FINAL BILL REPORT

SHB 1883

PARTIAL VETO

                                  C 287 L 88

BYHouse Committee on Transportation (originally sponsored by Representatives Walk and Prince)

Adjusting the scope of vehicle dealer regulations.

House Committe on Transportation

Senate Committee on Transportation

SYNOPSIS AS ENACTED

BACKGROUND:

In 1986 the Legislature revised many of the requirements of vehicle dealers.  The significant changes came in the form of increased requirements upon dealers with respect to place of business and a better definition of who is required to be a licensed dealer.  One requirement states that if a person sells more than five vehicles in a year or is involved in dealer activities a person is required to get a dealer's license.

An exemption was created in both the dealer definition and licensing requirements sections allowing financial institutions to sell vehicles.

Prior to the 1986 law, financial institutions had been authorized to sell vehicles that had been foreclosed on or repossessed.

SUMMARY:

The definition of dealer activity is clarified, and the brokering of new vehicles in this state is prohibited.

Language is added that clarifies that financial institutions may continue to sell their own vehicles, repossessions and vehicles at the end of a lease period.

Language is added to ascertain that financial institutions may cooperate with dealers licensed in Washington in organizing, promoting and financing dealer sales and leases.

VOTES ON FINAL PASSAGE:

      House 94   0

      Senate    47     0 (Senate amended)

      House 95   0 (House concurred)

EFFECTIVE:June 9, 1988

Partial Veto Summary:  The governor vetoed Section 3 of the bill.  Section 3 would have prohibited leasing companies, and new car dealers who wish to lease other makes of vehicles outside of their franchise agreements, from leasing those new cars with an option to purchase.  Current law requires anyone in the business of selling new vehicles to provide the Department of Licensing with a copy of its current factory service agreement with the manufacturer or distributor.

In addition, Section 3 would have prohibited the practice of buyer's agents.  These agents negotiate vehicle purchases on behalf of the consumer for a fee.  (See VETO MESSAGE)