- capital report: july 3, 2018
capital report: july 3, 2018
Auto Care Warns
Administration of Job Losses and Rising Costs Due to Auto Tariffs
Last Friday, June 29, the Auto Care Association submitted comments
to the U.S. Department of Commerce regarding the Section 232 National Security Investigation of Imports of Automobiles,
Including Cars, SUVs, Vans and Light Trucks, and Automotive Parts, urging
the Trump administration to consider the severity of unintended consequences
should these tariffs go into effect.
The association stated: “The availability of affordable
high-quality parts from foreign sources creates thousands of jobs that might be
threatened should the Trump administration move forward with a tariff on
vehicles and vehicle parts.”
Included in the comments was a recent economic study
completed for the Auto Care Association by John Dunham and Associates, which
found that a 25 percent tariff on imported auto parts could cause a reduction
of 17,800 jobs in the auto manufacturing sector, resulting in $1.4 billion in
lost wages. The study further predicts that 6,800 jobs would be lost by vehicle
repair shops and an additional 85,200 jobs in the auto care wholesale and retail
segment due to lower demand.
The study also found that imposing additional tariffs on
auto parts and components would increase their price substantially, making it
more difficult for working Americans to afford a new car or the cost of
repairing the vehicle they currently own. The study estimates that the cost of
car ownership will increase by more than $700 per year per household should the
tariffs be imposed.
Trump said over the weekend that he expected this
investigation to be wrapped up in three to four weeks. Written comments were
due Friday but there is also a public hearing scheduled for July 19-20.
Auto Care’s comments.
Rhode Island Legislature Sends Bill Restricting Aftermarket Parts to Governor
The Rhode Island legislature
recently passed legislation (House Bill 8013/Senate Bill 2679) restricting the use of aftermarket parts. The governor now has final
say over whether it will become law.
extends the restriction on the use of aftermarket parts from 30 months to 48
months after initial purchase, expands this restriction from crash parts to include
all parts damaged in a collision, and requires that all repairs must be completed
using the procedures and recommendations of the vehicle manufacturers.
Rhode Island is
already one of five states that has a restriction on the use of aftermarket
parts. However, should the governor sign this legislation, the state would have
imposed the most restrictive laws impacting the use of aftermarket parts in insurance
related repairs. While consumers can request aftermarket parts on repairs, they
must do so in writing – a requirement that implies that the use of aftermarket
parts are inferior to original equipment parts.
The governor has 10 days
to sign, veto or allow the bill to take effect without her signature. Auto Care
urges members with operations in the state to contact the governor’s office and
urge a veto of this bill. Contact information is below:
Data Privacy Bill Passes California Legislature
Last Thursday, June
28, the California legislature passed and the governor signed Assembly Bill 375
(AB 375), which creates the California Consumer Privacy Act of
2018. Effective Jan. 1, 2020, this legislation provides consumers with various
rights with respect to their personal information collected by businesses,
specifically the right to access it, the right to delete it, the right to know
what information/categories of information are collected, the right to know
whether that information is being sold or shared, the right to stop a business
from selling that info, and the right to equal service and price.
The law also contains a private right of action for data
breaches and gives enforcement and regulatory powers to the state attorney
general. Although AB 375 is onerous and opposed by the business community,
it is a preferable alternative to a proposed ballot initiative, which would
have been incredibly costly and difficult to defeat. Further, AB 375 can be
amended in the future by a simple majority vote of the Legislature rather than by
another ballot measure should changes to the law become necessary.
AB 375 affects any business with gross annual revenues over
$25 million that collects consumers’ personal information. Compliance will
limitations on what information can be collected, shared and sold. Although
the damages for violations are significantly less than what was included in the
ballot initiative, businesses will still be subject to $100-$750 in damages per
consumer per incident; to injunctive or declaratory relief; or to any other relief
the court deems appropriate. The attorney general will be responsible for
enforcement, including determining whether an action can proceed. Businesses
will be able to seek guidance from the attorney general on compliance with the
bill and the attorney general will solicit feedback and public participation by
2020 to adopt related regulations.
the full legislation.
Supreme Court Nixes
Union Dues for Nonmembers
The U.S. Supreme Court ruled last week that nonunion public
employees do not have to pay collective bargaining fees, stating that such requirements
violate the First Amendment. In a
with the opinion written by Justice Samuel Alito, the court’s conservative
majority ruled that forced collection of agency fees “violates the free speech rights
of nonmembers by compelling them to subsidize private speech on matters of
substantial public concern.”
The court’s interpretation is that the system must be
opt-in, not opt-out, holding that “neither
an agency fee nor any other payment to the union may be deducted from a nonmember’s
wages, nor may any other attempt be made to collect such a payment, unless the
employee affirmatively consents to pay.”
The case is the result of a challenge to the 1977 decision in
Abood v. Detroit Board of Education, which upheld a union’s ability to
compel nonunion employees to pay collective bargaining costs, sometimes
referred to as “fair share” or “agency” fees, as long as they “are used to
finance expenditures by the union for collective bargaining, contract
administration and grievance adjustment purposes.” The only stipulation in that
decision was that that unions cannot charge nonunion employees for political or
other ideological activities.
In overruling Abood,
the court stated that “Abood was poorly reasoned… has led to practical
problems and abuse… [and] is inconsistent with other First Amendment cases and
[does not] justify the perpetuation of the free speech violations that Abood
has countenanced for the past 41 years.”
Supreme Court Closes
Internet Sales Tax Loophole
In a victory for brick-and-mortar businesses, the U.S.
Supreme Court ruled last month that states can require internet retailers to
collect sales tax on purchases made online, even if that retailer does not have
a physical presence in that particular state. This decision
overturned the court’s previous ruling from 1992, Quill Corporation v. North Dakota, which declared that states could
not force retailers to collect sales tax if that retailer did not have a
substantial connection to that state. This loophole will now go away as
companies conducting e-commerce must comply with each state’s tax rules and
charge customers the appropriate sales tax at checkout.
The retail community had been working with Congress for
years on a legislative solution; however, progress had been slow with members
of Congress seemingly split on the issue. The Auto Care Association had supported
past efforts to close this loophole and welcomes this decision by the court.
Auto Care was mentioned in Forbes article, which provides
further detail on
Auto Care’s statement.
Auto Care Releases Prop
The Auto Care
Association has launched a member-only toolkit available to help auto care
businesses navigate California’s Prop 65. The toolkit includes a recent webinar
recording and accompanying slide deck, Prop 65 chemical list and Prop 65 FAQs.
Access the toolkit.
Last Chance: Take our Advocacy Survey
What is the most
important issue facing the auto care industry? Are you familiar with the
association’s policy positions? Do you personally get involved in the political
process? Please help the association effectively plan for future public policy
discussions by completing our annual Advocacy Survey.