OJANUARY 2010

O adaNews
JANUARY 2010
a publication of the Ohio Automobile Dealers Association
Changes Coming on BWC Payroll Report and Premium
Calculations for the 6 Month Period
By CCI, OADA’s Third Party Administrator for Workers’ Compensation Group Rating
Many private employers in Ohio,
especially those participating in group rating programs, will see significant rate and
premium increases calculated on their payroll
report (DP-21) form that the Ohio Bureau
of Workers Compensation (BWC) will be
sending to them in the next few weeks.
before Monday, March 1, 2010, or coverage
will lapse. A lapse in coverage exceeding 40
days will not only make an employer financially responsible for the costs of any claim
incurred during the lapse, but it would also
cause ineligibility for future group rating or
other alternative rating program discounts.
BWC mails the payroll report
forms to private, state-fund employers in late
December and late June of each year. Each
employer’s payroll report for the period ending December 31, 2009 must be submitted
with a premium payment to the BWC on or
Many of the BWC’s so called rate
reform changes will be reflected on this next
payroll report and premium calculation payable by the end of February, 2010. While
there was an overall 25% average base rate reduction for Ohio’s private employers, Group
Rated employers will not experience this base
rate reduction. In fact these employers should
be prepared to see their premiums increase by
as much as 70% for the same period from the
year prior due to BWC’s reduction in group
discounts and introduction of a group assessment.
contents
Proposed Legislation May Suspend
BWC’s Recent Changes to Rates.. 2
FTC Issues New “Optional” Model
Privacy Notice...................................... 2
Are You Ready for an IRS
Demonstrator Vehicle Audit?..............3
Ad Review Corner............................. 4
OADA Testifies in Support of
SB 213.................................................... 4
OADA Endorses Speedway
SuperAmerica LLC............................ 4
Safety Corner...................................... 5
The Clunker Auditor Cometh!....... 5
New EPA Requirements for Body
Shops 40 CFR Part 63 ......................... 6
NADA News ......................................... 7
OADA Convention............................ 8
OADA Trustee Election Results..... 9
OADA Services..................................11
Publisher: Tim Doran
Editor: Nikki Bragg
All Rights Reserved
The information provided in this newsletter is intended for general knowledge
purposes only and is not intended to be
the furnishing of legal or other professional
advice. If legal advice or other expert assistance is required, the services of appropriate
advisors should be sought.
Employers can complete their payroll report manually and submit the form with
their payment or they can report their payroll
and pay premiums online through BWC’s
website, www.ohiobwc.com. If payroll is
reported online, employers are not required
to necessarily pay premiums online. Employers can print their completed payroll report,
attach it to their check and mail both to the
BWC. Premiums can also be paid through
Quick Pay, an online feature which allows
employers to use credit cards (MasterCard,
VISA or American Express) for payment.
Employers can also authorize payments from
their checking or saving accounts. If coverage
was to lapse, the date the payment is made
online or the date BWC receives the payment
will be the date of coverage reinstatement.
Employers can also establish their own payment plan through the Flexible Payment Plan
(FlexPay). This allows employers to create
their own online quarterly or monthly pay-
www.oada.com
ment schedule.
The following points will help in
completing the payroll report accurately:
* Report payroll under the manual classification that best describes each employee’s
type of work;
* Use the BWC’s online listing of “What is
reportable payroll?” to help determine the
correct amounts to report;
* Generally, BWC considers gross hourly
wages and salaries, overtime pay, sick pay,
bonus payments, sales commissions, tips,
severance pay, shift or holiday differential
pay, voluntary employee contributions to
retirement plans (401K), and payments to
casual / spot labor as reportable payroll.
* Active officers of a corporation, sole proprietors, partners and individuals incorporated (with no employees) are subject to
minimum and maximum payroll reporting
requirements. For the reporting period
ending December 31, 2009, the minimum
required is $384 per person per week and
the maximum is $1,151.
* Payroll reporting limits exist for employers using manual classifications in the
construction industry (BWC Industry
Group 4). For the reporting period ending December 31, 2009, the reportable
payroll for construction employees is not
to exceed $1,151 per person per week.
In today’s economic climate, you
also need to be aware of BWC’s 50/50 Payment Plan Option. Under this option, the
employer can pay 50% of their full premium
by the end of February, 2010 and the remaining 50% balance a few months later. There
is no financial penalty or interest charged by
BWC fore using this option.
If you have questions concerning
your payroll report, contact Kirsten Gibson at
800-837-3200, ext. 7110 or 614-526-7110. <
january 2010
1
Proposed Legislation May Suspend the BWC’s Recent
Changes to Rates and Rate Discounts
By: Nicole H. Farley, Esq., Millisor & Nobil Co., LPA
Legislation introduced in the Ohio
General Assembly in mid-November would
require the Bureau of Workers’ Compensation (BWC) to suspend rate calculation
changes for a period of two years beginning July 1, 2010, and to further study the
premium rating system. Senate Bill 213
would prohibit the BWC from making or
approving any changes to the group rating
period for the two-year period. Senate Bill
213 sponsor, Senator Keith Faber (R-Celina)
believes the legislation would prevent “rate
shock” on Ohio’s small businesses from
the expected increased premium payments.
Proponents of Senate Bill 213 note the bill
calls for a two-year “time-out” on premium
increases, which they believe will provide
businesses with some relief during the current economic downturn as well as provide
additional time for state lawmakers to look
into a better approach.
