2005 Legislation
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HOUSE BILL NO. 183 – MV dealer, possess vehicle, proof


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Bill Status

H0183.........................................by TRANSPORTATION AND DEFENSE
MOTOR VEHICLE DEALERS - Amends existing law relating to licensing of motor
vehicle dealers and salesmen to provide that it is unlawful for a dealer to
display for sale, exchange, or sell any vehicle unless the dealer has
documentary evidence of his right of possession of every vehicle in his
02/11    House intro - 1st rdg - to printing
02/14    Rpt prt - to Transp
02/21    Rpt out - rec d/p - to 2nd rdg
02/22    2nd rdg - to 3rd rdg
02/28    3rd rdg - PASSED - 68-0-2
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon,
      Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
      Henderson, Jaquet, Jones, Kemp, Lake, LeFavour, Loertscher, Martinez,
      Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen,
      Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
      Rydalch, Sayler, Shepherd(2), Shepherd(8), Shirley, Skippen,
      Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills,
      Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Sali, Schaefer
    Floor Sponsor - Nonini
    Title apvd - to Senate
03/01    Senate intro - 1st rdg - to Transp
03/11    Rpt out - rec d/p - to 2nd rdg
03/14    2nd rdg - to 3rd rdg
03/15    3rd rdg - PASSED - 34-0-0, 1 vacancy
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst,
      Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson,
      Schroeder, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- (District 21 seat vacant)
    Floor Sponsor - Little
    Title apvd - to House
03/16    To enrol
03/17    Rpt enrol - Sp signed
03/18    Pres signed
03/21    To Governor
03/23    Governor signed
         Session Law Chapter 144
         Effective: 07/01/05

