Preproposal statement of inquiry was filed as WSR 98-10-071.

Title of Rule: Chapter 308-66 WAC, Motor vehicle dealers and manufacturers.

Purpose: Review of current rules to ensure necessity, effectiveness, efficiency, clarity, intent, coordination with other jurisdictions and agencies, cost benefits and fairness in accordance with Governor Gary Locke's Executive Order 97-02.

Statutory Authority for Adoption: RCW 46.70.160.

Summary: Review of current rules governing vehicle dealers and manufacturers.

Reasons Supporting Proposal: Governor's Executive Order 97-02 for WAC review.

Name of Agency Personnel Responsible for Drafting: Cal Sanders, Highways-Licenses Building, Olympia, (360) 902-3708; Implementation and Enforcement: Robert Smith, Highways-Licenses Building, Olympia, (360) 902-3703.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: To review current rules to ensure necessity, effectiveness, efficiency, clarity, intent, coordination with other jurisdictions and agencies, cost benefits and fairness in accordance with Governor Gary Locke's Executive Order 97-02.

Proposal Changes the Following Existing Rules: Several sections are changed in light of the review for necessity, effectiveness, clarity, intent, coordination with other agencies, cost benefits and fairness.

No small business economic impact statement has been prepared under chapter 19.85 RCW. This proposal was drafted in cooperation with industry and other stakeholders. The proposal does not impose additional duties on the industry.

RCW 34.05.328 does not apply to this rule adoption.

Hearing Location: Department of Licensing, Conference Room 406, 4th Floor, 1125 S.E. Washington Street, Olympia, WA, on September 22, 1998, at 9:00 a.m.-11:00 a.m.

Assistance for Persons with Disabilities: Contact Linda Mason by September 20, 1998, TDD (360) 664-8885, or (306) [(360)] 902-3710.

Submit Written Comments to: Gail Saul, Dealer Services, Department of Licensing, P.O. Box 9039, Olympia, WA 98507-9039, fax (360) 586-6703.

Date of Intended Adoption: September 30, 1998.

July 23, 1998

Evelyn P. Yenson

Director

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-110  Definitions. For the purpose of administering chapter 46.70 RCW, the following terms shall be construed in the following manner:

(1) "Offering" the sale of a vehicle shall include the distribution by any means of a list, with or without prices, of vehicles for sale.

(2) "Soliciting" the sale of a vehicle shall include an offer to effect the purchase or sale of a vehicle on behalf of another person.

(3) "Normal business hours" or "reasonable times" shall include, but not be limited to, the hours from 10:00 a.m. through 4:00 p.m. for five days each week. All hours during which the place of business is open for the purpose of bartering, trading or selling vehicles are normal business hours or reasonable times as long as the dealer is open for business at regular intervals. Whenever a dealer closes his place of business during normal business hours, a sign must be posted on the main door of the business stating the time that he will next be open for business or where he may be contacted.

(4) An "employee" of a dealer is a person on the payroll who appears on the record of the dealer as an employee for whom social security, withholding tax, and all deductions required by law have been made.

(5) A "broker" shall mean any person, partnership, corporation, or association acting independently, who for a commission, fee or any other form of compensation arranges or engages in the wholesale or retail purchase, sale or lease with option to purchase, of a vehicle.

(6) An "employee identification card" is a card that may be issued by a licensed dealer to an employee, identifying such employee as being in the employ of such dealer. The department will ((issue blank identification cards to licensed dealers on request)) prescribe the form of the card.

(7) A "demonstration permit" is a permit issued by a dealer to a prospective customer entitling the prospective customer to operate a particular vehicle for demonstration purposes.

(8) Current service agreement - The agreement between a vehicle manufacturer or vehicle distributor and a seller, stipulating that the seller will provide warranty adjustments for the owners of said manufacturer's or distributor's new vehicles which qualify for adjustments under the said manufacturer's or distributor's warranty.

(9) New vehicle warranty - The warranty extended by a manufacturer or distributor to the first retail purchaser.

(10) "Closing" shall mean the process of completion of sale transaction.

(11) "Completion of sale" in the case of a consigned vehicle shall mean purchaser has possession of vehicle, all liens against vehicle are paid, seller has sale proceeds, and warranty of title to vehicle has been accomplished.

