Bill Summary – FastDemocracy

Enrolled Copy                                                                          H.B. 194
                       MOTOR VEHICLE DEALER REQUIREMENTS
                                       2023 GENERAL SESSION
                                            STATE OF UTAH
                                  Chief Sponsor: Colin W. Jack
                                   Senate Sponsor: Don L. Ipson
 6
 LONG TITLE
 General Description:
         This bill prohibits a motor vehicle dealer from charging a fee or charge in addition to
 the negotiated purchase price as a condition of the sale.
 Highlighted Provisions:
         This bill:
         < prohibits a motor vehicle dealer from requiring a purchaser to pay, as a condition of
 the sale, a fee or charge in addition to the negotiated purchase, other than:
             C   certain fees required by state or federal law;
             C   a dealer documentary service fee; and
             C   certain increases in price imposed by a manufacturer for semi-tractors with a
 gross vehicle weight rating over 14,000 pounds;
         < specifies the civil penalties for a violation;
         < requires a motor vehicle dealer to provide and execute a transaction disclosure
 form;
         < requires the State Tax Commission to create the transaction disclosure form; and
         < makes technical changes.
 Money Appropriated in this Bill:
         None
 Other Special Clauses:
         This bill provides a special effective date.
 Utah Code Sections Affected:
 AMENDS:
       H.B. 194                                                                       Enrolled Copy
        41-3-102, as last amended by Laws of Utah 2022, Chapter 455
        41-3-103, as last amended by Laws of Utah 2022, Chapter 455
        41-3-211, as enacted by Laws of Utah 2010, Chapter 342
        41-3-702, as last amended by Laws of Utah 2019, Chapter 424
 ENACTS:
        41-3-401.6, Utah Code Annotated 1953
36
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 41-3-102 is amended to read:
        41-3-102. Definitions.
        As used in this chapter:
        (1) "Administrator" means the motor vehicle enforcement administrator.
        (2) "Agent" means a person other than a holder of any dealer's or salesperson's license
 issued under this chapter, who for salary, commission, or compensation of any kind, negotiates
 in any way for the sale, purchase, order, or exchange of three or more motor vehicles for any
 other person in any 12-month period.
        (3) "Auction" means a dealer engaged in the business of auctioning motor vehicles,
 either owned or consigned, to the general public.
        (4) "Authorized service center" means an entity that:
        (a) is in the business of repairing exclusively the motor vehicles of the same line-make
 as the motor vehicles a single direct-sale manufacturer manufactures;
        (b) the direct-sale manufacturer described in Subsection (4)(a) authorizes to complete
 warranty repair work for motor vehicles that the direct-sale manufacturer sells, displays for
 sale, or offers for sale or exchange; and
        (c) conducts business primarily from an enclosed commercial repair facility that is
 permanently located in the state.
        (5) "Board" means the advisory board created in Section 41-3-106.
        (6) "Body shop" means a person engaged in rebuilding, restoring, repairing, or painting
                                                     -2-
       Enrolled Copy                                                                          H.B. 194
 the body of motor vehicles for compensation.
        (7) "Commission" means the State Tax Commission.
        (8) "Crusher" means a person who crushes or shreds motor vehicles subject to
 registration under Chapter 1a, Motor Vehicle Act, to reduce the useable materials and metals to
 a more compact size for recycling.
        (9) (a) "Dealer" means a person:
        (i) whose business in whole or in part involves selling new, used, or new and used
 motor vehicles or off-highway vehicles; and
        (ii) who sells, displays for sale, or offers for sale or exchange three or more new or
 used motor vehicles or off-highway vehicles in any 12-month period.
        (b) "Dealer" includes a representative or consignee of any dealer.
        (10) "Direct-sale manufacturer" means a person:
        (a) that is both a manufacturer and a dealer;
        (b) that is:
        (i) an electric vehicle manufacturer; or
        (ii) a low-volume manufacturer;
        (c) that is not a franchise holder;
        (d) that is domiciled in the United States; and
        (e) whose chief officers direct, control, and coordinate the person's activities as a
 direct-sale manufacturer from a physical location in the United States.
        (11) "Direct-sale manufacturer salesperson" means an individual who for a salary,
 commission, or compensation of any kind, is employed either directly, indirectly, regularly, or
 occasionally by a direct-sale manufacturer to sell, purchase, or exchange or to negotiate for the
 sale, purchase, or exchange of a motor vehicle manufactured by the direct-sale manufacturer
 who employs the individual.
        (12) (a) "Dismantler" means a person engaged in the business of dismantling motor
 vehicles subject to registration under Chapter 1a, Motor Vehicle Act, for the resale of parts or
 for salvage.
                                                       -3-
        H.B. 194                                                                          Enrolled Copy
           (b) "Dismantler" includes a person who dismantles three or more motor vehicles in any
 12-month period.