At the present, the BWC intends
to move forward with its plans to reduce
the level of discounts long-afforded to businesses participating in Ohio’s group rating
program. This would include lowering the
discount for employers in group rating from
77 percent to 65 percent and applying a significant surcharge (also referred to as “breakeven factor”) to all group employers thereby
reducing the maximum discount to around
51 percent. In addition, the BWC plans to
eliminate the $15K medical only program;
handicap reimbursement program and 90day independent examination requirement.
At present, Senate Bill 213 remains
in the Senate Insurance Committee and its
future is uncertain. It is likely the bill will
not progress further than the Committee.
As such, Ohio businesses should expect the
BWC rate reform measures in 2010.
For those companies who are
paying higher premiums because of lower
group discounts or who have been paying
high premiums because they are no longer
group eligible, there is only one approach to
the continuing rise in workers’ compensation
costs – aggressive claims management.
If you have any questions about
the proposed legislation, or for more information on how your company can reduce
your workers’ compensation costs through
aggressive claims management, contact
Nikki Farley, Dan O’Brien or Mike Reidy
in Millisor + Nobil’s workers’ compensation
department at 1-800-800-8806. <
FTC Issues New “Optional” Model Privacy Notice
Contributed by Paul Metry, NADA
The FTC and the federal banking
agencies have amended the Privacy Rule
to include a new model privacy notice that
dealers and other financial institutions may
use to describe their privacy policies to their
finance and lease customers. Dealers who
adopt the model notice consistent with its
instructions will receive safe harbor protection for the language used in the notice
beginning December 31, 2009. Dealers who
continue to provide their finance and lease
customers with a privacy notice that uses
language from the sample clauses contained
in Appendix A to the text of the original
Privacy Rule (which required compliance by
July 1, 2001) will lose safe harbor protection
for the language used in those notices after
December 31, 2010. Accordingly, dealers
should consider transitioning to the new
model notice before the end of 2010.
The new model notice stems from
section 728 of the Financial Services Regulatory Relief Act of 2006, which directs the
FTC and the federal banking agencies to
jointly develop an optional model form for
2
january 2010
financial institutions to make the required
Privacy Rule disclosures and to have the
form serve as a safe harbor for financial
institutions that elect to use it. The purpose
of the law is to promote the use of a more
understandable privacy notice that enables
consumers to more easily compare the privacy practices of different financial institutions. The form accomplishes this in part by
setting forth various types of information
sharing with adjacent columns for the financial institution to indicate whether it engages
in such sharing and whether the consumer
has the right to limit such sharing. The development of the final model notice follows
extensive consumer testing and the agencies’
review of numerous public comments.The
agencies’ adopted several recommendations
contained in NADA’s comments, such as
allowing financial institutions to include an
Acknowledgment of Receipt on the form for
consumers to sign without losing the model
notice’s safe harbor protection (see Footnote
14 in the Supplementary Information to the
Final Rule).
ohio automobile dealers association
There are a number of detailed rules
that users of the new model privacy notice
must follow. NADA will explain these rules
in greater detail and provide a recap of the
Privacy Rule (which involves many compliance considerations beyond the language
used in the privacy notice) in an educational
guide that will be sent to NADA members
in advance of the December 31, 2010 safe
harbor expiration date that applies to privacy
notices using language from the sample
clauses contained in the original Privacy
Rule.
The final rule containing the
new model privacy notice is available at
http://edocket.access.gpo.gov/2009/pdf/
E9-27882.pdf (the amendments to the FTC
Privacy Rule begin on page 62,965). For a
refresher on the Privacy Rule’s application
to franchised dealers, see www.ftc.gov/bcp/
edu/pubs/business/autos/bus64.pdf. <
Are You Ready for an IRS Demonstrator Vehicle Audit?
By Stephen Bedell, CPA, and Joseph Magyar, CPA of Crowe Horwath LLP
For many years, automobile dealerships have allowed their employees to use
their vehicles for personal reasons. The value
of using these vehicles, known as demonstrators or demos, is subject to federal employment taxes.
Even though the last significant
update from the IRS regarding demos was
in 2001, IRS audits continue to focus on the
proper valuing and reporting of their use. Considering that an IRS assessment for improper
reporting of demo use can be devastating – it
is likely to include FICA taxes, income tax
withholding, penalties, and interest – the
importance of every dealership being in line
with the requirements is clear.
Four Options
A dealership has four main methods
to choose from for determining the taxable use
value of a demo. The first two options apply
only to full-time salespeople – defined as an
employee who works 1,000 or more hours
a year and spends at least half of a normal
business day performing the duties of a floor
salesperson working directly with clients and
sales promotion. At least 25 percent of the
employee’s compensation must be from sales
activities with customers. Under IRS rules,
finance and insurance (F&I) managers qualify
as full-time salespeople only if the dealership
can show they are integral to the sale of the
vehicle and not just F&I products.
1. Full exclusion method. For a full-time
salesperson’s demo use to be fully excluded from taxation, the employee must
maintain a mileage log and is limited to
commuting miles plus an additional 10
personal miles a day. In addition, the
dealership must have in place a written
policy that outlines the limits of nonwork-related demo usage and states that
the vehicle must be available for test
drives whenever the salesperson is at the
dealership. Additional restrictions apply.
The limited personal use and daily log
requirements are likely to make full exclusion an impractical method.
2. Partial exclusion method. The partial exclusion method is probably more viable
and realistic for the full-time salesperson
than the full exclusion method. To use
the partial exclusion method, a written
policy similar to that described for the full
exclusion method must be in place. Using
the partial exclusion method requires no
limit on personal mileage and no mileage
log, but additional restrictions apply. An
additional benefit with this method is that
the taxable value of the demo may be
determined based on the average selling
price of vehicles the dealership sold the
prior year rather than the actual value of
the vehicle used by the salesperson. Based
on an IRS-provided chart, this average
price determines the daily income factor for the demo use. If the average sale
price of the vehicles is less than $30,000,
for example, then the daily taxable value
would be $6 or less.
