HOUSE BILL REPORT
SHB 2208
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
As Amended by the Senate
Title: An act relating to the return or cancellation of new motorsports vehicles.
Brief Description: Prohibiting new motorsports vehicle dealers from having to pay a fee for canceling orders of new motorsports vehicles.
Sponsors: House Committee on Commerce & Labor (originally sponsored by Representatives Hope, Kristiansen, Newhouse and McCune).
Brief History:
Committee Activity:
Commerce & Labor: 2/17/09, 2/20/09 [DPS].
Floor Activity
Passed House: 3/5/09, 97-0.
Senate Amended.
Passed Senate: 4/17/09, 38-5.
Brief Summary of Substitute Bill |
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HOUSE COMMITTEE ON COMMERCE & LABOR |
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 8 members: Representatives Conway, Chair; Wood, Vice Chair; Condotta, Ranking Minority Member; Chandler, Crouse, Green, Moeller and Williams.
Staff: Alison Hellberg (786-7152)
Background:
Many aspects of the franchise relationship between motorsports vehicle manufacturers and motorsports vehicle dealers are regulated by the Department of Licensing. "Motorsports vehicles" are defined as motorcycles, mopeds, snowmobiles, personal watercraft, and four-wheel all-terrain vehicles.
State law establishes unfair trade practices in the manufacturer-dealer relationship. Motorsports manufacturers may not:
use confidential information from a dealer to compete against that dealer;
require a dealer to order or accept delivery of a motorsports vehicle or accessory;
fail to indemnify and hold a dealership harmless;
require dealers to transfer installment sales contracts to a manufacturer;
require franchise agreements to contain a right of first refusal;
raise prices without notice;
withhold consent to transfer any interest in a dealership; or
prevent a dealer from restructuring the capital or business structure of a dealership.
Summary of Substitute Bill:
An unfair trade practice is added to the enumerated list that prohibits manufacturers from requiring a dealer to pay a fee for canceling orders.
EFFECT OF SENATE AMENDMENT(S):
The provisions of the bill expire on August 1, 2009.
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill includes an emergency clause and takes effect immediately.
Staff Summary of Public Testimony:
(In support) Manufacturers require dealers to buy a year's order in advance. The manufacturers provide a "suggested" order and dealers are penalized for not ordering what is suggested. The last orders were made in September when the economic situation was not so bad. Manufacturers recently started charging fees for canceling orders. Sometimes the units have not been shipped or even manufactured yet. With the current economic situation the fees have become excessive. This bill would give a dealer some bargaining power. This is an economic catastrophe.
Small business is the backbone of the state's economy. Dealers are working hard to preserve family wage jobs with benefits, but the manufacturers are making this difficult. Many dealers have been paying fees in the amount of a person's salary.
Language in the bill should be added to include the return of parts, accessories, tools, and computers. Also, it should be in effect all of the time and not just when the unemployment rate is at 6 percent.
(Opposed) None.
Persons Testifying: Representative Hope, prime sponsor; Chris Paulson, Paulson’s Motorsports; Jim Powers, Lynnwood Motoplex; John Jabusch, ProCaliber Motorsports; and Bill Cameron, Skagit Powersports.
Persons Signed In To Testify But Not Testifying: None.