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 183
  1                                        AN ACT
  6        SESSION.
  7    Be It Enacted by the Legislature of the State of Idaho:
  8        SECTION 1.  That Section 49-1613, Idaho Code, be, and the same  is  hereby
  9    amended to read as follows:
 10        49-1613.  UNLAWFUL  ACTS  BY  LICENSEE.  (1)  It shall be unlawful for the
 11    holder of any license issued under the provisions of this chapter to:
 12        (a)  Intentionally publish or circulate any advertising which is  mislead-
 13        ing or inaccurate in any material particular or which misrepresents any of
 14        the products sold or furnished by a licensed dealer;
 15        (b)  Violate  any of the provisions of this chapter or any of the applica-
 16        ble rules;
 17        (c)  Knowingly purchase, sell or otherwise acquire or dispose of a  stolen
 18        vehicle;
 19        (d)  Violate  any  law  respecting commerce in vehicles or any lawful rule
 20        respecting commerce in vehicles promulgated by any licensing or regulating
 21        authority now existing or hereafter created by the laws of the state;
 22        (e)  Engage in the business for which the dealer is  licensed  without  at
 23        all times maintaining a principal place of business;
 24        (f)  Engage  in a type of business respecting the selling or exchanging of
 25        vehicles for which he is not licensed;
 26        (g)  Knowingly purchase a vehicle which has an altered or removed  vehicle
 27        identification  number  plate  or alter or remove a vehicle identification
 28        number plate;
 29        (h)  Violate any provision of this title or any rules promulgated;
 30        (i)  Violate any provision of the federal motor vehicle safety  standards,
 31        federal odometer laws or regulations; or
 32        (j)  Display for sale, exchange, or sell any vehicle for which the vehicle
 33        dealer  does  not hold title or consignment agreement or other documentary
 34        evidence  of  his  right  to  the  possession  of  every  vehicle  in  his
 35        possession.
 36        (2)  It shall be unlawful for any manufacturer licensed under this chapter
 37    to require, attempt to require, coerce, or attempt to coerce, any new  vehicle
 38    dealer in this state to:
 39        (a)  Order  or  accept  delivery  of  any  new vehicle, part or accessory,
 40        equipment or any other commodity not required by law which shall not  have
 41        been  voluntarily ordered by the new vehicle dealer. This paragraph is not
 42        intended to modify or supersede any terms or  provisions  of  a  franchise
 43        requiring  dealers  to  market a representative line of vehicles which the
  1        manufacturer or distributor is publicly advertising.
  2        (b)  Order or accept delivery of any new vehicle  with  special  features,
  3        accessories  or  equipment not included in the list price of such vehicles
  4        as publicly advertised by the manufacturer or distributor.
  5        (c)  Participate monetarily in an advertising campaign or contest,  or  to
  6        purchase  any promotional materials, training materials, showroom or other
  7        display decorations or materials at the expense of the dealer.
  8        (d)  Enter into any agreement with the manufacturer or to do any other act
  9        prejudicial to the dealer by threatening to terminate or  cancel  a  fran-
 10        chise  or  any  contractual  agreement existing between the dealer and the
 11        manufacturer. This paragraph is not intended to preclude the  manufacturer
 12        or  distributor from insisting on compliance with reasonable terms or pro-
 13        visions of the franchise or other contractual  agreement,  and  notice  in
 14        good  faith to any dealer of the dealer's violation of those terms or pro-
 15        visions shall not constitute a violation of the provisions of  this  chap-
 16        ter.
 17        (e)  Change the capital structure of the dealer or the means by or through
 18        which  the  dealer finances the operation of the dealership, provided that
 19        the dealer at all times meets any reasonable capital standards  determined
 20        by  the  manufacturer  in  accordance  with uniformly applied criteria. No
 21        change in the capital structure shall cause a change in the principal man-
 22        agement or have the effect of a sale of the franchise without the  consent
 23        of  the  manufacturer  or  distributor.  Consent shall not be unreasonably
 24        withheld.
 25        (f)  Refrain from participation in the management of,  investment  in,  or
 26        the acquisition of any other line of new vehicle or related products. This
 27        paragraph  does not apply unless the dealer maintains a reasonable line of
 28        credit for each make or line of new vehicle, and  the  dealer  remains  in
 29        compliance  with  any  reasonable  facilities requirements of the manufac-
 30        turer, and no change is made in the principal management  of  the  dealer-
 31        ship.
 32        (g)  Prospectively  assent  to  a release, assignment, novation, waiver or
 33        estoppel which would relieve any person from liability to  be  imposed  by
 34        this chapter or to require any controversy between a dealer and a manufac-
 35        turer, distributor, or representatives, to be referred to any person other
 36        than  the duly constituted courts of the state or the United States, or to
 37        the director, if that referral would be binding upon the dealer.
 38        (h)  Either establish or maintain exclusive facilities, personnel, or dis-
 39        play space.
 40        (i)  Expand facilities without a written guarantee of a sufficient  supply
