From the Desk of Jerry Abboud, Executive Director

Powersports Franchise Protection and Consumer Protection in One
In twenty-one years of representing powersports dealers in Colorado, the 2007 version of the Colorado General Assembly was clearly the most difficult. It was a different animal. You simply could not wrap your arms around it.

Republican hard liners were voting against other Republican's who were desperate to get a bill passed for picayune reasons. Democrats voted against consumer legislation while fierce personality conflicts had legislators voting against legislators instead of legislation. And when was the last time a liberal Democrat was concerned about Wal Mart while suggesting ATV safety should solely be a matter of parental responsibility? (Forget that the concept of parental responsibility went out the window almost 20 years ago with the ATV Consent Decree).

But, the good news is HB1081 got the nod, now what should you expect? PDAC is working with both the Motor Vehicle Industry Division of the Department of Revenue and the Motor Vehicle Dealer Board. As a reminder here are the new elements beginning July 1, 2007:

  • The requirements to become a powersports dealer are the same as those for a motor vehicle dealer. However, if you are already a licensed motor vehicle dealer, you will only have to pay a license fee to sell powersports products.
  • People selling only powersports will need to get a license; they will also need a physical address a showroom for one vehicle, parts and service.
  • Powersports manufactures have to register with the Director of the Department of Revenue and be able to have process served upon them if a lawsuit is filed against them.
  • Rules will be promulgated that reflect current motor vehicle rules, however, they will be different where applicable (such as requirements for title delivery) this will take time so for the moment you are guided only by the statute. New powersports rules should be implemented by the end of the year.
  • No, the Dealer Board understands the short time frame and there won't be problems for being cited unless you ignore the license requirement after being notified to obtain one.
  • Perhaps most important of all, the Dealer Board has agreed to adopt the 2001 ANSI/SVIA standards for compliance and configuration of ATVS. This means the dangerous junk will eventually be off the streets. But please be advised, before you sign on with any new manufacturer be advised that their product will need to comply with the standards once the rule goes into effect. No more Meerkat 50s with no front brakes, no parking brake and the ability to start in any gear. Consumers will know what they are purchasing.

    The Division has asked for your help in identifying unlicensed dealers after July 1, 2007. These are the fly by nights and chains. Ask a customer who has purchased a unit and comes to you for repairs. You know the junk models when you see them, and the probability the seller is not licensed. This will gradually weed out the unlicensed dealers.

    The consumer will very soon be able to buy with confidence, the junk that can hurt kids will be gone and those of you who pride yourselves in you products and operations will be on a level playing field.

    You should be receiving the necessary information very soon on licensing. If you have questions after another week passes, contact the Board at 303 205-5696.


    Tire Surcharge
    For ten years PDAC has managed to maintain a motorcycle exemption from the disposal surcharge on tires. This year the Democrats in the legislature and Governor decided to up the surcharge to $1.25 and include motorcycle tires. PDAC was unable to put the maximum effort into keeping the exemption.

    Candidly, this is the result of prioritizing issues and limited resources. The investment of time, money and staff to pass HB1081 and SB221 simply left little ability to take on the Democrats in the legislature on a issue that has a much smaller impact. That is not to say that there isn't a possibility of reinstating our exemption in 2008, but once again the major issues must be addressed first. With a larger dealer membership and, hence, greater resources, this probably could have been stopped with additional contract lobbying assistance. (Read the chairman's article in this newsletter to get a sense of the scope of the General Assembly's activities).

    Beginning July 1, 2007 when dealers receive used tires they must collect and remit the fee of $1.25 for the Waste Tire Recycling Development Program:

    "The fee authorized by this section shall be collected only at such time as the owner of the tire delivers or transfers the waste tire to a retailer of new tires for disposal and shall be stated and shown as a separate and distinct item on the statement from the retailer to the customer."

    You should be receiving the collection forms from the Department of Revenue, if you have not received them contact the Department.

    Please note, there is no prohibition on a separate fee you charge for disposal. Customers have been paying this disposal tax on auto and truck tires for ten years. Feel free to charge a separate charge for your reasonable costs of disposal as the statute does not prohibit this.


