H-2314.1
HOUSE BILL 2028
State of Washington 68th Legislature 2024 Regular Session
By Representatives Santos, Robertson, Ryu, Reeves, Chapman, Orwall,
and Sandlin
Prefiled 12/22/23. Read first time 01/08/24. Referred to Committee
on Consumer Protection & Business.
1 AN ACT Relating to manufacturer and new dealer franchise
2 agreements; and amending RCW 46.70.011, 46.70.180, 46.96.010,
3 46.96.105, 46.96.140, 46.96.185, and 46.96.230.
4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
5 Sec. 1. RCW 46.70.011 and 2016 sp.s. c 26 s 1 are each amended
6 to read as follows:
7 As used in this chapter:
8 (1) "Auction" means a transaction conducted by means of exchanges
9 between an auctioneer and the members of the audience, constituting a
10 series of oral invitations for offers for the purchase of vehicles
11 made by the auctioneer, offers to purchase by members of the
12 audience, and the acceptance of the highest or most favorable offer
13 to purchase.
14 (2) "Auction company" means a sole proprietorship, partnership,
15 corporation, or other legal or commercial entity licensed under
16 chapter 18.11 RCW that only sells or offers to sell vehicles at
17 auction or only arranges or sponsors auctions.
18 (3) "Buyer's agent" means any person, firm, partnership,
19 association, limited liability company, limited liability
20 partnership, or corporation retained or employed by a consumer to
21 arrange for or to negotiate, or both, the purchase or lease of a new
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 1 motor vehicle on behalf of the consumer, and who is paid a fee or
2 receives other compensation from the consumer for its services.
3 (4) "Department" means the department of licensing, which shall
4 administer and enforce the provisions of this chapter.
5 (5) "Director" means the director of licensing.
6 (6) "Established place of business" means a location meeting the
7 requirements of RCW 46.70.023(1) at which a vehicle dealer conducts
8 business in this state.
9 (7) "Listing dealer" means a used mobile home dealer who makes
10 contracts with sellers who will compensate the dealer for obtaining a
11 willing purchaser for the seller's mobile home.
12 (8) "Manufacturer" means any person, firm, association,
13 corporation, or trust, resident or nonresident, who manufactures or
14 assembles new and unused vehicles or remanufactures vehicles in whole
15 or in part, or who directly or indirectly through one or more
16 intermediaries, controls, is controlled by, or is under the common
17 direction and possesses direct or indirect power to direct or cause
18 the direction of the management and policies of such person, firm,
19 association, corporation, or trust, resident or nonresident, and
20 further includes the terms:
21 (a) "Distributor," which means any person, firm, association,
22 corporation, or trust, resident or nonresident, who in whole or in
23 part offers for sale, sells, or distributes any new and unused
24 vehicle to vehicle dealers or who maintains factory representatives.
25 (b) "Factory branch," which means a branch office maintained by a
26 manufacturer for the purpose of selling or offering for sale,
27 vehicles to a distributor, wholesaler, or vehicle dealer, or for
28 directing or supervising in whole or in part factory or distributor
29 representatives, and further includes any sales promotion
30 organization, whether a person, firm, or corporation, which is
31 engaged in promoting the sale of new and unused vehicles in this
32 state of a particular brand or make to vehicle dealers.
33 (c) "Factory representative," which means a representative
34 employed by a manufacturer, distributor, or factory branch for the
35 purpose of making or promoting for the sale of their vehicles or for
36 supervising or contracting with their dealers or prospective dealers.
37 (9) "Motor vehicle" means every vehicle which is self-propelled
38 and every vehicle which is propelled by electric power obtained from
39 overhead trolley wires, but not operated upon rails, and which is
40 required to be registered and titled under this title.
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 1 (10) "New motor vehicle" means any motor vehicle that is self-
2 propelled and is required to be registered and titled under this
3 title, has not been previously titled to a retail purchaser or
4 lessee, and is not a "used vehicle" as defined under RCW 46.04.660.
5 (11) "Principal place of business" means that dealer firm's
6 business location in the state, which place the dealer designates as
7 their principal place of business.
8 (12) "Recreational vehicle" means a travel trailer, motor home,
9 truck camper, or camping trailer that is primarily designed and used
10 as temporary living quarters, is either self-propelled or mounted on
11 or drawn by another vehicle, is transient, is not occupied as a
12 primary residence, and is not immobilized or permanently affixed to a
13 mobile home lot.
14 (13) "Retail vehicle dealer" means a vehicle dealer who may buy
15 and sell at both wholesale and retail.
16 (14) "Subagency" means any place of business of a vehicle dealer
17 within the state, which place is physically and geographically
18 separated from the principal place of business of the firm or any
19 place of business of a vehicle dealer within the state, at which
20 place the firm does business using a name other than the principal
21 name of the firm, or both.
