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  Taking The Hill
Posted 4/1/2009
By Clarence Mills

Iowa Representatives Consider California Emissions Standards

Iowa State Rep. Nathan Reichert has introduced House Bill 422, which establishes motor vehicle emissions standards for passenger cars, light-duty trucks and medium-duty passenger vehicles for model years beginning with the model year 2011.

H.B. 422 is based on, and similar to, the California motor vehicle emissions standards and is consistent with federal law.

The Iowa Environmental Protection Commission may decline or adopt all or part of the California motor vehicle emissions standards. It will only do this based on substantial evidence - and after a public hearing - that the emissions standards and a compliance program similar to that of the state of California will not achieve, in the aggregate, greater motor vehicle pollution reductions than the federal standards and compliance program for any such model year. The Automotive Service Association has opposed new emissions standards that also include super warranties for some vehicles.

U.S. Senate Judiciary Committee Holds Patent Reform Hearing

he U.S. Senate Judiciary Committee held a hearing March 10 on "Patent Reform in the 111th Congress: Legislation and Recent Court Decisions." The hearing focused on the importance of intellectual property to the economy and on Senate Bill 515, the Patent Reform Act of 2009.

Sen. Patrick Leahy, D-Vt., committee chairman, opened the hearing with these comments: "Intellectual property is critical to our nation's economy. It is an engine that drives our contemporary economy and will fuel our future."

Leahy said the input of labor unions, small inventors and manufacturers helped shape Senate Bill 515. The bill will improve the quality of patents and remove the ambiguity from the process of litigating patent claims.

Witnesses testified with many suggestions for the Patent Reform Act of 2009. Of particular interest to automotive repairers were comments made by Herbert Wamsley, executive director of the Intellectual Property Owners Association. Wamsley emphasized the role of intellectual property in the automotive industry.

Colorado to Discuss Taxing Motorists Based on Miles Driven

Democratic state Sen. Suzanne Williams of Colorado plans to introduce a bill that would tax drivers by the miles that they drive.

Williams says this is a good method for gaining revenues for Colorado's highways. Lawmakers are currently looking to fund transportation in ways other than the gasoline tax.

However, this proposal was previously included in a Senate highway funding bill, but was dropped due to strong opposition from Republicans.

Missouri Senate Bill Offers Major Exemption for Vehicle Safety Inspections

ASA Urges Repairers to Send Letter in Opposition to Senate Bill 58

Missouri state Sen. Bill Stouffer has introduced legislation that would change the Missouri Vehicle Safety Inspection Program to exempt vehicles from testing for their first 10 years. Missouri Senate Bill 58, introduced Jan. 7, 2009, has been passed by the Senate and is now in the hands of the Missouri House of Representatives.

The Automotive Service Association (ASA) opposes changes proposed to the Missouri Vehicle Safety Inspection Program. These proposed changes allow a car to have 150,000 miles or more (based on the average annual mileage of 15,000) before its first vehicle safety inspection. The bill's effect would be to create less-safe highways in the state of Missouri. This could mean more accidents leading to more injuries and possibly deaths.

There has been a history of safety inspection legislation in Missouri. During the last legislative session, Missouri Rep. Jason Brown introduced House Bill 1486 that would have exempted vehicles from testing for their first six years. Prior to this, Missouri Sen. Charlie Shields offered Senate Bill 17 that would have abolished the state's inspection program, excluding the St. Louis metropolitan area and school buses.

ASA asks Missouri repairers to contact their state representative and express their opposition to S.B. 58.

To view the text of this legislation and to send a pre-written letter in opposition to S.B. 58, visit ASA's legislative Web site at www.TakingTheHill.com. Click on the "Legislative Alert Center" tab.

Washington State Legislation Would Harm Association Health Plans

Oppose House Bill 1714

The Automotive Service Association (ASA) is urging automotive repairers in the state of Washington to contact their state legislators in opposition to House Bill 1714, concerning association health plans (AHPs).

On Jan. 27, 2009, Washington state Rep. Eileen Cody introduced two pieces of legislation that could be harmful to state association health plans. The automotive repair industry, like other small businesses, is suffering through these economic times. These bills would place a significant burden on the small-business community and its efforts to reduce costs.

The first piece of legislation, House Bill 1712, would have required that the entire group of participating employers be treated as one employer, essentially establishing one rate for all employers. H.B. 1712 died in a hearing held Feb. 6, 2009, by the House Health Care and Wellness Committee.

However, Cody's second piece of legislation - House Bill 1714 - was passed to the Rules Committee for a second reading. This bill would require association health plans to use small-group community rating rules in establishing rates for participating employers.

Health underwriting and the individual experience of each employer would be placed in jeopardy with this legislation. This "community rating" would increase the costs to employers participating in AHPs. Association health plans, under this proposal, would eventually become noncompetitive with the insurance companies' own small-group rates.

A letter has been posted on ASA's legislative Web site for the convenience of repairers who want to contact their state legislators.

House Consumer Protection Subcommittee Discusses Options for Consumer Protection in Used, Subprime Car Market

ASA Joins Coalition in Advocating Legislation for Total-Loss Data

The U.S. House of Representatives Committee on Energy and Commerce's Subcommittee on Consumer, Trade and Consumer Protection held a hearing March 5, 2009, to discuss "Consumer Protection in the Used and Subprime Car Market."

