Act, a hot button topic pitting independent repair shops against vehicle manufacturers and their franchise dealers.

The Summit’s sponsors, the Automotive Aftermarket Industry Association (AAIA) and Tire Industry Association (TIA), emphasized the importance of passing the Right to Repair Act, which would prevent the restriction of vehicle repair information. However, they made sure other small business concerns receiving Congressional scrutiny were not forgotten. They include bills to reduce health insurance costs and prevent aftermarket parts counterfeiting.

Also getting into the act, the Department of Justice is looking at making retail shops and small manufacturers more wheelchair accessible under new American Disabilities Act guidelines.

It’s a busy time in Washington, and Modern Tire Dealer was on hand to sort through the rhetoric.

RIGHT TO REPAIR ACT

Recently introduced in the House of Representatives by Rep. Joe Barton (R-Texas), the Motor Vehicle Owners’ Right to Repair Act (H.R. 2735) would prevent “vehicle manufacturers and others from unfairly restricting access to the information, parts and tools necessary to accurately diagnose, repair, re-program or install automotive replacement parts,” according to the AAIA.

“It’s the information that the car owner deserves for the technician to have,” said Dave Caracci, AAIA chairman.

Barton, chairman of the House Energy and Commerce Committee, was quick to point out that the Right to Repair Act would not require manufacturers to disclose trade secrets. It is designed to protect proprietary information.

Barton expects to get the bill through the House of Representatives this year. “This bill is in my committee’s jurisdiction; if I can’t move a bill out of my own committee, I’m not much of a chairman.” Getting it through the Senate will be harder, however.

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The bill faces stiff opposition, according to Dr. Roy Littlefield, TIA’s executive vice president. Both vehicle manufacturers and the coalition of auto dealers are campaigning against it. The Federal Trade Commission, which would be involved in developing the regulations and enforcing them, also has had problems with it.

The Automotive Service Association (ASA) also opposes the bill. The ASA says its agreement with domestic and international car makers to make repair information readily accessible to all repair shops makes the Right to Repair Act unnecessary. ASA also has the support of the National Automotive Service Task Force.

Aaron Lowe, the AAIA’s vice president of government affairs, said the agreement “has helped move the ball forward.” However, there are “still lots of holes” in the information disseminated by the auto companies.

“Let’s always remember (the agreement) is a promise and not legally enforceable.”

Steve Handschuh, senior vice president-commercial for AutoZone Inc. and representative of CARE (Coalition for Auto Repair Equality), admitted it will take an “extraordinary effort” to get the Right to Repair Act passed. “I think we have an excellent opportunity to do it with this Congress.

“The capital that makes things run in Washington is dollars and cents,” he added.

There are 118 co-sponsors of H.R. 2735 (out of 435 members in the House of Representatives), “which, considering the opposition, is huge,” says Lowe. That may not seem like much, but out of 5,400 pieces of legislation at the last session of Congress, only 227 had more than 100 co-sponsors (4%).

Eleven senators support the Senate’s companion bill, S. 2138.

The first state to promote its own Motor Vehicle Owners’ Right to Repair Act is New Jersey. "It’s a shame that vehicle owners are put in a position like this," said New Jersey Assemblyman Reed Gusciora (D-Mercer), the bill’s sponsor. "It should be the responsibility of the manufacturer to give this information to the consumer….”

The Alliance of Automotive Service Providers of New Jersey supports the bill, according to President Bob Everett, who has been working for more than two years on the national Right To Repair Act.

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AMERICANS WITH DISABILITIES ACT

New accessibility requirements for the Americans with Disabilities Act (ADA) are being considered by the Department of Justice. Title I of the ADA exempts very small employers from some employee accommodation requirements; the new rules would apply to every retailer with employees regardless of size.

The rules also would apply to small manufacturers.

According to the Small Business Administration’s Office of Advocacy, the new requirements could require you to make:

* employee-only areas such as stock rooms and offices wheelchair accessible, “whether the employer has ever had an employee in a wheelchair or is likely to in the future.”

* 60% of your public entrances wheelchair accessible (the current requirement is 50%). A retail shop with two public entrances might be forced to make both comply with ADA standards.

The Department of Justice also is considering requiring toe clearance for wheelchair users that would eliminate the bottom shelves of sales counters.

"I can't think of anything more pressing than this," said Rep. Don Manzullo (R-Ill.), chairman of the House Small Business Committee. "This is about a crushing regulation that could (impact) every single retailer."

Comments on the proposed regulations must be submitted to the Department of Justice at www.ada.gov/proposal.htm by May 31, 2005.

HEALTH PLAN LEGISLATION

The Small Business Health Fairness Act of 2005 (H.R. 525/S. 406) would allow small companies to band together to purchase affordable health care coverage through a trade association.

The AAIA said the uniform federal regulation of Association Health Plans (AHPs), as they are called, ”will help small businesses lower their administrative costs because, by operating under federal law, these plans can avoid the costs of complying with 50 different sets of state benefit mandates.”

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On March 17, the House Education and the Workforce Committee approved the legislation, which now proceeds to the full House. A vote on the measure is expected later this spring.

Both TIA and the Specialty Equipment Market Association have made passage of the bill a top priority.

Stephanie Salmon, AAIA’s director of government affairs, said the bill offers more insurance plan options to retailers, which is important because “there is very little competition (among insurers) at the state level.”

The current bill has more than 115 bipartisan cosponsors. More than 170 nationwide trade association representing more than 12 million employers and 80 million workers support the bill.

