AutoNation 2007 Annual Report Download - page 9

Table of Contents
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Automotive and Other Laws and Regulations
We operate in a highly regulated industry. A number of state and federal laws and regulations affect our business. In every state in
which we operate, we must obtain various licenses in order to operate our businesses, including dealer, sales and finance, and insurance
licenses issued by state regulatory authorities. Numerous laws and regulations govern our conduct of business, including those relating to
our sales, operations, financing, insurance, advertising, and employment practices. These laws and regulations include state franchise
laws and regulations, consumer protection laws, privacy laws, escheatment laws, anti-money laundering laws, and other extensive laws
and regulations applicable to new and used motor vehicle dealers, as well as a variety of other laws and regulations. These laws also
include federal and state wage-hour, anti-discrimination, and other employment practices laws.
Our financing activities with customers are subject to federal truth-in-lending, consumer leasing, and equal credit opportunity laws
and regulations as well as state and local motor vehicle finance laws, leasing laws, installment finance laws, usury laws, and other
installment sales and leasing laws and regulations, some of which regulate finance and other fees and charges that may be imposed or
received in connection with motor vehicle retail installment sales and leasing. Claims arising out of actual or alleged violations of law may
be asserted against us or our stores by individuals, a class of individuals, or governmental entities and may expose us to significant
damages or other penalties, including revocation or suspension of our licenses to conduct store operations and fines.
Our operations are subject to the National Traffic and Motor Vehicle Safety Act, Federal Motor Vehicle Safety Standards
promulgated by the United States Department of Transportation, and the rules and regulations of various state motor vehicle regulatory
agencies. The imported automobiles we purchase are subject to United States customs duties and, in the ordinary course of our business
we may, from time to time, be subject to claims for duties, penalties, liquidated damages, or other charges.
Environmental, Health, and Safety Laws and Regulations
Our operations involve the use, handling, storage, and contracting for recycling and/or disposal of materials such as motor oil and
filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products, lubricants, degreasing agents, tires,
and fuel. Consequently, our business is subject to a complex variety of federal, state, and local requirements that regulate the environment
and public health and safety.
Most of our stores utilize aboveground storage tanks, and to a lesser extent underground storage tanks, primarily for petroleum-
based products. Storage tanks are subject to periodic testing, containment, upgrading, and removal under the Resource Conservation and
Recovery Act and its state law counterparts. Clean-up or other remedial action may be necessary in the event of leaks or other discharges
from storage tanks or other sources. In addition, water quality protection programs under the federal Water Pollution Control Act
(commonly known as the Clean Water Act), the Safe Drinking Water Act, and comparable state and local programs govern certain
discharges from some of our operations. Similarly, certain air emissions from operations, such as auto body painting, may be subject to
the federal Clean Air Act and related state and local laws. Certain health and safety standards promulgated by the Occupational Safety
and Health Administration of the United States Department of Labor and related state agencies also apply.
Some of our stores are parties to proceedings under the Comprehensive Environmental Response, Compensation, and Liability Act,
or CERCLA, typically in connection with materials that were sent to former recycling, treatment, and/or disposal facilities owned and
operated by independent businesses. The remediation or clean-up of facilities where the release of a regulated hazardous substance
occurred is required under CERCLA and other laws.
We incur significant costs to comply with applicable environmental, health, and safety laws and regulations in the ordinary course
of our business. We do not anticipate, however, that the costs of such compliance will have a material adverse effect on our business,
results of operations, cash flows, or financial
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