 41        of  new vehicles so as to justify an expansion, in light of the market and
 42        economic conditions.
 43        (j)  Make significant modifications to an existing dealership or  to  con-
 44        struct a new vehicle dealership facility without providing a written guar-
 45        antee of a sufficient supply of new vehicles so as to justify modification
 46        or construction, in light of the market and economic conditions.
 47        (3)  It shall be unlawful for any manufacturer licensed under this chapter
 48    to:
 49        (a)  Delay,  refuse,  or fail to deliver new vehicles or new vehicle parts
 50        or accessories in a reasonable time, and in reasonable  quantity  relative
 51        to  the  dealer's  facilities and sales potential in the dealer's relevant
 52        market area, after acceptance of an order from a dealer having a franchise
 53        for the retail sale of any new vehicle sold or distributed by the manufac-
 54        turer, any new vehicle, parts or accessories to new vehicles as  are  cov-
 55        ered  by the franchise, if the vehicle, parts, or accessories are publicly
  1        advertised as being available for delivery or  actually  being  delivered.
  2        These  provisions  are not violated, however, if failure is caused by acts
  3        or causes beyond the control of the manufacturer.
  4        (b)  Refuse to disclose to any dealer handling the same line,  the  manner
  5        and mode of distribution of that line within the relevant market area.
  6        (c)  Obtain  money,  goods,  service,  or any other benefit from any other
  7        person with whom the dealer does business, on account of, or  in  relation
  8        to,  the  transaction  between the dealer and other person, other than for
  9        compensation for services  rendered,    unless  the  benefit  is  promptly
 10        accounted for, and transmitted to the dealer.
 11        (d)  Increase prices of new vehicles which the dealer had ordered for con-
 12        sumers  prior  to  the  dealer's  receipt  of  the  written official price
 13        increase notification. A sales contract signed by a consumer shall consti-
 14        tute evidence of each such order, provided that the  vehicle  is  in  fact
 15        delivered  to that customer. In the event of manufacturer price reductions
 16        or cash rebates paid to the dealer, the amount of any reduction or  rebate
 17        received  by a dealer shall be passed on to the private retail consumer by
 18        the dealer. Price reductions shall apply to all vehicles in  the  dealer's
 19        inventory  which  were  subject  to the price reduction. Price differences
 20        applicable to new model or series shall not be considered a price increase
 21        or price decrease. Price changes caused by the addition to  a  vehicle  of
 22        required  or  optional equipment, or revaluation of the United States dol-
 23        lar, in the case of foreign-make vehicles or components, or an increase in
 24        transportation charges due to increased rates imposed by a carrier,  shall
 25        not be subject to the provisions of this subsection.
 26        (e)  Release  to  any outside party, except under subpoena or as otherwise
 27        required by law or in an administrative, judicial or arbitration  proceed-
 28        ing involving the manufacturer or dealer, any business, financial, or per-
 29        sonal information which may be provided from time to time by the dealer to
 30        the manufacturer without the express written consent of the dealer.
 31        (f)  Deny  any  dealer the right of free association with any other dealer
 32        for any lawful purpose.
 33        (g)  Unfairly compete with a dealer in the same line make, operating under
 34        an agreement or franchise from the  aforementioned  manufacturer,  in  the
 35        relevant  market  area. A manufacturer shall not, however, be deemed to be
 36        competing when operating a dealership either temporarily for a  reasonable
 37        period,  or in a retail operation which is for sale to any qualified inde-
 38        pendent person at a fair and reasonable price, or  in  a  relationship  in
 39        which  an  independent person has made a significant investment subject to
 40        loss in the dealership and can reasonably expect to acquire full ownership
 41        of that dealership on reasonable terms and conditions.
 42        (h)  Unfairly discriminate among its  dealers  with  respect  to  warranty
 43        reimbursement.
 44        (i)  Unreasonably  withhold  consent to the sale, transfer, or exchange of
 45        the franchise to a qualified buyer capable of being licensed as  a  dealer
 46        in this state.
 47        (j)  Fail  to  respond in writing to a request for consent as specified in
 48        subsection (i) of this section within sixty (60)  days  of  receipt  of  a
 49        written  request  on the forms, if any, generally utilized by the manufac-
 50        turer or distributor for those purposes and containing the required infor-
 51        mation. Failure to respond shall be deemed to be consent to the request.
 52        (k)  Prevent or attempt to prevent, by contract or otherwise,  any  dealer
 53        from  changing  the  executive management control of the dealership unless
 54        the manufacturer, having the burden of proof, can show that the change  of
 55        executive  management  will result in executive management or control by a
  1        person or persons who are not of good moral character or who do  not  meet
  2        reasonable,  preexisting  and,  with  consideration given to the volume of
  3        sales and service of the dealership, uniformly  applied  minimum  business