3. Full inclusion method. All dealership employees are eligible for the full inclusion
method, which does not require the dealership to have a written policy in place.
This method does not limit personal use
of the vehicle, but neither does it provide
a reduction in taxable income for business
use. However, the demo must be available
for test drives when the employee is at the
dealership. The taxable value of demo use
for this method can also be determined
by the average selling price of vehicles
sold by the dealership in the prior year.
There is a different IRS-provided chart
that uses this average price to determine
the daily income factor for the use. If the
average sale price of the vehicles is less
than $25,000, then the daily taxable value
would be $18 or less.
4. Annual lease value method. The annual
lease value method applies to all employees of the dealership and does not require
that a written policy be in place. This
method allows a deduction from taxable
income for business use, but the employee
must maintain a mileage log to qualify.
The taxable value of demo use is based
on the cost of the actual demo or demos
used by the employee, as converted based
on the IRS Annual Lease Value Table.
For an employee who is not a salesperson, the full inclusion method is likely to
be the best option if the average value of the
vehicles sold in the prior year is less than the
value of the demo the employee is using. Also,
if the employee has very little business-related
mileage, using the annual lease value method
www.oada.com
would provide little reduction in value and
would require keeping a log. However, if the
value of the employee’s demo is less than
the prior year’s average sales price or if the
employee uses the demo for business enough
to reduce its taxable value, then the annual
lease method might be a better choice.
Proper Implementation Is the Best Defense
Several points are important for
dealers to keep in mind. First, all taxable
amounts need to be reduced by any payments
employees make for using demos. In addition, proper and detailed recordkeeping is
a must in the area of policy agreements and
logs. Improperly kept records could disallow
otherwise beneficial reductions in reported
values. And, finally, the IRS permits dealerships to select a different method of demo
value determination each month and to make
corrections annually.
Although the rules have been in
place for years, it is important for dealerships
to confirm that their reporting related to demos
is in line with IRS requirements. The IRS
has clearly outlined its prescribed methods,
expects dealerships to comply, and continues
to audit dealerships to ensure they do. The best
course of action for any dealership is to stay
ahead of the game by having a well-thoughtout demonstrator plan firmly in place. Please
refer to IRS Revenue Procedure 2001-56 for
complete details and requirements.
Stephen Bedell is with Crowe Horwath LLP in the Columbus, Ohio, office. He
can be reached at 614.365.2213 or stephen.
[email protected]. Joseph Magyar
is a partner with Crowe Horwath LLP in the
Tampa, Florida, office. He can be reached at
813.209.2435 or joe.magyar@crowehorwath.
com.
Under U.S. Treasury rules issued in
2005, we must inform you that any advice in this
communication to you was not intended or written to be used, and cannot be used, to avoid any
government penalties that may be imposed on a
taxpayer.
Crowe Horwath LLP is a member of
Crowe Horwath International, a Swiss association.
Each member firm of Crowe Horwath International
is a separate and independent legal entity. © 2009
Crowe Horwath LLP <
january 2010
3
OADA Testifies in Support of Senate
Bill 213
Bill would suspend the use of a break even factor & freeze the credibility table at 65% for two years
Revised Motor
Vehicle Advertising Guidelines
Available Now
Ohio Attorney General Richard
Cordray has recently published updated
Guidelines for Motor Vehicle Advertising. The
Guidelines provide an easy to understand explanation of the Ohio Consumer Sales Practices Act
prohibitions related to the advertisement and sale
of a motor vehicle. The Guidelines cover topics such as advertising limited rebates, internet
advertising, giveaways, prizes and other free
offers, as well as many others. Dealers should
familiarize themselves with the Guidelines and
sample advertisements included therein.
The Revised Guidelines also include a
list of items which may trigger an investigation
by the Ohio Attorney General. Those items
include:
• Unreadable print;
• Disclaimers that contradict an advertisement’s message;
• Violations related to financing and payments;
• Use of terms such as “liquidate”, “repossessed”, “specially selected” and “sold
regardless of loss or profit”, among others;
• References to the government or use of a
seal;
• Prize notifications, including free products
or instant savings scratch-offs;
• Minimum or specific amounts for tradeins;
• MSRP used either directly or indirectly in a
used vehicle advertisement
On December 8, OADA testified
before the Senate Insurance Committee in
support of S.B. 213. Introduced by Sen. Faber
(R-Celina), this bill would suspend the use of
the break even factor and restore the maximum savings available through group rating
to 65%. As you know, this past October the
BWC Board of Directors voted to reduce the
maximum discount to 51%. A copy of our
testimony is available at www.oada.com.
Just a few years ago Ohio’s safest
employers had the opportunity to earn premium rates that allowed them to only pay 5¢
on the dollar for their workers’ compensation
coverage. In 2010 the same employer, with
the same injury experience will pay 49¢ on
the dollar.
These changes have significantly
driven up costs at a critical time for Ohio’s
employers. Further compounding and frustrating employers is the fact that the financial
security of the Fund is not in doubt.
january 2010
We believe this moratorium is essential so that the system may absorb and realize
the impact of the changes that have already
been made and so that an accurate analysis
of the effects of these changes can be made
as well. We will keep you apprised of the
progress of this legislation. <
OADA Endorses Speedway
SuperAmerica LLC
OADA and Speedway SuperAmerica LLC have reached an agreement to
become the association’s newest Marketing
Partner. The program will allow all dealer
members that sign up to save 5 cents per
gallon on all fill-ups for the first 90 days
and 4 cents per gallon thereafter. All you
need to do to take advantage of this savings
is fill out the PDF below and send back to
us.
