PAA was extremely engaged on several fronts during the now concluded budget session.

Transcription

1 Bulletin No 13 July 12, 2013 Pennsylvania Automotive Association in this issue... Page 1 - Page 2 Legislative Update: Budget, Board of Vehicles Act, and Inspection Programs Page 3 Patient Center Outcomes Research Institute (PCORI) Fee Page 4 Affordable Care Mandate Delayed to 2015 Time Quality Car and ATD Truck Dealer Nominees Needed PAA News Bulletin is a publication of the Pennsylvania Automotive Association 1925 North Front Street Harrisburg, PA President John Devlin Director of Communications Melanie L. Bible Directory PAA (PAA & Title) PAA Fax DPS PAA Insurance mail@paa.org (Attn: General Managers) Legislative Update: Budget, Board of Vehicles Act, and Inspection Programs After passing the state FY $ billion budget bill on June 30, the Pennsylvania General Assembly adjourned. While there remains a possibility that the body will re-convene for one day this summer to take up the final passage of one outstanding budget-related bill, consideration of legislation by the state House and Senate is suspended until September. PAA was extremely engaged on several fronts during the now concluded budget session. Emissions and Safety Inspection Programs For the past several years, PAA has been quietly battling efforts to eliminate or modify the state safety and emissions testing programs. This year however, due to the consideration of transportation funding, legislative proposals related to these programs garnered much more attention and support in the General Assembly. Consequently, the association s lobbying strategy to promote the continuation of these important programs was wide-ranging, hardfought, highly visible, and ultimately successful. It is anticipated, however, that preserving these programs will be an ongoing fight. Senate Consideration of Emissions and Safety Inspection Bill Very early in the current legislative session, a bill exempting new vehicles from the state emissions testing program for their first ten years of operation was introduced in the state Senate. Additionally, in March, legislation exempting new vehicles from the safety inspection program for their first two years was introduced. In anticipation of attempts to advance such proposals, PAA prepared a variety of advocacy materials to complement our more typical lobbying approach, including the production of informational videos and the compilation of program testing data that demonstrated the merits of these programs. These materials are available online at When it became clear that the Senate Transportation Committee was considering moving the emissions bill, PAA mobilized quickly and effectively. And, despite ardent engagement by the prime sponsor of the initiative, the association garnered enough negative votes in the committee to prevent it, at that time, from being reported to the full Senate. Upon recognizing this very unusual circumstance, the bill was temporarily withdrawn from consideration and tabled in committee. Advocates of the proposal were caught by surprise and did not expect the concerted push-back that PAA orchestrated. Subsequently, much pressure was exerted on the Transportation committee members who voted against the initiative on the dealers behalf. As (continued on page 2)