(12) "Listing" shall mean a contract between a seller of a used mobile/manufactured home and a listing dealer for the dealer to locate a willing purchaser of that listed used mobile/manufactured home.

(13) "Seller," as it relates to listing dealers, shall mean a person who lists a used mobile/manufactured home with a listing dealer.

(14) "Purchaser," as it relates to listing dealers, shall mean a person who agrees to buy a used mobile/manufactured home listed through a listing dealer.

(15) "Consignment" shall mean an arrangement whereby a ((motor)) vehicle dealer accepts delivery or entrustment of a vehicle and agrees to sell the vehicle on behalf of another.

(16) "Consignee" shall mean a vehicle dealer who accepts delivery or to whom a ((motor)) vehicle is entrusted for the purpose of sale on behalf of another.

(17) "Consignor" shall mean a person who delivers or entrusts a vehicle to a dealer for the purpose of sale.

(18) "Remanufactured" shall mean to remake or reprocess into a finished product by a large scale industrial process.

(19) "Guaranteed title" as it relates to a consigned vehicle shall mean a guarantee by the consignor to convey title to the consignee upon sale of the vehicle. The consignment agreement between the consignor and consignee shall comply with the provisions of WAC 308-66-155.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-110, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 1986 c 199 § 1. 87-01-016 (Order DLR 115), § 308-66-110, filed 12/9/86; Order MV 170, § 308-66-110, filed 7/16/73; Order 70-08-04, § 308-66-110, filed 8/6/70; Order 69-1, § 308-66-110, filed 8/28/69; Order 2, § 308-66-110, filed 1/29/68.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-120  Dealer's license application. (1) Each application shall contain in addition to the information required by RCW 46.70.041:

(a) The names and residential addresses of all owners of ten percent or more of the assets of the firm ((and the names and addresses of managing employees));

(b) The name and address of the principal place of business of the firm;

(c) The names and addresses of each and every subagency of the firm, if any;

(d) A current balance sheet of assets and liabilities which shall have been prepared within ninety days of its submission;

(e) A statement of whether or not the applicant or any partner, member, officer, director, owner of ten percent or more of the assets of the firm, ((or managing employee,)) was the holder of a license issued pursuant to chapter 46.70 RCW which was revoked for cause and never reissued by the department, or which license was suspended for cause and the terms of the suspension have not been fulfilled;

(f) A detailed list of all dealerships previously operated by each person named on the application and with which each person presently or was formerly connected or employed.

(2) An applicant shall appear for a personal interview if requested by the department.

(3) The department may require a credit report for each party named on each application for a dealer's license.

(4) An applicant shall provide as evidence of leasehold or ownership interest of business location either:

(a) A copy of the rental or lease agreement between the applicant and landowner showing the business location by commonly known address, or

(b) A copy of the county assessor's record showing ownership of the business location, the applicant's name and the commonly known address.

(5) The bank reference for verifying financial condition consisting of:

(a) The name of applicant's bank, a person to contact at that bank concerning applicant's financial condition, or

(b) A letter of credit current within last 90 days, or

(c) A flooring agreement, if with a financial institution, or

(d) A line of credit with a financial institution.

(6) The department may require an applicant for a vehicle dealer license to provide evidence that the business location conforms to all zoning and land use ordinances.

(7) A corporation applicant shall provide the corporation number and corporation name issued by the secretary of state's office authorizing the company to do business within this state.

(8) The name and address on the license application and all required supporting documents must be the same. The sign at the certified location must identify the doing business as name (dba), if any, and that name shall appear on all documents as the applicant's name. The business telephone listing must also reflect the business name or the doing business as name.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-120, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 46.70.041. 91-20-057, § 308-66-120, filed 9/24/91, effective 10/25/91. Statutory Authority: RCW 46.70.160 and 1986 c 199 § 1. 87-01-016 (Order DLR 115), § 308-66-120, filed 12/9/86; Order MV 170, § 308-66-120, filed 7/16/73; Order 70-08-04, § 308-66-120, filed 8/6/70; Order 69-1, § 308-66-120, filed 8/28/69; Order 2, § 308-66-120, filed 1/29/68.]

AMENDATORY SECTION (Amending WSR 91-20-057, filed 9/24/91, effective 10/25/91)

WAC 308-66-140  Place of business and places of business. (1) A dealer shall advise the department of each and every:

(a) Name under which the firm does business, and

(b) Location at which the firm does business.