22 (15) "Temporary subagency" means a location other than the
23 principal place of business or subagency within the state where a
24 licensed vehicle dealer may secure a license to conduct the business
25 and is licensed for a period of time not to exceed ((ten)) 10 days
26 for a specific purpose such as auto shows, shopping center
27 promotions, tent sales, exhibitions, or similar merchandising
28 ventures. No more than six temporary subagency licenses may be issued
29 to a licensee in any ((twelve-month)) 12-month period.
30 (16) "Vehicle" means and includes every device capable of being
31 moved upon a public highway and in, upon, or by which any persons or
32 property is or may be transported or drawn upon a public highway,
33 excepting devices moved by human or animal power or used exclusively
34 upon stationary rails or tracks.
35 (17) "Vehicle dealer" means any person, firm, association,
36 corporation, or trust, not excluded by subsection (18) of this
37 section, engaged in the business of buying, selling, listing,
38 exchanging, offering, brokering, leasing with an option to purchase,
39 auctioning, soliciting, or advertising the sale of new or used
40 vehicles, or arranging or offering or attempting to solicit or
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 1 negotiate on behalf of others, a sale, purchase, or exchange of an
2 interest in new or used motor vehicles, irrespective of whether the
3 motor vehicles are owned by that person. Vehicle dealers shall be
4 classified as follows:
5 (a) A "motor vehicle dealer" is a vehicle dealer that deals in
6 new or used motor vehicles, or both;
7 (b) A "mobile home and travel trailer dealer" is a vehicle dealer
8 that deals in mobile homes, park trailers, or travel trailers, or
9 more than one type of these vehicles;
10 (c) A "miscellaneous vehicle dealer" is a vehicle dealer that
11 deals in motorcycles or vehicles other than motor vehicles or mobile
12 homes and travel trailers or any combination of such vehicles;
13 (d) A "recreational vehicle dealer" is a vehicle dealer that
14 deals in travel trailers, motor homes, truck campers, or camping
15 trailers that are primarily designed and used as temporary living
16 quarters, are either self-propelled or mounted on or drawn by another
17 vehicle, are transient, are not occupied as a primary residence, and
18 are not immobilized or permanently affixed to a mobile home lot.
19 (18) "Vehicle dealer" does not include, nor do the licensing
20 requirements of RCW 46.70.021 apply to, the following persons, firms,
21 associations, or corporations:
22 (a) Receivers, trustees, administrators, executors, guardians, or
23 other persons appointed by, or acting under a judgment or order of,
24 any court; or
25 (b) Public officers while performing their official duties; or
26 (c) Employees of vehicle dealers who are engaged in the specific
27 performance of their duties as such employees; or
28 (d) Any person engaged in an isolated sale of a vehicle in which
29 that person is the registered or legal owner, or both, thereof; or
30 (e) Any person, firm, association, corporation, or trust, engaged
31 in the selling of equipment other than vehicles, subject to
32 registration, used for agricultural or industrial purposes; or
33 (f) A real estate broker licensed under chapter 18.85 RCW, or an
34 affiliated licensee, who, on behalf of another negotiates the
35 purchase, sale, lease, or exchange of a manufactured or mobile home
36 in conjunction with the purchase, sale, exchange, rental, or lease of
37 the land upon which the manufactured or mobile home is, or will be,
38 located; or
39 (g) Owners who are also operators of special highway construction
40 equipment, as defined in RCW 46.04.551, or of the highway
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 1 construction equipment for which a vehicle license and display
2 vehicle license number plate is required; or
3 (h) Any bank, trust company, savings bank, mutual savings bank,
4 savings and loan association, credit union, and any parent,
5 subsidiary, or affiliate thereof, authorized to do business in this
6 state under state or federal law with respect to the sale or other
7 disposition of a motor vehicle owned and used in their business; or
8 with respect to the acquisition and sale or other disposition of a
9 motor vehicle in which the entity has acquired an interest as a
10 lessor, lessee, or secured party; or
11 (i) Any person who is regularly engaged in the business of
12 acquiring leases or installment contracts by assignment, with respect
13 to the acquisition and sale or other disposition of a motor vehicle
14 in which the person has acquired an interest as a result of the
15 business.
16 (19) "Vehicle salesperson" means any person who for any form of
17 compensation sells, auctions, leases with an option to purchase, or
18 offers to sell or to so lease vehicles on behalf of a vehicle dealer.
19 (20) "Wholesale vehicle dealer" means a vehicle dealer who buys
20 vehicles from or sells vehicles to other Washington licensed vehicle
21 dealers.