    Denver Remains Deaf
    Despite public testimony regarding the flawed nature of a new Denver Bill, #242 that restricts motorcycles to OEM/EPA approved exhausts, the City Council Passed the bill into Ordinance. PDAC contacted the AMA and was pleased to find they were on the issue already, see news release below.

    ABATE of Colorado is following this issue and had originally contacted the AMA. PDAC spoke to Imre Szauter, Legislative Specialist for the AMA for an hour. Imre was most helpful and knowledgeable. He has agreed to keep us informed and PDAC has requested a seat at the table with the City of Denver to attempt a fix. If for any reason there is no positive response to Imre's letter to Denver, PDAC will engage the city directly and move to lobby immediately for change. It appears the AMA believes they will be receiving a quick response. We will know shortly.

    Our dealers should know we will be in the thick of things. Special thanks to Dave Waggoner at Coyote for calling attention to this important issue.


    AMA concerned over Denver law that bans aftermarket exhausts, seeks dialogue with city officials
    www.amadirectlink.com
    A new law passed by the Denver City Council essentially requires all riders in the city to use only stock exhaust systems on their motorcycles. It's a law that addresses sound issues by unfairly targeting only motorcyclists, and the AMA is seeking a dialogue with Denver city officials to try to find a solution.

    On June 4, Denver officials approved changes to the city's vehicle noise ordinance that allow police to issue tickets to riders if their bikes don't have a federal Environmental Protection Agency sound-certification label on the exhaust systems. The new ordinance, which takes effect July 1, would apply to all motorcycles made since 1982, which was the first year that federal law required motorcycles sold in the U.S. to comply with EPA sound regulations.

    In practical terms, that means the bike would have to have the original exhaust system installed by the manufacturer. Violators would have two weeks to prove to a judge that they have fixed the problem or would be forced to pay a $500 fine.

    Previously, the Denver ordinance required all motor vehicles to pass a sound test that set a limit of 80 decibels at 25 feet. That type of performance standard remains in effect for cars and trucks, except that the allowable limits have been raised. Under the new ordinance, vehicles with a gross weight rating under 10,000 pounds couldn't exceed 82 db(A) at 25 feet, and trucks over 10,000 pounds couldn't exceed 90 db(A) at 50 feet. Only motorcycles would be subject to the EPA sound certification labeling requirement.

    "We understand the motivation for cities to pass laws controlling sound levels from traffic," said Ed Moreland, AMA Vice President for Government Relations. "But the approach being taken in Denver creates a special class of enforcement that unfairly targets motorcyclists. Loud trucks and cars are every bit as annoying as loud motorcycles, but only motorcyclists would be subject to this new provision of the labeling law."

    To understand the restrictions being imposed on motorcyclists, Moreland asked car drivers to consider the impact if Denver city officials had instead required stock mufflers on cars, making it illegal for Denver drivers to buy replacement exhaust systems from companies like Midas or Meineke.

    "That would force everyone who drives a Ford to return to the Ford dealer and get the exact replacement muffler every time their exhaust system wore out," he noted.

    The AMA's position on the new Denver ordinance got support June 7 in an editorial in the Rocky Mountain News which stated: "As more than one critic of the ordinance?noted, it just doesn't appear ready for prime time."

    Several years ago, the city of Albuquerque, New Mexico, passed a similar certification ordinance affecting motorcyclists there. Motorcyclist groups, included the AMA, worked with city officials for two years before that provision was rescinded and the city went back to a performance-based sound standard.

    The AMA has a decades-long history of opposition to excessive motorcycle sound, and has hosted national summits on the subject that have brought together riders, manufacturers, aftermarket companies, law-enforcement officers and government officials. Those summits have resulted in the development of "Sound Advice," a document that represents the motorcycle community's response to this contentious issue. Among the groups that have supported that effort is ABATE of Colorado, which has issued a position paper warning riders that they could face this kind of discriminatory enforcement because of growing public complaints about traffic sound levels.