If there is any addition, deletion or change in the above, the dealer shall so inform the department within ten days of such action.

(2) A dealer shall designate one name and one location as the principal name and principal place of business of the firm.

(a) All other locations that are physically and geographically separated from the principal place of business shall be designated and licensed as subagencies of that dealership;

(b) All other names shall be designated and licensed as subagencies of that dealership;

(c) If a dealer is required to obtain a subagency license under (2)(a) of this section, he/she shall not be required to obtain an additional subagency license under (2)(b) of this section, unless he does business under more than one name at that location;

(3) The director shall fail to renew, suspend or revoke a subagency license of a dealership if the dealer ceases to maintain "an established place of business" at that subagency location.

(4) All temporary subagencies shall be covered by the bond of the dealer's principal place of business.

(5) A vehicle dealer that is unable to locate his/her used vehicle sales facilities adjacent to or at the established place of business need not obtain and hold a subagency license if:

(a) Vehicle sales lot is contained within the same city block, or

(b) Directly across the street, or

(c) Is within sight, and

(d) Location is zoned properly, and

(e) Dealer bond covers sales lot.

(6) If sales lot referred to in section 5 is in sight of the principal place of business, no sign is required at that sales lot.

(7) The department may require that a dealer provide evidence that each place of business conforms to all zoning and land use ordinances.

(8) Each and every subagency license of a dealership shall automatically be deemed cancelled upon the termination, for whatever reason, of the principal license of that dealership.

(9) No license shall be issued to any applicant for a vehicle dealer or vehicle manufacturer license under a name that is the same as that of any dealer or manufacturer holding a current license issued pursuant to chapter 46.70 RCW.

[Statutory Authority: RCW 46.70.160 and 46.70.023. 91-20-057, § 308-66-140, filed 9/24/91, effective 10/25/91. Statutory Authority: RCW 46.70.160 and 1986 c 199 § 1. 87-01-016 (Order DLR 115), § 308-66-140, filed 12/9/86; Order MV 170, § 308-66-140, filed 7/16/73; Order 69-1, § 308-66-140, filed 8/28/69; Order 2, § 308-66-140, filed 1/29/68.]

AMENDATORY SECTION (Amending Order DLR 115, filed 12/9/86)

WAC 308-66-145  Established place of business--Waiver procedure. (1) An applicant for a vehicle dealer license who requests a waiver of any established place of business requirement(s) must submit the following to the department:

(a) All required documents and fees for an original application as provided for in RCW 46.70.041, 46.70.061, 46.70.070, and WAC 308-66-120, with the exception of a leasehold agreement or evidence of real property ownership: Provided, That if a waiver is granted to the applicant, the applicant must provide evidence of leasehold or real property ownership to the department before the license will be issued.

(b) A written request for waiver, in the form of either a letter or a request completed on the department's prescribed form, which contains the following minimum information:

(i) Specific nature or type of activity the applicant intends to conduct,

(ii) Specific element(s) of the established place of business requirements requested to be waived,

(iii) ((A clear and concise)) Detailed statement which identifies the unique circumstances necessitating the request for waiver, and,

(iv) Any other information the department may require.

(2) A licensee who requests a waiver of any established place of business requirement(s) must submit the following to the department:

(a) All required documents and fees, as provided for in RCW 46.70.061 and WAC 308-66-140, with the exception of a leasehold agreement or evidence of real property ownership: Provided, That if a waiver is granted the licensee must provide evidence of leasehold or real property ownership to the department within thirty days of waiver approval.

(b) A written request for waiver, in the form of either a letter or a request completed on the department's prescribed form, which contains the following minimum information:

(i) Specific nature or type of activity the licensee intends to conduct,

(ii) Specific element(s) of the established place of business requirements requested to be waived,

(iii) ((A clear and concise)) Detailed statement which identifies the unique circumstances necessitating the request, and,

(iv) Any other information the department may require.

(3) Upon receipt by the department of all the required information, the director or the director's designee will review the request for waiver of any established place of business requirement(s) and issue a final determination in writing.

(4) A waiver granted under section (3) will remain in effect only as long as the unique circumstance(s) under which the waiver was originally granted have not changed or until the director lifts the waiver for cause.