There is no monthly or annual
fee with your SuperFleet card and other
benefits include volume prompt pay discounts, weekly reports and online account
management. You can also limit the days
of the week or hours that your card can be
honored to deter misuse.
A PDF version of the Guidelines is
available for download at www.oada.com or
dealers may visit the Ohio Attorney General’s
website at Guidelines for Motor Vehicle Advertising. <
4
In our testimony we pointed out that
rate increases for group rated employers are
not the only major changes that have been
implemented within the Ohio workers’ compensation system. This system has converted
to a new reserving system (MIRA II) and
introduced several new (Deductible and Group
Retro) rating programs. Soon reserves will
be placed on medical-only claims and wage
continuation and will be doubled on claims
involving rehabilitation. It appears we may
be looking at split rating, homogeneity and
continuity in the near future. No one can say
for sure what outcomes these changes will
have on the system.
ohio automobile dealers association
This card is accepted at over 6500
locations and encompasses all Speedway,
SuperAmerica and Marathon stations. If
you are already taking advantage of this
program through someone else, give our
representative Rick Prebles a call at 513360-0999 to ensure you are coded properly
to receive all of the discounts available.
You will receive additional benefits such as
a 4% discount on all gift card or fuel card
purchases.
Signing up is simple. Download
a copy of the application on the marketing
partners page on oada.com and return to
OADA. If you have any questions regarding the program, please give Rick a call or
Dan Zinni at the OADA offices. <
Not Exactly “Driving 101” – Driving
Handicap-Altered Vehicles
safety
CONCERNS
Remember when you learned how to drive a stick shift?
It sounded easy enough, but learning to coordinate your feet and
hands took some practice.
provide training on how
to drive and maneuver
these modified vehicles.
Maybe that experience is a good metaphor for an issue
that dealerships must address more and more frequently; servicing
or otherwise handling vehicles that have had their control mechanisms altered for use by handicapped individuals. The problem
is that dealership personnel that operate these vehicles may not
be familiar with these altered controls, or not comfortable using
them. As you might imagine such a situation can have bad results.
At one dealership, for example, a porter was retrieving a service
customer’s handicap-altered van from a second level parking
garage. The porter was not familiar with the accelerator control
mechanism, lost control of the van and drove it off the second level
parking structure to the street below. Thankfully, though banged
up a bit, the porter was not seriously injured. But, the van had a
lot of damage and OSHA fined the dealership $3,000 for failing to
KPA understands
there are an increasing number of handicap altered vehicles making their way through services shops; some of which can be quite
tricky as far as the accelerator, brake and steering controls are set
up. While KPA is certainly no expert on handicapped vehicles,
we do caution that a dealership employee should not be allowed
to operate such a vehicle until he has both received training on
how to operate the altered controls and demonstrated reasonable
proficiency with them. Again, just like with a stick shift, it takes
some practice to get comfortable with the operation.
Brought to you by KPA,OADA’s Endorsed Provider of
Safety and Environmental Compliance Services
For more information concerning safety in and around the
dealership, contact Tiffany Hammer or Nick Hardesty of KPA at
(888) 662-2663. <
The Clunkers Auditor Cometh!
by Rob Cohen, Esq.
Editor’s Note – We are aware of some auditing activity in Ohio by representatives from
DOT/NHTSA. To date, these audits have
gone smoothly and we are unaware of any
major issues. It appears that the stores audited thus far have been randomly chosen. That
being said, dealers should be prepared in the
event that their store is chosen for an audit.
Dealers should consider the following:
• As is the case with anyone who presents
themselves as an agent of the government,
verify they are who they say they are.
• Dealers should review their “Cash for
Clunkers” deals now and verify that the
documentation is complete.
• Dealers should consider separating the
“Cash for Clunkers” documents from the
other sales documents in the deal jacket
(perhaps a separate folder within the
deal jacket) so that the auditor will only
receive these documents.
• Be kind, be courteous.
The following article is provided
by Rob Cohen, President of Auto Advisory
Services, specializing in providing dealers compliance solutions. Prior to joining
Auto Advisory Services, Rob represented
dealers in litigation for four years defending
consumer claims and representing licensees
before California DMV administrative hearings. He is a noted speaker and has been
published in a number of trade publications.
Rob had the opportunity to “sit in” on one of
the first DOT/NHTSA audits and we believe
his experience could be helpful for other
dealers.
On September 11, I had the opportunity to sit in on a DOT/NHTSA audit
of a Southern California dealership group.
Dealership personnel were, of course, a little
nervous but knew that they had taken great
care to adhere to all the Cash for Clunker
guidelines. I felt pretty confident that the
audit would go well considering (1) this
dealership group is very well run and (2) the
dealership personnel in charge of the CARS
program had all read Auto Advisory Services’
A Dealer’s Guide to Cash for Clunkers. Of
course, the confidence in my own publication
could have been misplaced depending upon
the outcome of the audit. But, for the sake of
building some suspense, I won’t yet divulge
the ending.
For starters, the auditor himself
was a very pleasant gentleman who was
not looking to nail anyone to the wall. He
had no axe to grind, no bone to pick and no
other relevant idioms. In fact, he seemed
very impressed with this particular dealer’s
“processes.” Of course, it certainly helped
that this dealer treated him professionally,
gave him a nice work area, and engaged him
in friendly conversation. Hint: Sometimes it
www.oada.com
really pays off to be extra nice to an auditor
from a federal agency.
My role was mostly as an observer.
