Legislation is a directive that states place on an industry by the federal or state government that requires compliance to remain within the legal boundaries of that state or country. Regulations are explicit guidelines from federal and state regulatory agencies designed to help interpret how legislation passed by Congress will be implemented.
Legislation is typically general and broader. Regulation is specific, detailing how legislation is enforced. Legislation acts as an external driver that must be met by all industry participants to be compliant. Legislation is a directive proposed by a legislative body, and a regulation is a specific requirement within legislation. After legislation is passed, regulators (usually government bodies) examine the legislation and spell out details so laws can be enforced.
Like most changes occurring nationally and globally, the economy is driving the trend. In this economy, where many states are teetering on bankruptcy, a newfound opportunity for income via fines can be irresistible. Violations of a state or federal regulation usually come with penalties that are higher than those from violations of a government department.
Legislation also can be used to establish a government agency by using enabling legislation, which establishes the agency's mission and lays out the scope of its power. Agencies created by the legislature can have only the powers the state and federal constitutions allow. Once established, the legislature retains the power to modify the enabling legislation.
While a piece of legislation may be clear on establishing its role, scope and power of the agency, it's not always clear how the agency enforces the law. The legislature often gives an agency a general mandate, such as protecting the environment or ensuring vehicle owner safety, and empowers the agency to enforce the mandate.
Businesses and industries in several states struggle to comply with such agencies, often paying large sums of money to be compliant and facing crippling fines when they're not. The largest federal agency of this type is the Federal Insurance Office.
Title 5 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which President Obama signed into law this past July, established the Federal Insurance Office. While touted as giving the United States a stronger voice in international insurance matters, others see it as a national regulator of property and casualty insurance companies, given the broad mission statement of consumer protection, the bill's name. The agency likely will be involved in claims settlement practices and automobile repair claims. Collision repairers may fall under the scrutiny of the agency when the vehicle repairs are paid by an insurance policy. Until the next election, we'll have to watch how the agency develops.
As the old saying goes, "All politics is local." Be aware of proposed legislation in your state as well as who's proposing it to know how it may affect your business. Remember you're not alone. Plenty of other business owners in your state share your concerns, so join with others who have similar concerns, and make plans to take action. You might ask, "Isn't that what my local body shop association is supposed to do?" Exactly! Your body shop association is your resource to get the latest news about proposed legislation and the potential impact. These associations also will help establish a game plan for influencing the proposal and fighting onerous legislation. You can make a difference.
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