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Ohio Passes Registration Legislation

Thursday, January 1, 1998 - 01:00

COLUMBUS, Ohio-Ten years of persistence paid off for the Automotive Service Association (ASA) of Ohio Inc. in early October when legislators passed a law requiring collision shop owners to register with the state.

The legislation, which went into effect December 18, mandates that all autobody businesses file annually with the newly created Board of Motor Vehicle Repair Registration.

Marlene Compton, executive director of Ohio's ASA, hopes the regulation will professionalize the collision industry and will upgrade its image in the eyes of consumers.

"One of the reasons [behind the law] was there is no way in Ohio to know who is doing collision repair," she says. "It was kind of to level the playing field because we really felt there were a lot of people out there not running legitimate shops by not paying sales tax, not paying workers' unemployment comp, paying their people under the table, that kind of thing."

According to a summary of the bill, ASA worked for more than a decade with government agencies, such as the Ohio Environmental Protection Agency (EPA) and the Attorney General's office, to ensure shops were complying with applicable laws. "In spite of these efforts, large scale safety, consumer and environmental protection violations persist, which has created a price differential of more than 25 percent between shops which comply with state laws and those that do not," the summary reads.

Enforcing the Law
An estimated 5,000 collision repair businesses are expected to submit the required $100 fee and proof of such things as liability insurance and unemployment compensation coverage. Individuals who meet many of the registration requirements and who are working toward compliance in all aspects of the law may apply for a one-year temporary registration. These can be renewed a maximum of four consecutive times. Those who fail to comply will pay fines of $1,000 for a first offense, and repeat violators will face penalties between $1,000 and $5,000.

"We're not trying to put anybody out of business," says Bob Redding, ASA's Washington representative. "Our goals are to lift the industry up and have everyone comply and play by the same set of rules." The registration fees will fund a seven-member board charged with enforcing the law. ASA of Ohio nominated 12 autobody personnel and two mechanical professionals and submitted the names to Ohio Gov. George Voinovich. He will appoint to the board five of those collision professionals, one of the mechanical experts and a member of the public.

Hobbyists are protected under the legislation, which allows individuals to repair up to five vehicles every 12 months without registering. Also excluded from the legislation are licensed dealers; licensed vehicle auction owners; licensed salvage dealers; individuals repairing vehicles used for one business; government or industrial institution; rental agencies that repair only vehicles used in conjunction with the rental business; and instructors at autobody educational programs.

ASA of Ohio vied unsuccessfully for similar legislation a few years ago. That measure included mechanical repair shops, but gasoline industry representatives argued that service stations were already regulated, Compton says. They also contested that it would be difficult to differentiate between gas stations and the businesses that serviced vehicles. Because ASA's collision members were the primary force behind the original proposal, ASA elected to pursue the matter without the mechanical stipulations.

States' Requirements
Ohio is not the first state to implement such laws. New Jersey enacted a similar law in the early 1980s, and Florida rolled out its requirements four years ago.

Two objectives prompted Florida to modify its Motor Vehicle Repair Act and require mechanical and collision shops to file with the state, says Don Toomey, executive director of ASA of Florida. "One [reason] was to get a better handle on how many repair facilities there really are out there because nobody really knew," he says. "Number two, it was for enforcement reasons--so that complaints could be dealt with through the bureau if (the bureau) had some enforcement authority. If you don't require a license or a registration, what do you really use as an enforcement other than civil remedies?" Prior to Florida's requirements, all consumer complaints were directed to the state's attorneys office, where they received low priority, Toomey says. Now the Bureau of Motor Vehicle Repairs records complaints, and a number of shops with histories of problems have closed as a result.

Florida shops pay registration fees ranging from $50 to $300, depending on the number of employees. Businesses performing only minor repairs pay $25 fees. In addition to logging the names and addresses of the state's shops, the legislation outlines regulations for preparing repair estimates. A provision also channels up to 10 percent of the program's annual proceeds into a fund that provides financial aid to individuals for technical training.

ASA of New Jersey is working to add minimum equipment and education requirements to its registration law. But as the legislation exists, collision shop owners are required to file annually with the state and clear certain criminal background checks as well as show proof of occupancy permits and tax and unemployment registration numbers. New Jersey shops are also bound by written estimate regulations. Annual license fees are $350 plus a $20 application fee. "The shops in the state really did want to get rid of the guys that were doing backyard shops and maybe doing some unethical things," says Cindy Tursi, ASA of New Jersey's executive director. "If you're a licensed shop, the state knows where you are. They have your number."

Image Booster
Whether these programs have improved the image of the industry is questionable. Tursi believes the laws need to impose additional standards, such as the educational and equipment measures ASA of New Jersey is proposing.

"The consumers I have talked to have been glad that this bureau exists because it does give them some recourse," Toomey says. "Whether it has actually changed the perception of the industry, I don't know. My inclination is to say probably not. There are still a lot of consumers out there that, unless they talk to somebody like myself, don't even know that the bureau is even there."

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