Although, I stood ready to pounce at the first
sign the auditor was not intimately familiar
with the CARS regulations. After all, I have
been forced to live and breathe this stuff
for the last two months. I could hardly wait
for that auditor to say one wrong thing. If
he did, BAM! I was going to come down
on him like a ton of law books; citing the
page number, paragraph, and sentence of
the regulation that proves him wrong. Ok, I
really wouldn’t have done that. He was a lot
bigger than me and he had a very impressive
looking federal identification badge. Besides,
he was a really nice guy. But man oh man, did
I want to prove to someone that I really know
Cash for Clunkers. I mean, the program’s
over now and I have no other use for all that
knowledge.
As it turns out, maybe the auditor
wasn’t “intimately” familiar with the CARS
regulations, but he did know a lot. And, to his
credit, when he wasn’t sure about something,
he would give the dealership the benefit of the
doubt. Now that’s my kind of auditor, fair.
What exactly was this auditor looking for?
Clunker Auditor
continued on Page 9
january 2010
5
New EPA Requirements for Body Shops 40 CFR Part 63
By KPA, OADA’s Endorsed Provider of Environmental & Safety Compliance Services
Through intense pressure from litigation, on January 9, 2008, the EPA recently
accepted a new safety standard to reduce
the public’s health exposure to Hazardous
Air Pollutants (HAPs). The agency’s main
objective is to significantly lessen the amount
of HAPs released into the environment during paint stripping or surface coating operations. During such work practices, the most
dangerous chemicals, namely, methylene
chloride (MeCl), cadmium, chromium, lead,
manganese and nickel compounds, represent
significant risk to employee health if proper
engineering and administrative controls are
not in place.
Because the requirements are extensive, the EPA is allowing existing facilities
until January 9, 2011 to reach compliance.
New facilities constructed after September
17, 2007 or new equipment installed but not
yet in use prior to September 17, 2007, must
comply by January 9, 2008.
HEALTH IMPLICATIONS
Again, the EPA’s goal is to reduce
the public’s exposure of HAP’s that are generated from paint stripping and/or surface
coating operations. Overexposure to MeCl
and heavy metal compounds may include but
is not limited to:
♦ Chronic effects to the Central Nervous
System (CNS), causing headaches, dizziness, nausea, and memory loss
♦ Decreased visual, auditory, and psychomotor functions
♦ Restricted mental development, emphysema, pulmonary edema, & cancer
♦ Fatality when exposed to elevated concentrations
This regulation has been broken
down into several, easy to read, requirements
in order to comply with the standard:
Paint Areas
• All painting, paint preparation, and paint
stripping must be done in an enclosed
paint booth or filtered prep station
• This area must have a roof, 3 of the 4 sides
enclosed and have a filtered efficiency of
at least 98%. Manufacturer test data is
acceptable
• MeCl usage: due to other current EPA
6
january 2010
rules on the use of MeCl, KPA has long
established the recommendation that
products containing MeCl not be used in
facility operations. If MeCl products are
in use, the following applies:
and at least once every five years
Notification of Compliance
Notification of compliance will vary depending on whether a facility is new or existing.
• If more than one ton of MeCl is used
per year, management must develop and
implement a written MeCl minimization
plan
• A new facility must submit their notification of compliance (or target date of
compliance) no later than 180 days after
their initial set-up
• If less than one ton of MeCl is used per
year, there is no written plan required, but
the following MeCl alternatives must be
considered:
• An existing facility must submit their
notification of compliance no later than
two years from the date the rule was
implemented (January 9, 2008)
▫▫ Stripping agents that do not contain
MeCl such as formic acid, benzyl
alcohol, etc.
▫▫ Mechanical stripping
▫▫ Blasting with wet or dry media
▫▫ Thermal or cryogenic decomposition
▫▫ Intense light
• Full compliance must be met by January
9, 2011
Spray Guns
• Spray guns must be High Volume, Low
Pressure (HVLP), or electrostatic, airassisted air less, or airless spray gun
• Spray gun cleaning must be done in either
an enclosed cleaning machine, by hand if
spray guns are disassembled, or by flushing the gun with solvent without spraying
(atomization)
Training
• All employees conducting activities such
as paint stripping and or miscellaneous
surface coating operations must be properly trained and retrained. Trainings will
consist of but are not limited to:
▫▫ Surface preparation
▫▫ Spray gun set-up and operation including high transfer efficiency spraying
techniques
▫▫ Routine spray booth and filter maintenance, paint mixing, matching and
application techniques
▫▫ Resolving paint application problems
▫▫ Causes and solutions for finish defects
▫▫ Safety precautions such as respirators,
fire hazards, etc
▫▫ Environmental compliance issues
• Training can be administered through
manufacturer training, I-CAR, ASE, etc.,
or an in house training program
• This training must be completed initially
ohio automobile dealers association
Notifications are one-time unless
any of the previous information has changed.
Notification should be sent to the EPA or
state or local air pollution control agency.
Currently, KPA is communicating with the
EPA on how to accurately satisfy this requirement.
Recordkeeping
Records must be maintained for 5 years and
must be kept on site for at least 2 years:
• Painter training certification with training dates
• Documentation of filter efficiency
• Documentation from the spray gun manufacturer proving the gun is an HVLP or
otherwise permitted spray gun
• Copies of any notifications that were sent
to the appropriate agency
• Annual usage of MeCl (if applicable)
• Documentation of MeCl minimization
policies (if applicable)
Please be advised that future amendments may be included as the official compliance deadline approaches. In addition, state
or local regulations may currently exist that
are more stringent than the new rule. .