[Statutory Authority: RCW 46.70.160 and 1986 c 199 § 1. 87-01-016 (Order DLR 115), § 308-66-145, filed 12/9/86.]

AMENDATORY SECTION (Amending WSR 91-03-019, filed 1/7/91, effective 2/7/91)

WAC 308-66-152  Unlawful practices. (1) Examples of unlawful acts or practices, as defined by RCW 46.70.180 (1)(a), include, but are not limited to representations such as "no down payment," "a dollar down," "five dollars down," "take-over payments," "no cash out of your pocket," "no cash needed," and others of similar nature if either secondary financing or initial payment of any amount, including factory rebates in excess of that represented, is required from the purchaser. A dealer's plan to have all or a portion of the selling price financed by a third party does not relieve the dealer of an obligation to refrain from this prohibited type of advertising. When any of these representations are made a payment disclosure shall be made as contained in subsection (6) of this section.

(2) Examples of unlawful acts or practices as defined by RCW 46.70.180 (1)(b), include, but are not limited to representations such as "one hundred percent financing" if the terms of the purchase involve more than one security agreement and payments to more than one financing institution. When collateral in addition to the vehicle is required, it shall be listed on the security agreement containing the vehicle's description, not on a separate agreement.

(3) It shall be considered false, deceptive or misleading, and thereby unlawful, to advertise with words, phrases, or initials which are not clear and conspicuous and easily comprehended by persons other than those closely allied with the vehicle industry.

(a) Clear and conspicuous within an advertisement shall mean:

(i) In the case of a television advertisement, the information required to be disclosed shall be completely disclosed audibly, visually, or a combination thereof.

(A) If made visually, shall be made in a type size sufficiently large to be read with reasonable ease; shall appear on the television screen for at least seven seconds; shall be in print type of a color or shade that contrasts readily with the background; shall not be obscured by other words or images appearing on the television screen; and

(B) If made audibly, shall be spoken with sufficient deliberateness, clarity, and volume so as to be understood by the average television listener; shall not be obscured by sounds which interfere with or distract from the disclosures being made.

(ii) In the case of a radio advertisement, the information required to be disclosed shall be spoken with sufficient deliberateness, clarity, and volume so as to be understood by the average radio listener; shall not be obscured by sounds which interfere with or distract from the disclosures being made.

(iii) In the case of a printed advertisement, the information required to be disclosed shall be made in a type size which shall be sufficiently large to be read with reasonable ease and shall be made in relatively close proximity to each of the terms which require that the disclosures be made; disclosures shall be made in such color and contrast so as not to be obscured by other words or pictures appearing in the advertisement.

(b) Examples of words, phrases, or initials which are not easily comprehended by persons other than those closely allied with the vehicle industry, and that may not be used without explaining their meaning in the same advertisement, include but are not limited to: Executive; capitalized cost reduction, o.a.c., c.f., f.o.b. The words annual percentage rate may be abbreviated to read A.P.R. or apr.

(4) Examples of false, deceptive or misleading, and thereby unlawful statements or representations within the meaning of RCW 46.70.180(1) include, but are not limited to:

(a) Advertising a used vehicle for sale that is not available at the time the advertisement is placed;

(b) Advertising a new vehicle as available for immediate delivery if it is available only on order;

(c) Advertising any offer in connection with the sale of a vehicle or model or type of vehicle without disclosing any material limitations, including, but not limited to, the time limit, or that there is no time limit on the offer;

(d) Advertising using a picture:

(i) Of a new vehicle which does not substantially show the same vehicle offered for sale; or

(ii) Of a used vehicle which is not the same vehicle offered for sale;

(e) Causing an advertisement to be placed by a dealer or dealer representative that does not identify the dealer by his/her complete business name, or by the word "dealer" or abbreviation "DLR";

(f) Incorporating in the dealer's name any term or designation which would have a tendency to mislead others as to the true nature of the business, such as the use of "wholesale," when a dealer's business is substantially retail, or "discount" when the price and policy of a dealer does not provide substantial discounts;

(g) Advertising a not-new vehicle manufactured less than two years prior to the date of the advertisement without designating the vehicle as "used," "demo," or "demonstrator." For purposes of adequate disclosure, the appropriate quoted term must be employed. Other descriptive words, such as "executive," "lease," or "rental" may be used in conjunction therewith, but not so as to create ambiguity as to whether a said vehicle is new, used, or a demonstrator.

