capital report: april 30, 2019

California Requesting Feedback on Brake Pad Law Extension Process

The California Department of Toxic Substances Control (DTSC) has launched a survey targeted at manufacturers who plan to apply for an extension when complying with the state’s brake pad law.

The issue dates back to 2010 when Governor Schwarzenegger signed legislation prohibiting the sale of brake pads containing certain amounts of copper, heavy metals and asbestos. As of 2014, brake pads containing more than trace amounts of heavy metals and asbestos are banned. By 2021, brakes cannot contain more than 5% copper and by 2025, that amount of copper must be no more than 0.5%. Under the law, a manufacturer/importer can only apply for a one-, two- or three-year exemption from the 0.5% copper requirement if the company can demonstrate that a safe and available alternative does not exist.

Per the DTSC, the survey is intended to gauge the extent to which manufacturers will be filing extension applications.

Questions? Contact Aaron Lowe.

Respond to the survey: https://www.surveymonkey.com/r/77QVF5K

Domestic Parts Industry Would Grow Under USMCA, says International Trade Commission

The U.S. International Trade Commission (USITC), an independent agency that provides trade expertise to Congress and the administration, released a report last week highlighting the long-term effects of the U.S.-Mexico-Canada Agreement (USMCA). According to the USITC, despite an expected 140,000 drop in annual car sales due to new rules of origin and increased prices, the USCMA would increase U.S. GDP by 0.35% and create 176,000 jobs once the agreement is fully implemented. While the USITC expects the overall effects of the USMCA to be modest, trade between the three countries would increase. USITC further estimates that U.S. manufacturing would increase slightly as would exports to Mexico and Canada.

Last November, Auto Care Association Bill Hanvey testified before the USITC on impacts of the USMCA.

Read the full report: https://www.usitc.gov/publications/332/pub4889.pdf

ACPAC Update: Cocktails and Coffee

As of April 29, ACPAC has raised $124,209 from 174 donors representing 98 Auto Care Association member companies. With a year-end goal of $350,000, the ACPAC Committee will be meeting next week at Spring Leadership Days to discuss the rest of the year’s fundraising efforts, including efforts to secure more company campaigns. The ACPAC Committee will also discuss the disbursement of campaign dollars to members of Congress who are supportive of Auto Care’s policy priorities.

ACPAC will also take the opportunity to thank its donors at Spring Leadership Days with different event opportunities and recognition. If you are a member of ACPAC, please join us at the evening reception next Wednesday, May 7 for Cuba Libre cocktails and a full bar. ACPAC will also be sponsoring an all-day coffee cart on Thursday, May 8, where members can receive specialty coffee drinks as a thank you for making a 2019 contribution.

ACPAC continues to be a cornerstone of Auto Care’s advocacy efforts. When the dollars of Auto Care members are pooled together, the industry is able to maintain a presence on Capitol Hill and educate members of Congress on the issues affecting the aftermarket. Participation is voluntary, but if you would like to learn more about how you can participate, please contact Hailey Ray or visit our advocacy website at www.autocare.org/advocacy.  

State Legislative Update

The 2019 state legislative session is in full swing as the government affairs team has reviewed more than 3,000 pieces of legislation this year. We are currently tracking or monitoring more than 90 bills that could have an impact on the way Auto Care members do business. This month saw the conclusion of many states legislative sessions (AL, GA, ID, IN, IA, KY, MD, MS, MT, NM, ND, SD, UT, VA, WA, WV, WY), with many others set to conclude in May. As expected, we are seeing a slew of original equipment (OE) collision repair procedure bills due to the $42 million verdict awarded to the family trapped in their vehicle as a result of a claim of shoddy repair work by a collision repair facility. Auto Care strenuously supports strong safety standards in all repair work, but these proposals must not include any prohibitions, disclaimers or outright bans on the use of aftermarket parts. While there has been some language in a few states to exempt parts from these proposals, there was not enough time to review these proposals. Many of these bills have become de facto aftermarket parts ban bills and we will continue to resist any legislative attempts to unfairly disparage an industry that generates $381 billion in annual sales and employs 4.6 million people.

Additionally, we have seen multiple inspection bills, Right to Repair and insurance bills. You can review the below list of priority bills that we are tracking this session. For more information or to get involved at the state level, please contact Tom Tucker.

 

California – Assembly Bill 142 | This bill would increase the amount of the manufacturer lead-acid battery fee to $2 and enable the fee to continue indefinitely.

  • Position: Oppose
  • Status: The bill passed the Environmental Safety and Toxic Materials Committee and was sent to the Appropriations Committee for fiscal review.