This safety update is provided by
KPA, the nationwide leader in Safety and
Compliance Programs for vehicle dealers. If
you have additional questions, please contact
Tiffany Hammer or Nick Hardesty of KPA at
(888) 662-2663. <
NADA News
A Message from Ohio NADA Director, Chuck Eddy
NADA Spearheads Effort to Obtain Floorplan Financing for
Chrysler Dealers
Congress also weighs in on floorplan financing transfer and
expiration
For several months NADA has spearheaded efforts to
help Chrysler dealers obtain permanent floorplan credit lines from
GMAC. NADA has had numerous meetings and communications
with all of the parties involved, including Chrysler Financial,
GMAC, Chrysler, and the Treasury Department.
In conjunction with Chrysler’s bankruptcy, GMAC granted
temporary “interim” floorplan financing to all Chrysler dealers who
formerly had loans with Chrysler Financial. However, this interim
financing expired in mid-November, and many Chrysler dealers
have not yet qualified for permanent floorplan lines from GMAC.
NADA has argued that without these critical loans, many Chrysler
dealerships and the thousands of jobs they provide are at risk and
that the viability of Chrysler itself could be threatened.
A letter from Rep. Candice Miller, R-Mich., co-signed by
a bipartisan group of 37 members of Congress, urged Treasury to
work with GMAC and Chrysler Financial to work out any remaining
intercreditor issues and requested that Chrysler dealers’ “interim”
floorplan financing be extended for an additional six to 12 months.
NADA Chairman John McEleney sent a similar letter to Chrysler
CEO Sergio Marchionne, urging him to take action on the issue.
NADA continues to meet with the parties involved
stressing the urgency of the need for help, and working to assist
dealers to successfully transition their floorplan credit lines.
NADA to Dealers: Urge Senators to Oppose Costly Health Care
Mandates on Small Business
Passage of health care reform remains the primary goal of
President Obama and Congressional Democrats. However, NADA
supports a much more limited and bipartisan approach to reform.
NADA is opposed to legislation that has already passed the House
of Representatives, as well as to the Senate version of the bill
currently under debate.
“The burdensome employer mandates and the fact that both
the House and Senate bills fail to address the fundamental problem
of the exploding cost of health insurance makes these bills onerous
to dealers,” says David Westcott, chairman of NADA’s Government
Affairs Committee.
Early in November, the House passed H.R. 3962, the
“Affordable Healthcare for America Act,” on a tight party line vote.
The House legislation includes significant costs for dealers and a
“public option,” which is paid for with additional taxes and fees.
NADA voiced its opposition with other business groups
in the Small Business Coalition for Affordable Healthcare.
Consideration of the Senate legislation will likely extend into early
next year as numerous amendments will be offered in an effort to
win over key Democrats.
oppose both bills because of
the costly employer mandates
that require business owners to
provide “government-approved
health care coverage” to their
employees. In the House bill, for
example, businesses unable to
comply with this mandate will be
penalized at a rate of 8 percent of
their annual payroll. In the Senate
bill, small business owners would
be charged as much as $750 for
each employee who opts out of
their coverage.
Chuck Eddy,
Ohio NADA Director
Dealers should contact their Senators and urge them
to oppose costly mandates on small businesses and dealerships.
Senators can be reached through the Capitol switchboard at (202)
224-3121.
In other legislative and regulatory news…
EPA Reconfirms SPCC Qualified Facility Rule; Compliance
Date Remains Nov. 10, 2010
The U.S. Environmental Protection Agency (EPA) issued
a final Spill Prevention, Control and Countermeasure (SPCC) rule
on Nov. 13, keeping intact a 2008 amendment designed to provide
regulatory relief for small facilities, including dealerships. EPA
has confirmed that “Tier 1” qualified facilities may use a simple,
self-certified SPCC plan template in lieu of a complex written
plan. “Tier 1” qualified facilities are those that:
(1) Have 10,000 or fewer gallons in aggregate aboveground
oil storage capacity and a maximum individual oil storage
container capacity of 5,000 gallons, and
(2) For the three years preceding SPCC plan certification,
have no single discharge of oil exceeding 1,000 gallons to
navigable waters, or two discharges of oil each exceeding 42
gallons to navigable waters within any 12-month period.
In 2006, EPA designated most facilities storing fewer than
10,000 gallons of oil and related fluids to be “qualified facilities”
eligible to prepare and self-certify their own written facility
SPCC plan, thereby avoiding the expense of hiring a professional
engineer to do so. The new option for Tier 1 facilities is even less
burdensome.
NADA Regulatory Affairs intends to publish further
guidance on this issue in early 2010.
FTC Again Delays Enforcement of Red Flags Rule
On Oct. 30, the Federal Trade Commission again delayed
– until June 1, 2010 – enforcement of the Red Flags Rule. Many
dealers have already implemented Red Flags programs, but those
NADA News
NADA and many in the business community strongly
www.oada.com
continued on Page 10
january 2010
7
Great speakers, hot topics for business
sessions/town hall meeting plus afternoon breakout sessions with cost cutting ideas on ways to
increase your dealership profit.
The Greenbrier began writing a new chapter in its 231-year history
in 2009, with a new owner at the helm…new amenities including
the Prime 44 West steakhouse and the Tavern Casino, have been
added to the many activities The Greenbrier has to offer.
Enjoy “The New Greenbrier Experience”
www.greenbrier.com
PHENOMENAL GUEST ROOM RATES OF $256.00 PER
NIGHT (standard room) WHICH INCLUDES Mandatory RESORT
FEE AND TAXES!
Visit www.oada.com for complete registration information.
Click on Events then OADA Annual Convention to print your registration
form.
Or call Sheryl McGavern @ 614-923-2228 for convention information and
answers to your questions.