    The AMA is contacting Denver City Council members in hopes of opening up a dialogue on this topic before enforcement of the new law begins on July 1.

    "We look forward to working with the Denver City Council to come up with a more reasonable solution for dealing with excessive sound levels from traffic," Moreland said. "Our experience has shown that there are a range of approaches cities can take to this issue without imposing restrictive laws on motorcyclists."

    Click here to read another article published in the Denver Post - "Bikers told to pipe down."


    From the Chairman's Perspective
    By Kurt Finley

    Numbers

    Lately, some very interesting numbers have gotten my attention. They are 642, 463, 59% and 1/3. These numbers are all at the same time amazing, frightening and difficult to understand.

    The number 642 refers to the number of bills introduced this year into the Colorado State Legislature. 642 pieces of new legislation that, if they were all passed and signed by the governor, would mean at least 642 new laws in Colorado. These bills covered everything from immigration reform to taxes to mortgage fraud. This number is amazing because 642 seems like a lot of new laws that we just can't live with out; but somebody thought we needed each one of them. This number is frightening because 642 is actually a relatively low number of bills to be introduced in a legislative session. In fact, the 390 bills that originated in the house was a twenty-year low!

    Of course, not all proposed pieces of legislation make it through the house and the senate and are then signed by the governor. During the process, hearings are held, lobbyists are listened to, studies are made and constituents are consulted. There is the legislative give and take. The results of these deliberations derail some bills in committee and they never even reach a full vote. Others get their up or down vote and get voted down. Finally, if both houses approve, the bill is sent to the governor for his signature or veto.

    And that's where the number 463 comes in. That's how many of the original 642 pieces of legislation made it through the legislative process and landed on the governor's desk. That's a 73% success rate, which is surprising when you consider how many lawmakers have to agree to get anything done. Now, not all of these bills were signed by the governor. He famously vetoed the union vote bill and not-so-famously turned down bills concerning identity theft, Medicaid funding and the regulation of athletic trainers. But in all, he vetoed just 8 out of 463.

    Now, 463 is an amazing number because it represents a record number of bills to hit the governor's desk. In most years, the number is less than 400 as legislative battles stall more bills. This year, all branches of government were controlled by one party, and that a party that has been out of control for some time, so it's probably natural that so many new laws were made this year.

    Numbers Game

    642 Bills Introduced in the 2007 Colorado State Legislature

    463 Pieces of Legislation that made it to the governor's desk

    8 Pieces of Legislation that the Governor vetoed

    1/3 of the state's eligible powersports dealers have become dues paying members of the dealer association

    The number 463 is frightening because I had no idea there was so much legislative and regulatory business left undone before the year began. If we really needed all these news laws this year, we must have been in quite bad shape last year, and the year before that. How did we ever get along? Beats me, but I do know that one of the new laws brings powersports dealers and the products they sell under the regulatory auspices of the Colorado Dealer Licensing Board, protecting consumers, registering manufacturers and providing dealers with franchise protection. I like that one.

    Other new legislation has been signed into law this year that will affect motorcycle and powersports dealers in Colorado. Laws changing workers compensation regulations, requiring mandatory helmets for riders under 18, and the renewal of the dealer licensing board laws will all have a direct impact on our businesses this year and beyond. And guess what? Next year there will be about 400 more new laws on the books. I wonder which businesses and what consumers they will affect? Will new road insurance regulations make bike insurance prohibitively expensive? Will ATVs get titles? Will every rider be required to wear a helmet? Will sales tax go up?

    It's in light of 642 and 463 that 59% and 1/3 are so hard to understand. The 59% is the average number of powersports professionals around the state who have asked to receive the PDAC monthly e-newsletter in order to keep up with all this, but then neglect to read it. Fifty-nine percent asked for and get the information they need, but can't be bothered to read a four page summary of what's going on.

    Even harder to understand, is that only 1/3 of the state's eligible powersports dealers have become dues paying members of the dealer association, their only advocate working to protect and enhance the value of their powersports businesses. With the stroke of a pen, the state legislature, purposely or unintentionally, can dramatically affect the small business person's ability to make a profit. The powersports dealer association would be much more effective if more dealers would join the association and actually read the newsletter. In today's world, hiding your head in the sand can put you out of business.

