CERTIFICATION OF ENROLLMENT

SUBSTITUTE HOUSE BILL 2374

Chapter 174, Laws of 2020

66TH LEGISLATURE

2020 REGULAR SESSION

MOTOR VEHICLE DEALERS--SECONDARY PRODUCTS

EFFECTIVE DATE: June 11, 2020

SUBSTITUTE HOUSE BILL 2374

AS AMENDED BY THE SENATE

ByHouse Consumer Protection & Business (originally sponsored by Representatives Kirby, Vick, Ryu, Barkis, Young, Wylie, Doglio, Goodman, and Pollet)

AN ACT Relating to preserving the ability of auto dealers to offer consumers products not supplied by an auto manufacturer; amending RCW 63.14.043; and adding a new section to chapter 46.96 RCW.

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

NEW SECTION.  Sec. 1. A new section is added to chapter 46.96 RCW to read as follows:

(1) Notwithstanding the terms of a franchise agreement, a brand owner shall not directly or indirectly:

(a) Require a new motor vehicle dealer to offer a secondary product;

(b) Require a new motor vehicle dealer to provide a customer with a disclosure not otherwise required by law; or

(c) Prohibit a new motor vehicle dealer from offering a secondary product including, but not limited to:

(i) Service contracts;

(ii) Maintenance agreements;

(iii) Extended warranties;

(iv) Protection product guarantees;

(v) Guaranteed asset protection waivers;

(vi) Insurance;

(vii) Replacement parts;

(viii) Vehicle accessories;

(ix) Oil; or

(x) Supplies.

(2) It is not a violation of this section for a brand owner to offer an incentive program to new motor vehicle dealers to encourage them to sell or offer to sell a secondary product approved, endorsed, sponsored, or offered by the brand owner, provided the program does not provide vehicle sales or service incentives.

(3) It is not a violation of this section for a brand owner to prohibit a new motor vehicle dealer from using secondary products for any repair work paid for by the brand owner under the terms of a warranty, recall, service contract, extended warranty, maintenance plan, or certified preowned vehicle program established or offered by the brand owner.

(4) For the purposes of this section:

(a) "Brand owner" means a manufacturer, distributor, factory branch, factory representative, agent, officer, parent company, wholly or partially owned subsidiary, affiliate entity, or other person under common control with a factory, importer, or distributor.

(b) "Common control" has the same meaning as in RCW 48.31B.005.

(c) "Customer" means the retail purchaser of a vehicle or secondary product from a new motor vehicle dealer.

(d) "Original equipment manufacturer parts" means parts manufactured by or for a vehicle's original manufacturer or its designee.

(e) "Secondary product" means all products that are not new motor vehicles or original equipment manufacturer parts.

Sec. 2. RCW 63.14.043 and 2006 c 288 s 1 are each amended to read as follows:

(1) If a retail installment contract for the purchase of a motor vehicle meets the requirements of this chapter and meets the requirements of any federal law applicable to a retail installment contract for the purchase of a motor vehicle, the retail installment contract shall be accepted for consideration by any lender, except for lenders licensed and regulated under the provisions of chapter 31.04 RCW, to whom application for credit relating to the retail installment contract is made.

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