22 Sec. 2. RCW 46.70.180 and 2022 c 182 s 211 are each amended to
23 read as follows:
24 Each of the following acts or practices is unlawful:
25 (1) To cause or permit to be advertised, printed, displayed,
26 published, distributed, broadcasted, televised, or disseminated in
27 any manner whatsoever, any statement or representation with regard to
28 the sale, lease, or financing of a vehicle which is false, deceptive,
29 or misleading, including but not limited to the following:
30 (a) That no down payment is required in connection with the sale
31 of a vehicle when a down payment is in fact required, or that a
32 vehicle may be purchased for a smaller down payment than is actually
33 required;
34 (b) That a certain percentage of the sale price of a vehicle may
35 be financed when such financing is not offered in a single document
36 evidencing the entire security transaction;
37 (c) That a certain percentage is the amount of the service charge
38 to be charged for financing, without stating whether this percentage
39 charge is a monthly amount or an amount to be charged per year;
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 1 (d) That a new vehicle will be sold for a certain amount above or
2 below cost without computing cost as the exact amount of the factory
3 invoice on the specific vehicle to be sold;
4 (e) That a vehicle will be sold upon a monthly payment of a
5 certain amount, without including in the statement the number of
6 payments of that same amount which are required to liquidate the
7 unpaid purchase price.
8 (2)(a)(i) To incorporate within the terms of any purchase and
9 sale or lease agreement any statement or representation with regard
10 to the sale, lease, or financing of a vehicle which is false,
11 deceptive, or misleading, including but not limited to terms that
12 include as an added cost to the selling price or capitalized cost of
13 a vehicle an amount for licensing or transfer of title of that
14 vehicle which is not actually due to the state, unless such amount
15 has in fact been paid by the dealer prior to such sale.
16 (ii) However, an amount not to exceed $200 per vehicle sale or
17 lease may be charged by a dealer to recover administrative costs for
18 collecting motor vehicle excise taxes, licensing and registration
19 fees and other agency fees, verifying and clearing titles,
20 transferring titles, perfecting, releasing, or satisfying liens or
21 other security interests, and other administrative and documentary
22 services rendered by a dealer in connection with the sale or lease of
23 a vehicle and in carrying out the requirements of this chapter or any
24 other provisions of state law.
25 (b) A dealer may charge the documentary service fee in (a) of
26 this subsection under the following conditions:
27 (i) The documentary service fee is disclosed in writing to a
28 prospective purchaser or lessee before the execution of a purchase
29 and sale or lease agreement;
30 (ii) The dealer discloses to the purchaser or lessee in writing
31 that the documentary service fee is a negotiable fee. The disclosure
32 must be written in a typeface that is at least as large as the
33 typeface used in the standard text of the document that contains the
34 disclosure and that is boldfaced, capitalized, underlined, or
35 otherwise set out from the surrounding material so as to be
36 conspicuous. The dealer shall not represent to the purchaser or
37 lessee that the fee or charge is required by the state to be paid by
38 either the dealer or prospective purchaser or lessee;
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 1 (iii) The documentary service fee is separately designated from
2 the selling price or capitalized cost of the vehicle and from any
3 other taxes, fees, or charges; and
4 (iv) Dealers disclose in any advertisement that a documentary
5 service fee in an amount up to $200 may be added to the sale price or
6 the capitalized cost.
7 For the purposes of this subsection (2), the term "documentary
8 service fee" means the optional amount charged by a dealer to provide
9 the services specified in (a) of this subsection.
10 (3) To set up, promote, or aid in the promotion of a plan by
11 which vehicles are to be sold or leased to a person for a
12 consideration and upon further consideration that the purchaser or
13 lessee agrees to secure one or more persons to participate in the
14 plan by respectively making a similar purchase and in turn agreeing
15 to secure one or more persons likewise to join in said plan, each
16 purchaser or lessee being given the right to secure money, credits,
17 goods, or something of value, depending upon the number of persons
18 joining the plan.
19 (4) To commit, allow, or ratify any act of "bushing" which is
20 defined as follows: Entering into a written contract, written
21 purchase order or agreement, retail installment sales agreement, note
22 and security agreement, or written lease agreement, hereinafter
23 collectively referred to as contract or lease, signed by the
24 prospective buyer or lessee of a vehicle, which:
25 (a) Is subject to any conditions or the dealer's or his or her
26 authorized representative's future acceptance, and the dealer fails
27 or refuses within the "bushing" period, which is four calendar days,
28 exclusive of Saturday, Sunday, or legal holiday, and prior to any
29 further negotiations with said buyer or lessee to inform the buyer or
30 lessee either: (i) That the dealer unconditionally accepts the
31 contract or lease, having satisfied, removed, or waived all
32 conditions to acceptance or performance, including, but not limited
33 to, financing, assignment, or lease approval; or (ii) that the dealer
34 rejects the contract or lease, thereby automatically voiding the
35 contract or lease, as long as such voiding does not negate
36 commercially reasonable contract or lease provisions pertaining to
37 the return of the subject vehicle and any physical damage, excessive
38 mileage after the demand for return of the vehicle, and attorneys'
39 fees authorized by law, and tenders the refund of any initial payment
40 or security made or given by the buyer or lessee, including, but not
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 1 limited to, any down payment, and tenders return of the trade-in
2 vehicle, key, other trade-in, or certificate of title to a trade-in.
3 Tender may be conditioned on return of the subject vehicle if
4 previously delivered to the buyer or lessee.
5 The provisions of this subsection (4)(a) do not impair,
6 prejudice, or abrogate the rights of a dealer to assert a claim
7 against the bu