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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 possession. 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
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature First Regular Session - 2005 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 183 BY TRANSPORTATION AND DEFENSE COMMITTEE 1 AN ACT 2 RELATING TO LICENSING OF MOTOR VEHICLE DEALERS AND SALESMEN; AMENDING SECTION 3 49-1613, IDAHO CODE, TO PROVIDE THAT IT IS UNLAWFUL FOR A DEALER TO DIS- 4 PLAY FOR SALE, EXCHANGE, OR SELL ANY VEHICLE UNLESS THE DEALER HAS DOCU- 5 MENTARY EVIDENCE OF HIS RIGHT OF POSSESSION OF EVERY VEHICLE IN HIS POS- 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 2 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 3 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 4 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- 5 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 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 None Contact Name: Rep. Bob Nonini Phone: 332-1000 Name: Denise Brennan, Idaho Automobile Dealers Association Phone: 853-4668 STATEMENT OF PURPOSE/FISCAL NOTE H 183