(h) Advertising a "rebuilt vehicle" for sale with knowledge as defined in RCW 46.70.101 (1)(b)(xi) that the vehicle is rebuilt, without clearly and conspicuously disclosing "rebuilt" in the advertisement;

(i) Advertising a specific price for a specific vehicle or model or type of vehicle without designating the number of vehicles available at that price, and;

(i) Without clearly identifying the vehicles available by complete vehicle identification number, license plate number; or

(ii) Without clearly and conspicuously stating in the advertisement that such vehicle identification or license plate number for each advertised vehicle is available from the dealer upon request, and requiring that the dealer using this method of identifying vehicles keep the media advertising copy along with the vehicle identification number or license plate number of each advertised vehicle offered for a specific price. Such records shall be retained for one year following the advertisement. Dealers shall also date and post a written copy of the advertisement text and list of vehicle identification numbers or license plate numbers in a conspicuous public area at their place of business for the duration of the vehicle's availability at the advertised price: Provided, however, That a dealer need not designate the number of vehicles available or identify the vehicles available or state in the advertisement that the identification of advertised vehicles is available upon request if, in fact, an unlimited supply of such vehicles are available for immediate delivery;

(j) Selling a particular vehicle at a higher price than advertised, regardless of trade-in allowance;

(k) Adding charges, costs, or items to the advertised price, except those allowed by statute, other than the selling price of additional equipment ordered by the purchaser, sales tax, and license fees. "Additional equipment ordered by the purchaser" shall not include options already installed on the vehicle at the time of advertising;

(l) Expressing "advertised price" as a combination of:

(i) Dollar figures and words unless all component figures and the total dollar figure is expressed; or

(ii) Dollar figures and dollar figures unless all component figures and the total dollar figure is expressed;

(m) Advertising that a new vehicle or model or type of vehicle will be sold for a certain amount above or below invoice or cost without:

(i) Disclosing the actual dollar amount being referred to as "invoice";

(ii) Stating the final, total price for each vehicle, which may exclude sales taxes and license fees; and

(iii) Computing invoice as the actual cost to the dealer to get each vehicle from the manufacturer.

In computing "invoice" the dealer may include the actual cost of transportation of the vehicle from the manufacturer to the dealer, but must exclude dealer holdbacks, other manufacturer incentives, optional advertising fees, dealer overhead expenses, and other similar expenses;

(n) Advertising that a new or used vehicle is reduced in price from a former price, or that the advertised price is a percentage of dollar amount savings from a former price, or words to that effect, unless the seller actually recently advertised or has records showing that vehicle has been offered for sale at the former price;

(o) Advertising or offering:

(i) Any rebate that is not an authorized manufacturer's rebate paid directly to the consumer, which the consumer may apply to the purchase; and

(ii) Any manufacturer's rebate for which the manufacturer requires any financial participation by the dealer, without also clearly and conspicuously stating the following disclosure: "Dealer participation in this rebate program may increase vehicle price before rebate";

(p) Advertising that "any written price quote will be beaten," "any deal will be accepted," or that a dollar amount is guaranteed on any "push, pull or drag," trade-in, or words to that effect unless the dealer can clearly show through the records of the dealership that such is the case;

(q) Advertising a vehicle or model or type of vehicle as being available at "lowest cost," "best deal" or other words to that effect unless the dealer can clearly show through the records of the dealership that such is the case;

(r) Advertising an interest rate that is adjustable without clearly and conspicuously disclosing that the interest rate is adjustable;

(s) Advertising a vehicle or model or type of vehicle for sale at a financing rate which has been bought down by the dealer, without disclosing the actual annual percentage rate.

(5) No advertisement to aid, promote, or assist directly or indirectly any extension of credit may state:

(a) That a specific amount of credit or installment amount can be arranged unless the creditor usually and customarily arranges or will arrange credit amounts or installments for that period and in that amount; or

(b) That no down payment or that a specified down payment will be accepted in connection with any extension of credit unless the creditor usually and customarily accepts or will accept down payment in that amount.