Clunker Auditor
continued from Page 5
Here are my observations:
1.
The auditor was only interested in
reviewing the paperwork that was submitted to CARS. He did not want/need to see
full deal jacket contents.
Given this, dealers are well-advised to keep
separate CARS files for all CARS deals. I
don’t recommend handing the auditor an
entire deal jacket.
This auditor did not ask to access any
computers or computer files. Technically,
the auditor may be entitled to look at the
computer used to submit deals to CARS.
Therefore, it’s probably a good idea to
make sure all the electronic CARS files are
on one computer, in one master directory.
2.
The auditor wanted to look at a
sample of approximately 5% of the total
number of Clunker deals. In this audit,
the auditor reviewed 20 deals, 10 deals that
were paid and 10 that were still pending.
The audit lasted approximately 3 hours.
3.
for:
The auditor was primarily looking
a. Evidence of a Good Process If each
deal looks the same, with all paperwork in
the same order, that is evidence of a good
process. This auditor liked the fact that
this dealer printed out the CARS Invoice
from the iSupplier Portal and included
that invoice as a cover page to each CARS
deal packet.
b. Evidence of Fraud It was difficult
to determine what kind of specific evidence of fraud the auditor was looking
for, but suffice it to say, he didn’t find any
at this dealership.
c. Contingency Arrangements The
auditor was looking for evidence that a
dealer submitted a claim for payment and
then delivered the vehicle to the customer
only when the claim was approved for
payment. As some of you may recall,
this was an issue that prompted NHTSA
to post a statement on the CARS website.
NHTSA commented that dealers must
deliver the new vehicle to the customer
prior to submitting a claim for reimbursement.
Along these lines, the auditor was mainly
looking for CARS invoice submission
dates that were considerably earlier than
the contract date. In our audit, he found
one instance where the CARS invoice
date was three days earlier than the date
on a contract (this was the result of a
rewrite). However, the auditor wasn’t
overly concerned because an invoice
wouldn’t be cleared for payment in three
days.
One thing worth noting is that this dealer
group properly used the Auto Advisory
Services CARS Addendum. The auditor
made no comment regarding use of this
addendum.
d. Evidence of Fees Being Charged to
Consumers to Participate in the Program
The auditor was really just looking for
blatant evidence of additional fees being
charged to a customer for participation
in the program.
The auditor did not seem concerned with
the amount for which the dealership sold
the clunker. In fact, it would have been impossible to determine this information from
the documentation the auditor reviewed.
5.
The auditor was not interested in
determining eligibility of vehicles/transactions. He indicated that was the job of the
people reviewing the paperwork.
You may have already guessed that
this audit ended well for the dealer. Based
upon my discussions with the auditor, it is
highly unlikely that this dealer group will
be subject to any fines or have to endure
any further reviews. I say “highly unlikely”
because the auditor is not the one who ultimately makes those determinations. The
auditor merely reports back to those people
who do make those decisions in Washington,
DC. But, this auditor mentioned his report
would indicate that no significant problems
were found.
Please note that this article merely
contains my observations based upon one
Cash for Clunkers audit. If your dealership
is selected for an audit, it may or may not be
similar to the one I described above. And,
although the auditor I met is responsible for
all of California, there is no guarantee that
he will be the auditor chosen for your dealership.
I am interested in knowing how other audits were conducted. If your dealership
has had a Clunkers audit, please feel free to
shoot me an email (robcohen@autoadvisory.
com) and let me know how it went. <
www.oada.com
2010 OADA Trustee
Election Wrap-Up
The 2009 OADA trustee elections for
calendar year 2010 have been completed, with
elections in seven of the 20 districts. Elections
were recently held in districts one, four, seven,
10, 13, 16 and 19. The following is a complete
listing of your 2010 OADA trustees:
Dist 1:
Dist 2:
Dist 3:
Dist 4:
Dist 5:
Dist 6:
Dist 7:
Dist 8:
Dist 9:
Dist 10:
Dist 11:
Dist 12:
Dist 13:
Dist 14:
Dist 15:
Dist 16:
Dist 17:
Dist 18:
Dist 19:
Dist 20:
Dave White Jr.,
Dave White Chevrolet (re-elected)
Larry Greve
Greve Chrysler Jeep Dodge of Van Wert
David Arbogast
Arbogast Buick GMC, Inc.
Craig Voss
Voss Village Cadillac (re-elected)
Robert Huser
Fairfield Lincoln Mercury Volkswagen
Mark Ackerman
Glenway Chevrolet
Paul Heflin
Courtesy Chevrolet (out-going)
Chris MacConnell
Thomson-MacConnell Cadillac (newly elected)
Jim Keim
Jim Keim Ford, Inc.
Don Smith
Hugh White Honda
Jim Gusweiler
Gusweiler GM Center (out-going)
Andy Glockner
The Glockner Chevrolet Company
(newly elected)
John Dunning
Dunning Motor Sales
Bill Ferris
Ferris Chevrolet, Inc.
Bill Reineke, Jr.
Tiffin Ford Lincoln Mercury
(out-going)
Buck Baumann
Baumann Auto Group (newly elected)
Robert Serpentini, Jr.
Serpentini of Orrville
Jim Deacon
Deacon’s Chrysler, Inc.
Tim Towell
Dave Towell Cadillac Saab
(re-elected)
Don Petruzzi
Don’s Brooklyn Chevrolet
Kirt Frye
Sunnyside Automotive
Diane Sauer
Diane Sauer Chevrolet (out-going)
Russell Banks
R.D. Banks Chevrolet, Inc.