  4        experience  standards. Where the manufacturer rejects a proposed change in
  5        executive management control, the manufacturer shall give  written  notice
  6        of his reasons to the dealer within sixty (60) days of notice to the manu-
  7        facturer  by  the dealer of  the proposed change; otherwise, the change in
  8        the executive management of the dealership shall be presumptively  consid-
  9        ered approved.
 10        (l)  Terminate,  cancel  or  fail to renew any franchise solely because of
 11        the death or incapacity of an owner who is not listed in the franchise  as
 12        one on whose expertise and abilities the manufacturer relied in the grant-
 13        ing of the franchise.
 14        (m)  Prevent  or  attempt  to prevent the dealer, by written instrument or
 15        otherwise, from either receiving the fair market value of  the  dealership
 16        in  a sale transaction, or from transferring the dealership to a spouse or
 17        legal heir, as specified in this chapter.
 18        (n)  Engage in  any  predatory  practice  or  discrimination  against  any
 19        dealer.
 20        (o)  Resort to or to use any false or misleading advertisement in the con-
 21        ducting of his business as a manufacturer or distributor in this state.
 22        (p)  Make  any  false  or misleading statement, either directly or through
 23        any agent or employee, in order to induce any dealer  to  enter  into  any
 24        agreement or franchise, or to take any action which is prejudicial to that
 25        dealer or his business.
 26        (q)  Require  or coerce dealers to participate in local or national adver-
 27        tising campaigns or contests or to require or coerce dealers  to  purchase
 28        promotional or display materials.
 29        (4)  It  is  unlawful for any manufacturer or any officer, agent or repre-
 30    sentative to coerce, or attempt to coerce, any dealer in this state  to  sell,
 31    assign  or  transfer  any  retail  installment sales contract, obtained by the
 32    dealer in connection with the sale by him in this state of new vehicles, manu-
 33    factured or sold by the manufacturer, to a specified finance company or  class
 34    of  such  companies,  or  to any other specified person, by any of the acts or
 35    means set forth, namely by:
 36        (a)  Any statement, suggestion, promise or threat  that  the  manufacturer
 37        will,  in any manner, benefit or injure the dealer, whether the statement,
 38        suggestion, threat or promise is express or implied or  made  directly  or
 39        indirectly;
 40        (b)  Any act that will benefit or injure the dealer;
 41        (c)  Any  contract,  or  any  express  or  implied offer of contract, made
 42        directly or indirectly to a dealer for handling new vehicles, on the  con-
 43        dition  that  the  dealer  sell, assign or transfer his retail installment
 44        sales contract in this state to a specified finance company  or  class  of
 45        such companies, or to any other specified person; or
 46        (d)  Any  express  or implied statement or representation made directly or
 47        indirectly that the dealer is under any  obligation  whatsoever  to  sell,
 48        assign  or  transfer  any of his retail sales contracts, in this state, on
 49        new vehicles manufactured or sold by that manufacturer to a  finance  com-
 50        pany  or  class  of  companies,  or other specified person, because of any
 51        relationship or affiliation between the manufacturer and a finance company
 52        or companies, or a specified person or persons.
 53        Any statement, threats, promises, acts, contracts or offers of  contracts,
 54    when  the effect may be to lessen or eliminate competition or tend to create a
 55    monopoly, are declared unfair trade practices and unfair methods  of  competi-
  1    tion, against the policy of this state, and are unlawful.
  2        (5)  It  is  unlawful for any manufacturer or agent or employee of a manu-
  3    facturer to use a written instrument, agreement, or waiver to attempt to  nul-
  4    lify  any  of  the  provisions  of  this  section, and such agreement, written
  5    instrument or waiver shall be null and void.
  6        (6)  It shall be unlawful, directly or indirectly, to impose  unreasonable
  7    restrictions  on  the  dealer  relative to the sale, transfer, right to renew,
  8    termination discipline, noncompetition covenants,  site  control  (whether  by
  9    sublease, collateral pledge of lease, or otherwise), right of first refusal to
 10    purchase, option to purchase, compliance with subjective standards  and asser-
 11    tion of legal or equitable rights.
 12        (7)  The  provisions  of this chapter shall apply to all written franchise
 13    agreements between a manufacturer and a dealer, including the franchise offer-
 14    ing, the franchise agreement, sales of goods, services or advertising,  leases
 15    or  mortgages  of  real or personal property, promises to pay, security inter-
 16    ests, pledges,  insurance  contract,  advertising  contract,  construction  or
 17    installation  contract, servicing contracts and all other agreements where the
 18    manufacturer has any direct or indirect interest.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE

                             RS 14833

The purpose of this legislation is to expand the requirement 
options of providing documentary evidence of vehicle 
ownership, for vehicles which are being held in inventory for 
resale, by licensed motor vehicle dealers.

                           FISCAL NOTE


Name:  Rep. Bob Nonini 
Phone: 332-1000
Name:  Denise Brennan, Idaho Automobile Dealers Association
Phone: 853-4668

STATEMENT OF PURPOSE/FISCAL NOTE                      H 183