(6) No advertisement to aid, promote, or assist directly or indirectly any credit sale of a vehicle shall state the amount or percentage of the down payment required, or that no down payment is required, the amount of any payment or the number of payments or the period of repayment, the amount of any finance charge or that there is no charge for credit, unless it states clearly and conspicuously all of the following items:

(a) The cash price or the amount of the loan as applicable;

(b) The amount or percentage of the down payment required, or that no down payment is required, as applicable;

(c) The number, amount, and frequency of payments scheduled to repay the indebtedness if the credit is extended;

(d) The amount of the finance charge expressed as an annual percentage rate;

(e) The deferred payment price or the sum of the payments as applicable;

(f) The specific model or type of vehicle(s) to which the advertised offer applies; and

(g) Any other conditions material to the advertised offer.

(7) Any advertisement to aid, promote, or assist directly or indirectly a consumer lease with option to purchase must state clearly that the advertisement offers a lease with option to purchase rather than a vehicle sale.

[Statutory Authority: RCW 46.70.180 and 46.70.160. 91-03-019, § 308-66-152, filed 1/7/91, effective 2/7/91. Statutory Authority: RCW 46.70.160 - 46.70.180. 90-20-086, § 308-66-152, filed 9/28/90, effective 10/29/90.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-155  Consignment. (1) Contract.

(a) It shall be considered an unlawful practice within the meaning of RCW 46.70.180 for a vehicle dealer to accept any vehicle on consignment without first reducing the consignment to writing.

(b) Minimum information required for consignment contracts.

(i) The names of the parties to the contract including the identity of the legal owner.

(ii) A statement by the consignor that the consignor guarantees to deliver the title to the consignee upon sale of the vehicle, as well as a statement by the consignor indicating the location of the title and the unpaid balance of the vehicle, if any.

(iii) The date of the consignment agreement.

(iv) The specific effective duration of the contract.

(v) The agreed upon price which the consignor will receive for his vehicle.

(vi) The description of the consigned vehicle, by make, model, vehicle identification number, and license number.

(vii) The signatures of the parties to the contract.

(viii) If no price has been specified in (v) above, then the minimum retail price and the commission, fee, or compensation to which the vehicle dealer will be entitled upon the sale of the consigned vehicle.

(2) In the event the dealer-consignee and the consignor shall deem it appropriate to vary the terms of the written contract, the dealer-consignee shall obtain written authorization from the consignor prior to the sale of the subject vehicle.

(3) Requirements for selling consigned vehicles.

(a) All funds received, including deposits or payments in full or proceeds from the sale of trade-ins, shall be placed in a trust account as required under RCW 46.70.180(9), and said funds shall remain in such trust account until the consignor's and the legal owner's interest, if any, have been fully satisfied as provided in the consignment agreement. It shall be considered an unlawful practice for a vehicle dealer or salesperson to commingle funds received on a consigned vehicle with the assets of the dealer and the salesperson until all terms of the agreement have been completed.

(b) The amount due a consignor ((after the)) from the date of completion of sale of the consigned vehicle shall be paid by the consignee immediately where title has been delivered to the purchaser, and in all cases shall be paid within ten days.

(c) ((Immediately following the sale of a consigned vehicle)) The dealer shall give to the consignor a copy of the purchase order used to complete the sale at the same time payment is made pursuant to (b) of this subsection.

(4) Consignee's duty to transfer title.

(a) The sale of consigned vehicles imposes the same duty under RCW 46.70.122 to the consignee to promptly execute the assignment and warranty of title as in any other sale.

(b) Prior to accepting a vehicle for consignment and offering it for sale, it shall be the duty of the consignee to verify or confirm the title location. Failure to do so shall be considered an unlawful and deceptive practice under RCW 46.70.180(1).

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-155, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 46.70.028. 91-20-057, § 308-66-155, filed 9/24/91, effective 10/25/91. Statutory Authority: RCW 46.70.160 and 1986 c 199 § 1. 87-01-016 (Order DLR 115), § 308-66-155, filed 12/9/86; Order MV-352, § 308-66-155, filed 3/4/76.]

AMENDATORY SECTION (Amending Order DLR 115, filed 12/9/86)

WAC 308-66-157  Listing. (1) Dealer responsibilities.