(newly elected)
Bill Lavery
Lavery Chevrolet Buick, Inc.
january 2010
9
NADA News
continued from Page 7
who have not should review NADA’s “A
Dealer Guide To The Red Flags and Address
Discrepancy Rules: Protecting Against
Identity Theft.” In addition, NADA also has
produced several virtual seminars on the
topic, including “Complying With the New
FTC Red Flags Rule” and “A Deeper Dive
into the FTC Red Flags Rule.”
In NADA news…
•
Ford’s Mulally and Toyota
Motor Sales U.S.A. Become Foundation
‘Ambassadors’
Ford Chief Executive Alan Mulally and
Toyota Motor Sales U.S.A. Inc. have
become “Ambassadors” of the National
Automobile Dealers Charitable Foundation
(NADCF). “Ford Motor Co. has always been
a good corporate citizen, so it’s just fitting
that Mr. Mulally become an Ambassador
himself,” says Annette Sykora, an NADCF
board member and past NADA chairman.
Earlier this year, NADA President Phil
Brady accepted a $20,000 gift on behalf of
NADCF from Toyota Motor Sales U.S.A,
of which $10,000 was donated to the
foundation, making Toyota an Ambassador.
The remaining $10,000 was donated to
Northwood University. Other industryrelated Ambassadors are AutoNation Inc.
and the Ford Commercial Truck Dealers.
Today, the foundation has almost 500
Ambassadors. For more on the program,
visit www.nada.org/cf.
•
IRS Answers ‘Cash for Clunkers’
Tax Questions
In a New York Times article published earlier
this month, the Internal Revenue Service’s
Peggy Riley clarified for consumers and
dealers whether the “cash for clunkers”
rebates are taxable income. According to the
program’s rules, “the credit is not income
for the consumer.” That means no federal
income tax, Riley told the Times.
Dealers, however, are responsible for paying
taxes on income from the program. To the
extent the dealership receives any scrap
value for the customer’s trade-in, that scrap
amount also is included in the dealership’s
income, according to an automotive alert
issued by the IRS’ Motor Vehicle Technical
Adviser Terri Harris.
The IRS has urged dealers to maintain proper
10
january 2010
records of the CARS transactions, including
the gross receipts from the sale of the new
vehicle, the CARS payment amount, and any
expenses incurred to dispose of the traded-in
vehicle. To read the IRS’ automotive alert,
visit www.nada.org/cashforclunkers.
•
NADA Convention Begins on
Friday, Feb. 12
a quick glimpse into what you can expect
from NADA University. Be sure to visit us
at the NADA Convention for the exciting
launch and more details!
•
N A D A M e m b e r s : D i d Yo u
Attend the Free Webinar on Detecting and
Preventing Fraud in Dealerships?
For the first time, the 2010 Convention will
have a full slate of workshops on Friday
afternoon—before the actual ribbon-cutting
on Saturday. Workshops will be presented
Friday at 1:30 p.m. and 3:15 p.m. Go to
www.nada.org/convention for details. Plan
to arrive early, and take advantage of the
NADA Stimulus Package—a $200 voucher
at registration toward the purchase of any
product or service from any exhibitor on the
showroom floor. See details below.
Many NADA members attended the free
Webinar on detecting and preventing
fraud, presented by NADAPerks, the
complimentary benefit members receive
every month, just because they’re members.
Members who didn’t receive their
NADAPerks e-mail need to make sure their
record is up-to-date—and now is the perfect
time, as NADA’s Membership Department
is reconciling its records at year-end. To
update a record, simply visit www.nada.
org/membership.
•
NADA Offers Dealers an Extra
Incentive to Attend Upcoming Convention
•
NADA 20 Group: All-New, AllOnline Composite Nearly Complete
As an added incentive to attend NADA’s
upcoming Convention & Expo, each dealer
and dealership manager will receive a
$200 voucher when they check in at the
convention in Orlando. The $200 voucher
can be used to purchase any product or
service from any exhibitor on the expo floor
during the three-day convention, February
13-15, 2010. “During these challenging
times, this is our way of showing our
support for dealers around the country and
the future of their businesses,” says Steve
Pitt, NADA vice president of conventions
and expositions.
As of Dec. 31, transition to the new
composite will be complete for all 24
automotive franchises. The OEM-specific
composite delivers the numbers members
need to analyze, plan, and take action.
With more than 80 reports and customized
comparisons, this interactive, Web-based
management tool is easy to use and updated
daily. To learn more, contact NADA 20
Group at (800) 248-6232, ext. 7117, or
e-mail [email protected].
•
NADA University to Launch in
February
Today’s automotive professionals are facing
more challenges and a faster rate of change
than ever before. To help ensure your staff
has the right knowledge, information and
up-to-date skill-set, NADA and ATD will
launch NADA University in February 2010.
NADA University’s mission is to provide
dealers with timely and relevant content
offered conveniently and affordably. It
will encompass four “automotive centers
of excellence,” each complementing the
others in content and the role it plays
in supporting the dealership operations.
With a focus on supporting car and truck
dealers alike, the centers are: Academy
– Leadership Development; Learning
Hub – Education Solutions; 20 Group
– Performance Improvement; Resource
Toolbox – Industry Information. This is just
ohio automobile dealers association
•
Seats Available for Upcoming
Academy Classes
There are still openings in both general
manager and dealer candidate classes
scheduled for January and February. The
Academy has made modifications in
the curriculum to address e-commerce
and inventory control for the new- and
used-vehicle departments and the parts
department. Details about Academy
leadership development programs, along
with the current brochure and application
form, are available at www.dealeracademy.
org. For more information or questions,
contact Academy registrar Diane Weppner
at (703) 821-7216 or e-mail dweppner@
nada.org. <
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