           (13) "Distributor" means a person who has a franchise from a manufacturer of motor
 vehicles to distribute motor vehicles within this state and who in whole or in part sells or
 distributes new motor vehicles to dealers or who maintains distributor representatives.
           (14) "Distributor branch" means a branch office similarly maintained by a distributor
 for the same purposes a factory branch is maintained.
           (15) "Distributor representative" means a person and each officer and employee of the
 person engaged as a representative of a distributor or distributor branch of motor vehicles to
 make or promote the sale of the distributor or the distributor branch's motor vehicles, or for
 supervising or contacting dealers or prospective dealers of the distributor or the distributor
 branch.
           (16) "Division" means the Motor Vehicle Enforcement Division created in Section
 41-3-104.
           (17) "Electric vehicle manufacturer" means a person that, in this state, sells, displays
 for sale, or offers for sale or exchange only new motor vehicles of the person's own line-make
 that are:
           (a) exclusively propelled through the use of electricity, a hydrogen fuel cell, or another
 non-fossil fuel source;
           (b) (i) passenger vehicles with a gross vehicle weight rating of 14,000 pounds or less;
 or
           (ii) trucks with a gross vehicle weight rating of 14,000 pounds or less; and
           (c) manufactured by the person.
           (18) "Factory branch" means a branch office maintained by a person who manufactures
 or assembles motor vehicles for sale to distributors, motor vehicle dealers, or who directs or
 supervises the factory branch's representatives.
           (19) "Factory representative" means a person and each officer and employee of the
 person engaged as a representative of a manufacturer of motor vehicles or by a factory branch
                                                        -4-
        Enrolled Copy                                                                              H.B. 194
 to make or promote the sale of the manufacturer's or factory branch's motor vehicles, or for
 supervising or contacting the dealers or prospective dealers of the manufacturer or the factory
 branch.
           (20) "Fleet transaction" means a licensee's sale of one or more motor vehicles to a
 manufacturer-approved current fleet customer under the manufacturer's fleet program.
           [(20)] (21) (a) "Franchise" means a contract or agreement between a dealer and a
 manufacturer of new motor vehicles or a manufacturer's distributor or factory branch by which
 the dealer is authorized to sell any specified make or makes of new motor vehicles.
           (b) "Franchise" includes a contract or agreement described in Subsection [(20)(a)]
 (21)(a) regardless of whether the contract or agreement is subject to Title 13, Chapter 14, New
 Automobile Franchise Act, Title 13, Chapter 35, Powersport Vehicle Franchise Act, or neither.
           [(21)] (22) (a) "Franchise holder" means a manufacturer who:
           (i) previously had a franchised dealer in the United States;
           (ii) currently has a franchised dealer in the United States;
           (iii) is a successor to another manufacturer who previously had or currently has a
 franchised dealer in the United States;
           (iv) is a material owner of another manufacturer who previously had or currently has a
 franchised dealer in the United States;
           (v) is under legal or common ownership, or practical control, with another
 manufacturer who previously had or currently has a franchised dealer in the United States; or
           (vi) is in a partnership, joint venture, or similar arrangement for production of a
 commonly owned line-make with another manufacturer who previously had or currently has a
 franchised dealer in the United States.
           (b) "Franchise holder" does not include a manufacturer described in Subsection
 [(21)(a),] (22)(a), if at all times during the franchised dealer's existence, the manufacturer had
 legal or practical common ownership or common control with the franchised dealer.
           [(22)] (23) "Low-volume manufacturer" means a manufacturer who:
           (a) in this state, sells, displays for sale, or offers for sale or exchange only new motor
                                                         -5-
        H.B. 194                                                                        Enrolled Copy
 vehicles of the person's own line make that are:
           (i) (A) passenger vehicles with a gross vehicle weight rating of 14,000 pounds or less;
 or
           (B) trucks with a gross vehicle weight rating of 14,000 pounds or less; and
           (ii) manufactured by the person; and
           (b) constructs no more than 325 new motor vehicles in any 12-month period.
           [(23)] (24) "Line-make" means motor vehicles that are offered for sale, lease, or
 distribution under a common name, trademark, service mark, or brand name of the
 manufacturer.
           [(24)] (25) "Manufacturer" means a person engaged in the business of constructing or
 assembling new motor vehicles, ownership of which is customarily transferred by a
 manufacturer's statement or certificate of origin, or a person who constructs three or more new
 motor vehicles in any 12-month period.
           [(25)] (26) "Material owner" means a person who possesses, directly or indirectly, the
 power to direct, or cause the direction of, the management, policies, or activities of another
 person:
           (a) through ownership of voting securities;
           (b) by contract or credit arrangement; or
           (c) in another way not described in Subsections [(25)(a)] (26)(a) and (b).
           [(26)] (27) (a) "Motor vehicle" means a vehicle that is:
           (i) self-propelled;
           (ii) a trailer;
           (iii) a travel trailer;
           (iv) a semitrailer;
           (v) an off-highway vehicle; or
           (vi) a small trailer.
