NLA Update: Operator seminar, gas guzzler tax & risk retention

LCT Staff
Posted on July 1, 1986

The National Limousine Association held its first educational Seminar on May 22 and 23 in Washington, D.C., home of the NLA. The program was a success according to the association. The seminar consisted of six workshops which allowed participants an opportunity to learn about the limousine industry, discuss major issues affecting limousines, and become more familiar with effective management techniques. In attendance were approximately one hundred limousine owners, operators, manufacturers and suppliers from all over the country.

The first of two seminar days started with a continental breakfast sponsored by the Lincoln-Mercury Division. This was followed by the keynote speaker, Congressman Bill Boner. Congressman Boner is Chairman of the Tourism Caucus of the House of Representatives. His speech focused on limousines and the tourism industry. The Spring Seminar coincided with the NLA’s participation in National Tourism Week (May 18 - May 24).

The first topical session was on in­surance and speakers included such experts as Mr. Jay Angloff, General Counsel for the National Insurance Consumer Organization, Mr. Ron Beaupre, Vice President of Glenn Miller and Associates, and Mr. Leslie Cheek III of Crum & Forster Insurance Companies.

A question and answer session followed in which participants raised specific concerns with the representatives of the insurance industry. The panel encouraged the NLA in its efforts to compile national statistics for the limousine industry to use as a tool for achieving lower insurance premiums.

The next session focused on chauffeur training. Two NLA Board members, Eric J. Corveleyn of A. Harrington Limousine Service in Rahway, NJ and Alan B. Fisher of London Livery Ltd. Limousines in New Orleans were the speakers. Mr. Corveleyn and Mr. Fisher discussed techniques they have developed for use in chauffeur training.

Session three was on “Managing a Limousine Company.” This session incorporated new strategies for operating such as the use of computers, cellular telephones and outside resources for accounting and billing. Also discussed were the differing management techniques used in large and small limousine companies.

The fourth session explored the topic of regulatory issues. Federal regulations were discussed by representatives from the Interstate Commerce Commission and the Department of Transportation. The NLA General Counsel, Jeffrey Berger, addressed national issues. State and local regulatory processes were discussed by NLA members active in local limousine associations in Connecticut and the District of Columbia.

One of the most popular sessions was conducted by Dr. Ron Hill, Ph.D., Assistant Professor of Marketing at The American University. Dr. Hill discussed promotional ideas and offered suggestions for ways of creatively marketing a limousine service.

The second day of the Seminar was highlighted the NLA-sponsored luncheon which featured Congressman Ron Wyden, sponsor of risk retention legislation pending in the U.S. House of Representatives. After discussing the insurance premium relief that passage of this bill would be, Congressman Wyden received a standing ovation.

The final session was a panel discussion with coachbuilders and manufacturers. Companies represented on the panel were Lincoln-Mercury Division, Cadillac Motor Division, Empire Coach, APC/American Pullman Coach- builders, and American Custom Coach. Among the topics addressed were “Future trends for limousines.”

Plans for a Fall Seminar in New Orleans are underway, with dates and details to be announced in the near future.

NLA Continues Gas Guzzler Fight

The National Limousine Association (NLA) has scored its first victory against application of the Gas Guzzler tax to the limousine industry - but the battle is far from won. A proposed tax amendment would make the average coach-builder retroactively liable back to 1980 for approximately $500,000 per year. In 1987, and thereafter, each limousine sold would cost the coach-builder and ultimately the operator an additional $500 to $3,850 depending on gas mileage. To fight this amendment, the NLA formed a coach-builders task force which so far includes Allen Coachworks, Armbruster/Stageway, American Custom Coach, Dillinger/Gaines, DaBryan Coach, Empire Coach, Eureka, Marquis Coach Crafters, and Tri-State.

NLA General Counsel, Jeffrey L. Berger of Finley, Kumble, Wagner, has been lobbying against the Gas Guzzler amendment on behalf of the limousine industry. Rolls Royce and General Motors also oppose the amendment.

