HOUSE BILL REPORT

HB 1883

BYRepresentatives Walk and Prince

Adjusting the scope of vehicle dealer regulations.

House Committe on Transportation

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (18)

      Signed by Representatives Walk, Chair; Baugher, Vice Chair; Betrozoff, Cantwell, Cooper, Doty, Fisher, Fox, Gallagher, Heavey, Jones, Meyers, D. Sommers, Sutherland, Vekich, J. Williams, K. Wilson and Zellinsky.

House Staff:Brad Lovaas (786-7307)

AS REPORTED BY COMMITTEE ON TRANSPORTATION FEBRUARY 4, 1988

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 you sell more than five vehicles in a year or are involved in dealer activities, you are 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 which are foreclosed upon or repossessed.

SUMMARY:

SUBSTITUTE BILL:  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 and repossessions.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Language is clarified that financial institutions may sell their repossessions, their own company vehicles, and vehicles at the end of a lease period.

Language is deleted and other language added that makes it clear that financial institutions may cooperate with licensed vehicle dealers in organizing, promoting, and financing dealer sales, as long as the financial institution does not broker vehicles.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Jim Boldt, Washington Auto Dealers.

House Committee - Testified Against:      Jim Byrne, Washington Credit Union League.

House Committee - Testimony For:    This is a clarification of what was intended in the 1986 law.  Financial institutions are given authority they had prior to that change.

House Committee - Testimony Against:      Cooperation is restricted between credit unions and dealers.