The Honorable Bobby L. Rush, D-Ill., chairman, said in his opening remarks, "While the mortgage and home foreclosure crisis has garnered much deserved attention in Congress and in the media, there has been much less focus on similar problems in the purchase of automobiles ... Evidence suggests that fraudulent practices with regard to both the condition and financing of used cars are on the rise. When it comes to the condition of vehicles, consumers are too often unaware of previous damage inflicted on the vehicle."

Rush specifically mentioned abusive financing schemes and frauds related to the purchase of automobiles and described the National Motor Vehicle Title Information System (NMVTIS), which he said, "will eventually be a very valuable tool to aid consumers in obtaining information about the condition of their vehicles by establishing a database in which states and other stakeholders share their title information."

Witnesses Eileen Harrington, acting director, Bureau of Consumer Protection, Federal Trade Commission (FTC); James H. Burch II, acting director, Bureau of Justice Assistance, Department of Justice; Rosemary Shahan, president, Consumers for Automobile Reliability and Safety; and John W. Van Alst, staff attorney, National Consumer Law Center, testified in support of improving information accessibility and efficiency dealing with automobile titles.

Harrington discussed the FTC's request for public comments on the effectiveness and impact of the Used Motor Vehicle Trade Regulation Rule (Used Car Rule). The Used Car Rule requires used car dealers to disclose on a window sticker (the Buyers Guide) whether they are offering a dealer warranty, and if so, its basic terms and conditions. Harrington said the results showed that the majority of those surveyed find the Used Car Rule useful as is, while others suggest minor changes to the existing rule.

The FTC believes that an online database such as the NMVTIS is useful, but worries that the "digital divide" - those with convenient access to the Internet vs. those with limited or no access - will perpetuate any potential challenges of the used car market for lower-income families.

The Automotive Service Association (ASA), as a member of the Salvage Auto Fraud Reform (SAFR) Coalition, sent a letter to the members of the U.S. House of Representatives and the U.S. Senate advocating that the current system for tracking totaled vehicles is untimely, incomplete and inconvenient for the public to access. The letter states, "Progress with the National Motor Vehicle Titling Information System (NMVTIS) database for identifying totaled vehicles is a valuable first step, but must be supplemented with more modern technology from the private sector to provide increased transparency for used car buyers."

The letter asks members of Congress to support committee consideration of the bipartisan legislation that has recently been introduced providing used car buyers an important tool for making better decisions about vehicle safety and fair market value.

ASA supports legislation that requires insurers to make additional total-loss data available to the public, thereby "red-flagging" the vehicle forever, and putting consumers on notice of a vehicle's serious damage history.

To review testimony from the hearing, visit ASA's legislative Web site, www.TakingTheHill.com.

U.S. Senate Banking Committee Reviews Modernizing Insurance Regulation

Senators Indicate Interest in Federal Regulation of Insurance

The U.S. Senate Committee on Banking, Housing and Urban Affairs held a hearing on "Perspectives on Modernizing Insurance Regulation." Sen. Christopher J. Dodd, D-Conn., chairman of the committee, deemed the insurance industry as a "vital component of the economy." Further, Dodd recognized that the insurance industry is primarily regulated at a state level, but as it becomes increasingly national and international, the industry needs to be modernized accordingly. Sen. Richard Shelby, R-Ala., ranking member of the committee, raised concerns about the adequacy of state regulation of insurance.

The witnesses were Michael McRaith, director, Illinois Department of Financial and Professional Regulation, on behalf of the National Association of Insurance Commissioners; The Hon. Frank Keating, president and chief executive officer, the American Council of Life Insurers; William R. Berkley, chairman and chief executive officer, W.R. Berkley Corporation, on behalf of the American Insurance Association; Spencer Houldin, president, Ericson Insurance Services, on behalf of the Independent Insurance Agents and Brokers of America; John Hill, president and chief operating officer, Magna Carta Companies, on behalf of the National Association of Mutual Insurance Companies; Frank Nutter, president, the Reinsurance Association of America; and Robert Hunter, director of insurance, the Consumer Federation of America.

Berkley, chairman of the American Insurance Association, addressed the regulation of property and casualty insurance:

"1. Property-casualty insurance is critical to our economy, but it does not pose the same types of systemic risk challenges as most other financial services sectors.

"2. Nonetheless, because property-casualty insurance is so essential to the functioning of the economy and is especially critical in times of crisis and catastrophe, functional federal insurance regulation will enhance the industry's effectiveness and thus should be included as part of any well-constructed federal program to analyze, manage and minimize systemic risk.

"3. Given the national and global nature of risk assumed by property and casualty insurers, establishment of an independent federal insurance regulator is the only effective way of including property-casualty insurance in such a program."

Robert Hunter, director of insurance for the Consumer Federation of America, emphasized that "Repeal of the antitrust exemption in the McCarran-Ferguson Act must be a part of any efforts by Congress to reform insurance regulation. Collusion in the pricing of property/casualty insurance should not be allowed in the 21st century."

The Automotive Service Association supports the federal regulation of property and casualty insurance.

To view the testimony from this hearing, visit ASA's legislative Web site at www.TakingTheHill.com.

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