On May 6, the Senate Finance Committee dropped the amendment from the Senate proposal. Senators are threatening, however, to put the amendment back into the law when it comes up for full Senate vote. Moreover, the amendment is still in the House tax bill.

The Gas Guzzler tax is designed to force the automobile industry to make vehicles more fuel efficient. Manufacturers must pay a per vehicle tax for those vehicles that do not meet economy standards. Under existing law, automobiles are covered if their “loaded” weight, with passengers and cargo, is 6,000 pounds or less. Thus Rolls Royce automobiles, General Motors station wagons, and limousines whose loaded weights exceed 6,000 pounds are not presently covered.

Those in favor of amending the law want to apply the tax to Rolls Royce cars and General Motors station wagons back to 1980 by changing the language to cover vehicles whose “unloaded” weight is 6,000 pounds or less. Since unloaded limousines weigh less than 6,000 pounds, they would also be covered under the amendment.

The NLA’s position is that limousine converters have no ability to improve the fuel-efficiency of the cars that they “stretch,” and should not be covered by the law. Moreover, unlike automobile manufacturers, the limousine industry is made up of small businesses who could not with stand the economic shock of the Gas Guzzler tax.

The NLA feels that there is a critical need for the limousine industry to protect itself by providing both financial and personal support for the NLA’s lobbying effort. Coachbuilders and operators are needed to contact and meet with key Senators and Congressmen to oppose the Gas Guzzler amendment.

Congress Responds to the Insurance Crisis

In his address at the NLA Seminar in Washington, D.C on May 23rd, Congressman Ron Wvden of Oregon urged the limousine industry to get involved in the political process. Congressman Wyden introduced H.R. 4301 which would allow groups and associations like the NLA to form risk pool insurance companies on a national scale. H.R. 4301 would expand the Product Liability Risk Retention Act of 1981.

On March 18, Congressman Wyden introduced H.R. 4301 and, on the floor of the House of Representatives, said “I firmly believe that we must move quickly to pass this measure in order to avert certain doom for many of our business owners and professionals who stand to lose everything before this crisis is over.” H.R. 4301 is currently pending in the House of Representatives Committee on Energy and Commerce. The Subcommittee on Commerce, Transportation and Tourism held a hearing on June 19 on insurance companies insolvencies and a tentative hearing on risk retention legislation was planned for June 24.

On the Senate side, the Senate version of H.R 4301 is S 2129 which was introduced by Senator Bob Kasten of Wisconsin. S 2129 passed the Senate Committee on Commerce, Science and Transportation by a vote of 14 to 2. As of this writing, S 2129 is up for a vote on the Senate floor. S 2129 has a number of amendments which water down the original bill. In essence, the amendments would make it more difficult to establish risk retention pools. The National Limousine Association is advising the limousine industry to support S 2129 in its unamended form. The NLA does not support the amendments attached to S 2129.

Without the passage of H.R. 4301 and S 2129, the possibility of organizations like the NLA starting a self- insurance program is remote. As it currently stands, a group or association can form a national insurance risk pool if capitalization criteria are met for all fifty states. Every state currently has their own regulations and financial requirements for establishment of a self-insurance program. If H.R. 4301 passes in its entirety, then only one state’s capitalization requirement would have to be met. The least difficult and lowest minimal requirement is the State of Vermont with a required $750,000 needed to start a self-insurance venture.

The NLA is encouraging the industry to write to their Senators and their Representatives. The NLA supports S 2129 without amendments on the Senate side and supports H.R. 4301 in its current form in the House of Representatives. When asked how the limousine industry can become involved on this issue, NLA Executive Director Cyndy Littlefield said, “We encourage limousine owners, operators, manufacturers and suppliers to write to their two Senators and Member of Congress. Tell your Senators that you support S 2129 without amendments. Then call or write to your Member of Congress and tell him or her that you fully support the passage of H.R. 4301. You can either write a letter, send a telegram, or give a call. If anyone needs assistance in contacting their elected officials, then call us. It is imperative that the limousine industry show Congress that we are tired of the insurance industry pricing livery operators out of business.”


Related Topics: gas guzzler tax, insurance policies, insurance rates, National Limousine Association

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