2 Bulletin No 13 July 12, 2013 Page 2 Education Award PAA is looking for Nominees for Northwood University Dealer Education Award. Nominees have made noteworthy contributions to education, public or private inside or outside the industry. If you know a dealer who represents the criteria stated, submit your nominee online at edu/forms/dea or contact Melanie Bible at mbible@paa.org. a result, two of our no votes switched to yes when the bill was brought up again in committee on June 3, At that time the bill was also amended to include language that would exempt vehicles less than two years old from safety inspection. It was reported to the full Senate for consideration. A coordinated dealer call to arms then ensued in which PAA members contacted their individual senators in opposition to the emissions/safety inspection legislation. The dealer grassroots efforts, coupled with intensive education and lobbying activities on the hill, have stalled the bill in its tracks and it has been passed over on the Senate floor calendar (i.e., not voted) every day since June 18. The bill has since been removed from the calendar and tabled. House of Representatives - Emissions and Safety Inspection Tied to Transportation Funding Bill During the House consideration of the transportation funding legislation that was initiated by the Governor and passed by the Senate in late June, it became clear that the public backlash against the legislature for increasing the gas tax and raising other vehicle related fees would be severe. Consequently, much effort was expended by legislative leaders to identify proposals to include in the bill that the public might like. Eliminating the emissions testing program was viewed by some legislators as a way of lessening voter anger. In the final days of the budget session, PAA was therefore directly engaged in ensuring that no emissions program amendments were inserted into the transportation funding bill that was supposed to be sent to the governor before the legislature adjourned for the summer. PAA allies in the House leaderships (both Republicans and Democrats) were instrumental in keeping such amendments out of the bill. As June 30 came and went, with PAA positioned to attempt to defeat some troublesome emissions floor amendments that had been drafted, the House leaders determined that there were not enough votes to pass a transportation funding bill. It is anticipated that the legislature will consider transportation funding again when they reconvene in September. PAA will continue to work to educate legislators on the benefits of the emissions and safety inspection programs. State Franchise Law Legislation In an effort to expand dealer protections to prevent unfair treatment by vehicle manufacturers, legislation amending the state Board of Vehicles Act was introduced by Sen. Robert M. Tommy Tomlinson on behalf of PAA on March 26, Senate Bill 732: Allows dealers to have more flexibility in selecting certain building materials when performing manufacturer-imposed facility upgrades; Establishes provisions for dealers to elect reimbursement from manufacturers for warranty parts at the retail cost rate; and Shortens the look-back period for manufacturer warranty and incentive audits of dealers. After only five legislative session days following its introduction, and despite fundamental disagreement and strenuous opposition by the vehicle manufacturers, SB 732 was reported out of the Senate Consumer Protection and Professional Licensure Committee. Manufacturer efforts to alter the bill on the Senate floor were once again unsuccessful. Unanimous Senate passage was achieved on June 4, Consideration of SB 732 by the House of Representatives is currently underway, and PAA is working on the bill with the House Professional Licensure Committee. While the associations representing vehicle manufacturers remain actively engaged in opposing this legislation, it is anticipated that House passage and enactment by the Governor will take place this fall.

3 Page 3 Bulletin No 13 July 12, 2013 (Attn: General, Office Managers and Controllets) Patient Center Outcomes Research Institute (PCORI) Fee The Affordable Care Act (ACA) created a new fee on health plans to fund the Patient-Centered Outcomes Research Institute (PCORI). The Institute was established to fund the research of the clinical effectiveness of medical treatments, procedures and drugs. To fund this Institute, the ACA imposes a fee on both insured and self-insured health plans. How much is the fee? During its first year, the fee will amount to $1 per covered life per year. During its second year, the fee will be $2 per covered life per year. The fee will be adjusted for inflation in subsequent years. When does the fee go into effect? The fee applies to health insurance policies with policy years ending on or after October 1, 2012 and self-insured health plans with plan years ending on or after October 1, Who is responsible for paying the fee? For self-insured plans, the employer has the responsibility to pay this fee. Self-insured employers will need to calculate the average number of lives insured (including each dependent) and multiply that number by the applicable fee ($1 first year). For fully insured plans with no HRA, the health insurance carrier has the responsibility to pay the fee directly to the federal government. Employers will not need to file anything. For employers that offer a fully-insured health plan, but also offer an HRA to reimburse medical expenses not covered by the health plan, the PCORI fee applies separately to the HRA. Regulations consider HRAs a type of self-insured group health plan. In this case, the insurance carrier will pay the fee for the medical plan, but the employer will need to pay the fee for the HRA component by calculating the number of employees enrolled in the HRA (not including dependents) and multiplying that number times the $1 fee for the first year. In essence, in this situation the PCORI fee is being paid twice on the same individuals. Whom Do I Pay? The IRS will treat this fee as an excise tax. Therefore, employers must file a Quarterly Federal Excise Tax Return (Form 720). The form and instructions were recently updated to be used for this new reporting requirement. When is the Excise tax filing due? Employers must file Form 720 by July 31 of the calendar year immediately following the last day of the plan year. This will mean that those self-funded (including HRA) plans with a policy year that ended between October 1, 2012 and December 31, 2012, will have to file Form 720 by July 31, For example, an employer with a calendar year plan would be subject to this July 31, 2013 timeframe. Plan years ending in 2013 will not need to file their first Form 720 for this purpose until July 31, How is the Fee Calculated? Three methods can be used: 1. Form 5500 Method: For those groups that file a 5500, number of participants reported on the Form 5500 for the plan year. 2. Actual Count Method: Number of lives covered for each day of the plan year, divided by the number of days in that plan year. 3. Snapshot Method: Number of lives covered on one date in each quarter, (e.g., the first day of the quarter), divided by the number of dates on which a count was made. A special transition rule for the first year fee permits a plan sponsor to use any reasonable method to determine the average number of lives covered under the applicable self-insured health plan for a plan year beginning before July 11, 2012 and ending on or after October 1, Form 720 can be accessed at Refer to for information on filling out the form (pages 1,8, 9).