           (b) "Motor vehicle" does not include:
           (i) mobile homes as defined in Section 41-1a-102;
                                                        -6-
        Enrolled Copy                                                                              H.B. 194
         (ii) trailers of 750 pounds or less unladen weight;
         (iii) a farm tractor or other machine or tool used in the production, harvesting, or care
 of a farm product; and
         (iv) park model recreational vehicles as defined in Section 41-1a-102.
         [(27)] (28) "Motorcycle" means the same as that term is defined in Section 41-1a-102.
         [(28)] (29) "New motor vehicle" means a motor vehicle that:
         (a) has never been titled or registered; and
         (b) for a motor vehicle that is not a trailer, travel trailer, or semitrailer, has been driven
 less than 7,500 miles.
         [(29)] (30) "Off-highway vehicle" means the same as that term is defined in Section
 41-22-2.
         [(30)] (31) "Pawnbroker" means a person whose business is to lend money on security
 of personal property deposited with him.
         [(31)] (32) (a) "Principal place of business" means a site or location in this state:
         (i) devoted exclusively to the business for which the dealer, manufacturer,
 remanufacturer, transporter, dismantler, crusher, or body shop is licensed, and businesses
 incidental to them;
         (ii) sufficiently bounded by fence, chain, posts, or otherwise marked to definitely
 indicate the boundary and to admit a definite description with space adequate to permit the
 display of three or more new, or new and used, or used motor vehicles and sufficient parking
 for the public; and
         (iii) that includes a permanent enclosed building or structure large enough to
 accommodate the office of the establishment and to provide a safe place to keep the books and
 other records of the business, at which the principal portion of the business is conducted and
 the books and records kept and maintained.
         (b) "Principal place of business" means, with respect to a direct-sale manufacturer, the
 direct-sale manufacturer's showroom, which shall comply with the requirements of Subsection
 [(31)(a).] (32)(a).
                                                        -7-
        H.B. 194                                                                       Enrolled Copy
         [(32)] (33) "Remanufacturer" means a person who reconstructs used motor vehicles
 subject to registration under Chapter 1a, Motor Vehicle Act, to change the body style and
 appearance of the motor vehicle or who constructs or assembles motor vehicles from used or
 new and used motor vehicle parts, or who reconstructs, constructs, or assembles three or more
 motor vehicles in any 12-month period.
         [(33)] (34) "Salesperson" means an individual who for a salary, commission, or
 compensation of any kind, is employed either directly, indirectly, regularly, or occasionally by
 any new motor vehicle dealer or used motor vehicle dealer to sell, purchase, or exchange or to
 negotiate for the sale, purchase, or exchange of motor vehicles.
         [(34)] (35) "Semitrailer" means the same as that term is defined in Section 41-1a-102.
         [(35)] (36) "Showroom" means a site or location in the state that a direct-sale
 manufacturer uses for the direct-sale manufacturer's business, including the display and
 demonstration of new motor vehicles that are exclusively of the same line-make that the
 direct-sale manufacturer manufactures.
         [(36)] (37) "Small trailer" means a trailer that has an unladen weight of:
         (a) more than 750 pounds; and
         (b) less than 2,000 pounds.
         [(37)] (38) "Special equipment" includes a truck mounted crane, cherry picker, material
 lift, post hole digger, and a utility or service body.
         [(38)] (39) "Special equipment dealer" means a new or new and used motor vehicle
 dealer engaged in the business of buying new incomplete motor vehicles with a gross vehicle
 weight of 12,000 or more pounds and installing special equipment on the incomplete motor
 vehicle.
         [(39)] (40) "Trailer" means the same as that term is defined in Section 41-1a-102.
         [(40)] (41) "Transporter" means a person engaged in the business of transporting motor
 vehicles as described in Section 41-3-202.
         [(41)] (42) "Travel trailer" means the same as that term is defined in Section
 41-1a-102.
                                                        -8-
        Enrolled Copy                                                                                H.B. 194
           [(42)] (43) "Used motor vehicle" means a vehicle that:
           (a) has been titled and registered to a purchaser other than a dealer; or
           (b) for a motor vehicle that is not a trailer, travel trailer, or semitrailer, has been driven
 7,500 or more miles.
           [(43)] (44) "Wholesale motor vehicle auction" means a dealer primarily engaged in the
 business of auctioning consigned motor vehicles to dealers or dismantlers who are licensed by
 this or any other jurisdiction.
           Section 2. Section 41-3-103 is amended to read:
           41-3-103. Exceptions to "dealer" definition -- Dealer licensed in other state --
 Direct-sale manufacturer -- Direct-sale manufacturer salesperson.
           Under this chapter:
           (1) (a) An insurance company, bank, finance company, company registered as a title
 lender under Title 7, Chapter 24, Title Lending Registration Act,