ANTI-COUNTERFEITING

Counterfeit parts cost automotive suppliers $12 billion annually, according to Rep. Joe Knollenberg (R-Mich.) They also steal jobs and money away from legitimate businesses. “Counterfeiting is not a victimless crime,” he said.

“The U.S. Customs Service and Border Protection estimates that counterfeiting costs U.S. businesses $200 billion annually,” says Aftermarket Legislation Summit organizers. Inferior products also raise health and safety concerns.

The World Customs Organization estimates counterfeiting represents 7% of the world’s trade.

The Stop Counterfeiting in Manufactured Goods Act of 2005 (H.R. 32) would tighten existing criminal sanctions against counterfeiters. It would mandate the destruction of equipment and materials used for making and packaging counterfeit goods (which the current law does not).

In addition, it would clarify the current federal law that prohibits trafficking in counterfeit labels, patches and packaging for use on counterfeit products. “Sophisticated counterfeiters today also can sell the counterfeit versions of the trademarks themselves, on labels, patches and medallions, for use by others who affix them to counterfeit products,” said the AAIA.

The original 1984 bill criminalized counterfeiting activity, according to Lee Kadrich, the AAIA’s vice president of government affairs.

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ASBESTOS LITIGATION REFORM

The Fairness in Asbestos Injury Resolution Act (FAIR) is the latest proposed asbestos reform legislation. It hopes to set up a $140 billion industry-funded trust fund that pays fixed award amounts depending on pre-set eligibility criteria.

As it currently stands, Senate Bill S. 2290, sponsored by Senator Arlen Specter (R-Pa.), is being opposed by the plaintiffs bar and organized labor.

According to the AAIA, the growing number of asbestos lawsuits -- 100,000 filings in 2003 alone -- has cost American businesses more than $70 billion, sent more than 70 companies into bankruptcy and cost more than 60,000 jobs. “For many years, the aftermarket has sought a fair solution to the worsening asbestos litigation crisis, which increasingly threatens aftermarket firms that made and sold asbestos-containing products.”

In the tire industry, a number of prominent tire manufacturers, including Goodyear Tire & Rubber Co. and Groupe Michelin, have been faced with asbestos-related lawsuits.

The crux of the argument against the legislation is that it doesn’t compensate victims fairly versus unimpaired claimants. (The draft bill being considered in the Senate allows for the return to the court system if funds are insufficient for claims.)

In his story about asbestos legislation in the Sept. 6, 2004, issue of Fortune magazine, (“Welcome to the new asbestos scandal”), Roger Parloff, despite some reservations, wrote “The FAIR Act is the closest Congress has ever gotten to bringing rationality and finality to the asbestos mess, and we may never get this close again.”

There appear to be no studies available on the short-term effects of asbestos in either animals or humans. However, long-term exposure can cause lung diseases such as asbestosis and cancer.

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TORT REFORM

“A long-fought battle to make our nation's legal system more fair has been won,” said Donald Shea, CEO and president of the Rubber Manufacturers Association, after the House of Representatives passed the Class Action Fairness Act.

The class action reform legislation (S. 5) was passed 279-149 in the House and 72-26 in the Senate. The bill will allow class action lawsuits involving plaintiffs and defendants from different states to be heard in federal courts. It also limits attorneys’ fees in coupon settlements.

“The class action system has been broken for years,” said Shea. “Trial lawyers were reaping million and millions in legal fees while consumers were often left with nothing but paltry coupons. Enactment of this legislation will end this trial lawyer bonanza.”

The legislation may be flawed, however. “At a time when federal courts are already overburdened, it will make case backlogs even longer,” wrote Lorraine Woellert in the Feb. 7 issue of BusinessWeek.

She said there is a lot to like about the Class Action Fairness Act. “But any tort reform that calls for piling more work on the federal judges without giving them the ability to handle it barely deserves to be called a reform at all.”

On the horizon: TIRE AGING

One issue not yet on a legislative agenda involves tire aging. However, the issue has been receiving increasing publicity from the major television networks, including CBS (The Early Show) and ABC and Fox affiliates.

TIA says it is moving ahead in its efforts to fight possible legislation that would force tire retailers to give buyers easy access to information about the production date of their tires.

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“TIA doesn’t support the idea of ‘born on’ or ‘expiration dates’ on tires,” says Becky MacDicken, TIA’s director of government affairs. She cites the following reasons:

* “The date of the tire’s manufacture is already on the sidewall as part of the tire identification number.”

* “There are greater safety concerns to worry about,” including air pressure maintenance.

* Expiration dates “could lead to unnecessary tire scrappage” and cause inventory problems “as consumers could request newer tires.”

Senator Mike DeWine (R-Ohio) introduced a tire aging bill as part of his transportation bill in January 2004. His proposal had originally included a mandate on tire dealers to provide the date of manufacture of each tire sold to the customer at the point-of-sale. He also requested a study from the National Academy of Science on tire aging.

TIA argued that the mandate on dealers was premature without a study being completed. DeWine eventually amended the bill by removing the tire-related language.

In 2003, Safety Research & Strategies Inc. filed a Petition for Rulemaking in asking the National Highway Traffic Safety Administration (NHTSA) to help consumers determine the age of their tires. The research and development firm would like to set a firm six-year expiration date on tires. A response from NHTSA is expected later this year.

MacDicken says TIA is working with NHTSA on tire aging. She says it will be “the number one issue for our industry in the coming years.”

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