AN ACT Relating to unlawful subleasing or brokering of motor vehicles; adding a new chapter to Title 19 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that the practices of unlawful subleasing or brokering of motor vehicles has a substantial negative impact on the state's financial institutions and other businesses engaged in the financing and leasing of motor vehicles.

NEW SECTION. Sec. 2. The legislature finds that the practice of unlawful subleasing or brokering of motor vehicles is a matter vitally affecting the public interest for the purpose of applying the Consumer Protection Act, chapter 19.86 RCW.

NEW SECTION. Sec. 3. The definitions set forth in this section apply throughout this chapter, unless the context requires otherwise:

(1) "Debtor" has the meaning set forth in RCW 62A.9-105(1)(d).

(2) "Motor vehicle" means a vehicle required to be registered under chapter 46.16 RCW.

(3) "Person" means an individual, company, firm, association, partnership, trust, corporation, or other legal entity.

(4) "Security agreement" has the meaning set forth in RCW 62A.9-105(1)(l).

(5) "Security interest" has the meaning set forth in RCW 62A.1-201(37).

(6) "Secured party" has the meaning set forth in RCW 62A.9-105(1)(m).

NEW SECTION. Sec. 4. Unlawful subleasing or brokering of motor vehicles is not reasonable in relation to the development and preservation of business. A violation of this chapter is an unfair or deceptive act in trade or commerce for the purpose of applying the Consumer Protection Act, chapter 19.86 RCW.

NEW SECTION. Sec. 5. (1) It is a violation of this chapter for a vehicle dealer, as defined in RCW 46.70.011(3), to engage in the unlawful brokering of motor vehicles.

(2) It is a violation of this chapter for a person to engage in the unlawful subleasing of motor vehicles.

NEW SECTION. Sec. 6. A dealer engages in an act of unlawful brokering of motor vehicles when the dealer fails to do all of the following:

(1) Pay off any balance due to the secured party on a vehicle acquired by the dealer, no later than the close of the second business day after the acquisition date of the vehicle; and

(2) Obtain a certificate of ownership under RCW 46.12.140 for each used vehicle kept in his or her possession unless that certificate is in the possession of the person holding a security interest in the dealer's inventory; and

(3) Transfer the certificate of ownership under RCW 46.12.120 upon sale of a motor vehicle.

NEW SECTION. Sec. 7. A person engages in an act of unlawful subleasing of a motor vehicle if all of the following conditions are met:

(1) The motor vehicle is subject to a lease contract or security agreement the terms of which prohibit the transfer or assignment of any right or interest in the motor vehicle or under the lease contract or security agreement; and

(2) The person is not a party to the lease contract or security agreement; and

(3) The person transfers or assigns or purports to transfer or assign any right or interest in the motor vehicle or under the lease contract or security agreement to any person who is not a party to the lease contract or security agreement; and

(4) The person does not obtain, before the transfer or assignment described in subsection (3) of this section, written consent to the transfer or assignment from the motor vehicle lessor in connection with a lease contract or from the secured party in connection with a security agreement; and

(5) The person receives compensation or some other consideration for the transfer or assignment described in subsection (3) of this section.

NEW SECTION. Sec. 8. (1) A person engages in an act of unlawful subleasing of a motor vehicle when the person is not a party to the lease contract or security agreement, and assists, causes, or arranges an actual or purported assignment as described in section 7 of this act.

(2) A dealer engages in an act of unlawful brokering of a motor vehicle when the dealer is not a party to the sale contract or security agreement, and assists, causes, or arranges an actual or purported transfer as described in section 6 of this act.

NEW SECTION. Sec. 9. Unlawful subleasing or brokering of a motor vehicle is a class C felony punishable under chapter 9A.20 RCW.

NEW SECTION. Sec. 10. A violation of this chapter constitutes an act of criminal profiteering, as defined in RCW 9A.82.010.

NEW SECTION. Sec. 11. (1) Any one or more of the following persons who suffers damage proximately resulting from one or more acts of unlawful motor vehicle subleasing or unlawful brokering may bring an action against the person who has engaged in those acts:

(a) A secured party;

(b) A debtor;

(d) A lessee;

(e) An actual or purported transferee or assignee;

(f) A guarantor of a lease or security agreement or a guarantor of a purported transferee or assignee.

(2) In an action for unlawful subleasing or unlawful brokering the court may award actual damages; equitable relief, including, but not limited to an injunction and restitution of money and property; reasonable attorneys' fees and costs; and any other relief that the court deems proper.

NEW SECTION. Sec. 12. (1) The actual or purported transfer or assignment, or the assisting, causing, or arranging of an actual or purported transfer or assignment, of any right or interest in a motor vehicle or under a lease contract or security agreement, by an individual who is a party to the lease contract or security agreement is not an act of unlawful subleasing of a motor vehicle and is not subject to prosecution.

(2) This chapter does not affect the enforceability of any provision of a lease contract or security agreement by a party thereto.

NEW SECTION. Sec. 13. The penalties under this chapter are in addition to any other remedies or penalties provided by law for the conduct proscribed by this chapter.

NEW SECTION. Sec. 14. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 15. Sections 1 through 14 of this act shall constitute a new chapter in Title 19 RCW.