    Anyone who understands the ramifications of the first two numbers, 642 and 463, has to be surprised and appalled by the second two: 59% and 1/3.

    The question is: what can we do about it?


    From the Membership Director, Michael Hendry
    The Powersports Dealers Association of Colorado (PDAC) would like to thank all of its members for their support during this past year. Your membership dues allows us to interface with Colorado legislature to promote and protect the strategic, financial and sporting interests of persons and businesses engaged in the retail sale of franchised motorcycles, ATVs, personal watercraft and snowmobiles. Please review our website at www.pdaco.org for more details of this vitally important organization to your business environment.

    The 2006/2007 legislative year was an exceptionally active and successful period for your PDAC. Our activities and successes included:

    1. Legislation for protection of consumers/dealers by requiring licensing of Powersports dealers
    2. Legislation creating franchise protection for dealers selling ATV?s, dirt bikes, snowmobiles and personal watercraft
    3. Legislation to create the OHV registration program to keep OHV trails open
    4. Legislation to create a funding mechanism for subsidizing tuition for motorcycle operator safety training

    The 2007/2008 year promises to be even more challenging with our agenda taking on the following issues:

    1. Raise the cap on allowable charges for GAP
    2. Mapping/protecting OHV trails and creation of OHV State Parks
    3. Mechanism to title Powersports products for lien protection
    4. Improve sales tax rules and regulations for non-titled Powersports vehicles
    5. Strengthen franchise laws for Powersports vehicles
    6. Prevention of the sale of "gray market" Powersports vehicles in Colorado
    7. Continuing improvement in new member recruiting, current member communication and overall marketing of the association

    Successful resolutions of these issues are vital to a positive business environment for our industry. To ensure that legislation is positive we need to engage the services of lobbyists and be involved in the political process in our legislature. This requires funds and these funds are collected through membership in our Association. Please continue to support this vital organization so your Board of Directors can work to ensure a positive business environment and legislation for our enterprises.

    The PDAC is presently contacting all non-member dealerships in Colorado to encourage them to join and support these vitally important efforts to maintain a positive business environment. Should you know of any potential members, please contact them and encourage them to join the PDAC.

    Thank you and Best Regards.



    Board of Directors
    Chairman, Kurt Finley - Colorado Powersports
    Secretary-Treasurer, Jason White - Fay Myers Motorcycle World
    Director, Donavan Facey - Xtreme Performance
    Director, Dave Burke - Sun Enterprises
    Director, Bill Comegys - Grand Prix Motorsports
    Director, Brian Harris - Fort Collins Motorsports
    Director, Jack Starr - RPM Motorsports
    Director, Gary Wilkerson - Handlebar Cycle
    Director, Mike Hendry - Foothills BMW/Triumph

    Executive Director, Jerry Abboud
    Members
    All Sports Honda
    Apex Motorsports
    Aurora Honda
    Colorado Powersports
    Coyote Motorsports
    Davis Service Center
    Fay Meyers Motorcycle World
    Foothills BMW/Triumph
    Fort Collins Motorsports
    Grand Junction HD
    Grand Prix Motorsports
    Greely HD, Honda, Yamaha
    Handlebar Cycle
    Hi Country Motorsports
    Interstate Honda

    Motoadventure
    Motorcycle Accessories
    Pikes Peak Harley Davidson
    Rocky Mountain Kawasaki
    RPM Motorsports
    Sun Enterprises
    Twin Peaks Motorsports
    Vickery Motorsports
    Xtreme Performance Center
    Associates:
    Universal Underwriters
    Tucker Rocky Dist
    PSN
    Western Powersports
    Retail Powersports Mang. Group


    Disclaimer: PDAC is not authorized to dispense legal advice. The information contained in this newsletter is for informational purposes only. PDAC advises that dealers consult legal counsel on the specifics of any law or regulation to ensure full compliance.