4 Bulletin No 13 July 12, 2013 Page 4 PAA/DealersEdge Webinar Schedule July 18 - How to Avoid the Bermuda Triangle of Advertising Expense in Your Dealership or Group July 25 - How to Generate Your Own Sales Leads by Effective Prospecting Via the BDC and Beyond! August 8 - How to Harness 21st Century Technology for Increases in Staff Efficiency, Computer Security & Cost Control To participate in one of the upcoming PAA/ DealersEdge Webinars, visit paa.dealersedge. com. Order Labor Posters online at (Attn: General, Sales, Office and F&I Managers) Affordable Care Mandate Delayed to 2015 The federal government announced on July 2, 2013 that it will delay implementation of the employer mandate penalties and reporting requirements until the 2015 plan year. This means that large employers (50 or more employees) will not pay any penalties in 2014 if they do not offer affordable coverage that meets minimum value as defined under the Affordable Care Act. The government stated that the delay was due to the complexity of the reporting requirements and also stated it will simplify those reporting requirements. The regulatory agencies will publish formal guidance on this transition in the near future. More information will be communicated when the federal government issues transition regulations. The individual coverage mandate still applies and Healthcare Marketplace (Exchange) will still be effective January 1, Exchanges will be marketplaces for individuals to shop for private health insurance coverage. If citizens do not have affordable insurance available to them through employers or through government plans such as Medicare, Medicaid or CHIP, they will be able to go to these Exchanges to get insurance, potentially at a subsidized premium depending on the applicant s income. Initial enrollment period begins October 1, 2013 for January 1, 2014 coverage. More information on the Affordable Care Act can be found in PAA News Bulletin No. 8 (4/29/2013) (Attn: General Managers) Time Quality Car and ATD Truck Dealer Nominees Needed PAA is looking for nominations for the 2014 Time Quality Dealer of the Year Award and ATD Dealer of the Year Award. To be considered for selection, a nominee must: Be a franchised new-car/truck dealer; Be a member of NADA/ATD; Be a member of a state dealer association; Be the operating head of the dealership as designated in the franchise paragraph of the factory agreement for a minimum of one year; Have a presence in the dealership offices during at least 60% of business hours; Have at least a five-year record of active participation in affairs of the nominee s state or local dealer association; and Agree to be available for participation in Dealer of the Year activities at NADA s Convention. Provide your recommendations online at Nominations will be reviewed, and dealers from Pennsylvania will be chosen based on the strength of the listed reasons for nomination. Please provide as much detail as possible. Bulletin Survey 1. What percent of new sales were electric or hybrid vehicles? % 2. What percent of sales are internet based? % Respond online at and click Monthly Bulletin Survey on Home Page