Hawaii – Senate Resolution 14 | This bill would require the Hawaii Legislative Reference Bureau to conduct a study on the necessity of vehicle safety inspections in Hawaii.

  • Position: Support
  • Status: Bill adopted.

Hawaii – Senate Bill 823 | This bill would require insurers to provide the consumer a choice of OEM crash parts or aftermarket crash parts. If the consumer chooses the OEM part, the consumer shall not be required to pay the additional cost for repairs using that OEM part.

  • Position: Oppose
  • Status: Bill was sent to conference committee, but it is unlikely to come before such a committee.

Illinois – Senate Bill 2104 | This bill would require that no vehicle repair facility or installer may use repair specifications or procedures that are not in compliance with the OEM for those parts. Further, no estimate may include the use of non‐OEM aftermarket crash parts unless authorized by the customer in writing.

  • Position: Oppose
  • Status: Bill passed the Senate and is awaiting a hearing in the House. 

Massachusetts – Senate Bill 132 | This bill would prohibit an insurer from mandating non-OEM parts on any vehicle still under manufacturer warranty or lease.

  • Position: Oppose
  • Status: No action has been scheduled.

Missouri – House Bill 451 | This bill would repeal the requirement that all vehicles must obtain a vehicle safety inspection in order to be licensed.

  • Position: Oppose
  • Status: Bill was amended to allow for vehicles having less than 150,000 miles for the 10-year period following their model year of manufacture to be subject to inspections. Bill passed House and moved to the Senate, but no hearing date has been set. The session ends in 31 days.

New Hampshire – House Bill 664 | This bill would require an insurer to reimburse an automobile repairer for all repairs if the repairer follows OEM-recommended collision repair procedures.

  • Position: Oppose
  • Status: Amendments exempting certain parts were adopted and the bill passed the House; awaiting a vote in the Senate.
 

New Jersey – Senate Bill 1712 | This bill would require vehicle manufacturers to provide notice to new vehicle purchases or leases of their rights under the Magnuson-Moss Warranty Act.

  • Position: Support
  • Status: Committee passed unanimously; awaiting vote by the full Senate. Assembly companion bill introduced as A-5225.

New York – Assembly Bill 3872 | This bill would require only new OEM replacement crash parts may be used on any vehicle during the year of manufacture and for the two succeeding years thereafter.

  • Position: Oppose
  • Status: No action has been scheduled.

New York – Assembly Bill 6589 | This bill establishes the Right to Repair Act to protect the rights of consumers to diagnose, service, maintain and repair motor vehicles; requires OEMs to make equipment available to independent repair providers under fair and reasonable terms.

  • Position: Oppose in accordance with the national Right to Repair MOU.
  • Status: No action has been scheduled. 

New York – Assembly Bill 2911 | This bill would prohibit insurers from limiting payment on claims for damage to motor vehicles based on pricing caps for labor, parts, paint or repair materials; prohibits insurers from recommending a repair facility.

  • Position: Oppose
  • Status: No action has been scheduled.

Oregon – House Bill 3190 | This bill requires vehicle manufacturers to make available to owner of vehicle or independent repair provider on fair and reasonable terms any part, tool, service manual or other device, implement or information that vehicle manufacturer makes available to authorized repair provider for purpose of diagnosing, maintaining or repairing a vehicle that vehicle manufacturer makes or supplies.

  • Position: Oppose in accordance with the national Right to Repair MOU.
  • Status: No action has been scheduled.

Texas – House Bill 1348 | This bill would require numerous restrictions related to alternative parts including price‐based prohibition of least expensive parts. It includes a requirement for OEM specifications and mandates the use of OE repair procedures.

  • Position: Oppose
  • Status: Bill was amended, but amendments did not satisfy concerns of industry. It passed the Insurance Committee and is awaiting a floor vote in the Calendars Committee. 

Texas – House Bill 2696 | This bill would eliminate the regular mandatory vehicle safety inspections for noncommercial vehicles.

  • Position: Oppose
  • Status: Bill left in committee.

Questions? Contact Tom Tucker.  

Get the Latest Coverage of the 2020 Elections

Thanks to support from the Auto Care Political Action Committee (ACPAC), we are pleased to bring Capital Report readers the latest Inside Elections with Nathan Gonzalez, a bi-monthly nonpartisan analysis of U.S. elections.

Read the latest issue: https://www.autocare.org/Government-Affairs/Capital-Report/Election-Updates/inside-elections-041919/
 

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