Feb. 20, I testified before the U.S. Small Business Administration's Region III Regulatory Fairness Board to discuss the Automotive Service Association's concerns on paint product control.

During my testimony I explained the problems we face with an imbalance in our marketplace for repair shops that comply with environmental, consumer and worker safety laws and those that do not. I asked the board to consider the unfairness or the lack of balance for those collision repairers complying with state and federal regulations having to compete with those businesses that do not provide adequate equipment or training to operate a safe and environmentally conscious collision repair business.

At the close of the hearing, the SBA assured me it would forward questions regarding this issue to both the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) for a formal response.

The complete transcript of my testimony follows:

Good afternoon, my name is Robert L. Redding Jr. I appreciate the opportunity to appear before you today. I am the Washington representative for the Automotive Service Association. The Automotive Service Association or ASA is the largest and oldest independent automotive repair organization in the United States. ASA is comprised of the owners of mechanical and collision repair facilities. These small businesses range in size from one-person facilities to national multiple shop corporations.

Our interest in participating in the hearing today revolves around what we believe is the "unfair" regulatory enforcement of several federal agencies. Like other small-business industries, we have concerns about "excessive enforcement" in some cases. But we see today as an opportunity to bring to your attention the problems we face with the imbalance in our marketplace for those repair shops that comply with environmental, consumer and worker safety laws and those that do not. The proliferation of unscrupulous or illegal collision repair facilities is a tremendous financial burden on those repairers striving to do what is right in the eyes of the law. Enforcing these laws on illegal shops has not been effective. These shops are too transient and are capable of avoiding the already over-burdened, understaffed law enforcement agencies. ASA believes controlling one of the most important products used in the repair can impede the growth of the illegal repair industry and have positive implications on the environment. That product is paint.

The collision industry is a very complex market. In addition to the traditional small business issues faced by other small businesspersons, we impact the environment and are easy prey for criminal elements. Stolen parts are readily accessible in our marketplace. We also have similar insurance industry influence as the health care field. With these additional burdens, the life of collision repairers can be quite difficult.

I am here today not to argue for less regulatory enforcement - whether it be directly on our industry from the U.S. Environmental Protection Agency or the U.S. Department of Labor's Occupational Safety and Health Administration, or relief from state laws and regulations created as a result of federal mandates. I am here to ask you to consider the "unfairness" or the lack of balance for those collision repairers complying with federal and state regulations having to compete with those businesses that do not provide adequate equipment or training to operate a safe and environmentally conscious collision repair business.

Seldom does a week go by without a local news show highlighting a "chop shop" bust or a consumer "rip-off" in the collision repair industry. Under our current system, this will not be deterred. Whether the collision repair facility is operating to process stolen vehicles or merely a second income facility operated with poor equipment and no training for employees, the impact on the consumer, the worker and the environment is the same.

A recent crackdown on collision repair facilities in South Florida highlighted the degree of the problem. Multiple shops were operating out of mini-warehouse complexes without state business licenses. Federal, state and local laws were being violated. Automotive refinishing products have serious implications for air quality without the proper equipment. The disposal of these same products could harm the public water supply. Recent studies by the Yale University School of Medicine, at the request of the National Institute for Occupational Safety and Health, confirms that without the proper equipment and training, collision repair employees are at risk in the workplace. These same unscrupulous repairers provide a disposal place for stolen auto parts. Thus, a final resting place for the chop shop system.

Our repairers spend hundreds of thousands of dollars on spray booths, processes for handling toxic products and on formal employee training. Despite high salaries, we compete in a difficult marketplace for labor. We cannot continue to operate in a marketplace filled with persons who care little for consumers, worker health and safety or the environment.

The EPA is aware of the air and water quality issues relative to refinishing products. In August 1999 the EPA spelled out the equipment and training necessities for any collision repair facility. This was a result of an auto refinish voluntary product stewardship partnership with the industry, The National Institute for Occupational Safety and Health (NIOSH) and OSHA. OSHA, through several worker protection regulations, is also aware of the potential for worker risk without proper equipment and training. Unfortunately, enforcing these laws upon those repairers that are determined to operate outside the law is difficult in our current system.

In legislation introduced in the 107th Congress and referred to the U.S. Senate Judiciary Committee, the problems of unlawful collision shops were highlighted. The bill sought more federal funds to target chop shops. ASA served on the Federal Bureau of Investigation's advisory committee on stolen auto parts. The system established by the FBI will deter some trafficking in stolen vehicles and parts but will not prevent the trade of these parts with businesses that continue to operate "under the radar."

What is the solution? The Ozone Transport Commission, which includes this SBA Region III, has proposed an auto refinishing product control program for the northeast United States. The state of Pennsylvania already has a control program in place. This proposal is not strong enough and we believe has not been effective in the state of Pennsylvania as far as protecting the environment, the consumer and our work force.

The only way to ensure that collision repairers have the proper equipment and training to operate a business is to control the sale of paint. If you look at the labels for automotive refinishing products, they clearly state "for professional use only." We believe this statement should hold true. Under current law, you and I can leave here today and legally purchase these refinishing products for our own use without any requirement for the proper equipment or training to use the product.

At the point of automotive refinishing product sale, purchasers should have to produce documentation that their establishment meets certain equipment and training requirements. Without this, our environment, our work force and vehicle owners as well as their property will continue to be at risk.

We have brought this issue to the attention of the EPA and OSHA on numerous occasions to no avail. It would be helpful if you could include in your report the need for a more balanced regulation of the collision repair industry, which can only be obtained through controlling paint products.

ASA will continue to follow this issue.

Bob Redding is the Automotive Service Association's Washington, D.C., representative. He is a member of several federal and state advisory committees involved in the automotive industry. For more information about the legislative activities of ASA, visit www.TakingTheHill.com.

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