5 2013 PAA NEWS BULLETIN INDEX of ARTICLES News Bulletins 1-12 Accounting/Taxes Cash Reporting Notification to Customers by Jan 31 Bulletin 1 1/14/2013 Manufacturer Incentive Payments are Taxable Income Bulletin 4 2/26/2013 Updates to PAA Tax Bulletin Bulletin 1 1/14/2013 Unclaimed Property, Reporting Bulletin 6 3/26/2013 Employment/Office Dealers must display Updated FMLA Posters Bulletin 5 3/8/2013 Employee vs. Independent Contractor - IRS Audits Bulletin 7 4/15/2013 Health Insurance Issue: Affordable Care Act Bulletin 8 4/29/2013 Health Reform: Guidance issued on Exchange Bulletin 11 6/13/2013 I-9 Form Must be Used, New Bulletin 7 4/15/2013 Minors, Regulations for Employing Ages Bulletin 9 5/15/2013 NLRB Poster Requirment Struck Down Bulletin 9 5/15/2013 Overtime for Service Advisors Extended Bulletin 7 4/15/2013 Unemployment Compensation Poster, Changes to Bulletin 11 6/13/2013 Work force Study, NADA Bulletin 6 3/26/2013 Sales Advertising, Dealers Should Beware Deceptive Bulletin 10 5/24/2013 AFV Label Burden, FTC Eliminates Bulletin 9 5/15/2013 Credit Card Surcharges Bulletin 3 2/14/2013 Damage Disclosure, New Vehicle Bulletin 12 6/26/2013 Documentary Fee Increase for 2013 Bulletin 3 2/14/2013 ECOA, Disparate Impact, and the CFPB -Webinar Bulletin 7 4/15/2013 FET Not Subject to PA Sales Tax Bulletin 12 6/26/2013 FTC Enforcement Activity on Window Sticker Req. Bulletin 4 2/26/2013 Licenses, Renew Dealer and Salesperson by May 31 Bulletin 9 5/15/2013 Licenses, Renew Dealer and Salesperson by May 31 Bulletin 5 3/8/2013 Minors, Vehicle Sales and Service Bulletin 9 5/15/2013 Off Premise, Dealers must notify DOB and PennDOT Bulletin 11 6/13/2013 Pennsylvania Automotive Association These articles are available at under Members Only

6 Online Advertising, FTC Revises Guidelines Bulletin 6 3/26/2013 Red Flags Rule, FTC issues revised Guidance Bulletin 12 6/26/2013 Service/Body Shop A/C Technicians Must Be Compliant With EPA Recycle Regulations Bulletin 7 4/15/2013 PAA Team Places 5th at National Competition Bulletin 7 4/15/2013 VehicleTechUSA: Product to Assist with Compliance Bulletin 1 1/14/2013 Titling/PennDOT Revised form MV-351 Bulletin 4 2/26/2013 Secure Power of Attny Forms - Legislation Enacted Bulletin 1 1/14/2013 Legislative 2013 PAA PAC Campaign Begins Bulletin 6 3/26/2013 Alternative Fuel Vehicle Rebate Program Bulletin 3 2/14/2013 Congress Repeals Insurance Booklet Mandate For Dealers Bulletin 1 1/14/2013 Safety/Emissions Inspection Information - Fact Sheet Bulletin 5 3/8/2013 Education Attorney General Webinar Series Bulletin 5 3/8/2013 Spring Titlework Training Seminars Bulletin 3 2/14/2013 Other 2013 Fall Conference Bulletin 10 5/24/ Scholarship Winners Bulletin 10 5/24/2013 Annual Report Issue Bulletin 2 1/25/2013 Automotive Technology Competition Winners Bulletin 4 2/26/2013 Golf Outing and Auction a Great Success Bulletin 11 6/13/2013 Golf Tournament/Auction for PAA Fund - Scholarships Bulletin 5 3/8/2013 Michael B Smith Elected NADA Director Bulletin 11 6/13/2013 NADA Director Election for Western PA Bulletin 9 5/15/2013 PAA Dealers Honored at NADA Convention in Orlando Bulletin 4 2/26/2013 Regional Meetings, PAA Hosts Bulletin 5 3/8/2013 Scholarship Applications Due March 1 Bulletin 3 2/14/2013 Pennsylvania Automotive Association These articles are available at under Members Only