(a) The listing dealer shall be responsible for negotiating the agreement between seller and purchaser as follows:

(b) All written offers shall be presented to the seller for acceptance or refusal. A copy of the agreement shall be delivered to the purchaser immediately following the purchaser's signing.

(c) A copy of the offer to purchase shall be delivered to the seller immediately following seller's signing and acceptance of purchaser's offer.

(d) A copy of the agreement to purchase bearing the signature of the seller(s) shall be delivered to the purchaser as proof that the purchaser's offer was accepted.

(e) A legible copy of the agreement to purchase shall be retained in the listing dealer's files.

(f) A copy of the agreement between purchaser and dealer to disburse any funds from the trust account to pay liens against the used mobile/manufactured home shall be retained in the dealer's files.

(2) At the time the sale is closed, the listing dealer may pay outstanding liens out of the trust account prior to paying the sale proceeds to the seller.

[Statutory Authority: RCW 46.70.160 and 1986 c 199 § 1. 87-01-016 (Order DLR 115), § 308-66-157, filed 12/9/86.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-160  Dealer's and manufacturer's license plates. (1) When dealer's plates are used on any vehicle being demonstrated to a prospective customer, it is not necessary that the dealer or a member of his firm accompany the prospective customer except as provided in RCW 46.70.090. Prospective customers, when not accompanied by a dealer or member of his firm, shall be issued a demonstration permit by the dealer authorizing them to operate the vehicle for a period not to exceed seventy-two hours for the purpose of demonstration and possible purchase.

(2) When a dealer receives a vehicle bearing foreign license plates, such plates shall be covered by the dealer's plates while that vehicle is being demonstrated. Upon the sale of the vehicle, the foreign plates shall be removed and destroyed by the dealer prior to the delivery of the vehicle. When a foreign-plated vehicle is sold to a resident of the state whose plate is so displayed on the vehicle and the purchaser returns the vehicle immediately to his home state for use there and not in Washington, the dealer may deliver the vehicle with foreign plates attached if either one of two conditions is also met. The conditions are:

(a) The purchaser must have applied to his home state's vehicle licensing authority to register the vehicle in his own name, or

(b) The purchaser must have obtained a trip permit to move the vehicle from the dealer's place of business to his own state.

(3) An employee of a dealer shall carry an employee identification card when operating any vehicle bearing dealer's plates.

(4) Dealer's plates may not be used on any vehicle belonging to a member of the dealer's family.

(5) Dealer's plates may not be used on any vehicle owned by the dealer if such vehicle is used exclusively by members of the dealer's family.

(6) Vehicles bearing dealer's plates may not be loaned to the dealer's service customers.

(7) Dealers are required to provide ((reasonably)) accurate records reflecting the use of dealer plates.

(8) Pursuant to RCW 46.70.090, testing vehicles for repair is limited to testing for a preexisting, identifiable problem known to the vehicle dealer or manufacturer before the testing is to begin.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-160, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 46.70.090. 91-20-057, § 308-66-160, filed 9/24/91, effective 10/25/91. Statutory Authority: RCW 46.70.160. 86-21-025 (Order DLR-114), § 308-66-160, filed 10/8/86; Order MV 170, § 308-66-160, filed 7/16/73; Order 70-08-04, § 308-66-160, filed 8/6/70; Order 69-1, § 308-66-160, filed 8/28/69; Order 2, § 308-66-160, filed 1/29/68.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-170  Denial, suspension or revocation of license. (1) When the license of a vehicle dealer has been suspended or revoked ((or an application has been denied)), the department shall post a closure notice at or near the principal entry to the place of business. Such notice shall include a statement that the dealership is closed as to the sale of vehicles because of the ((denial,)) suspension or revocation of a license. In case of a suspension, the duration of the suspension shall be stated on the notice. A dealer shall not remove any closure notice without ((written)) permission from an authorized representative of the director.

(2) Practices inimical to the health and safety of the citizens of the state of Washington pursuant to RCW 46.70.101 (1)(b)(viii) and (2)(k) shall include, but not be limited to, failure to comply with the following federal and state standards, as presently constituted and as hereafter amended, amplified or revised, pertaining to the construction and safety of vehicles:

(a) "Federal motor vehicle safety standards," 49 Code of Federal Regulations, part 571;

(b) "Control of air pollution from new motor vehicles and new motor vehicle engines," 40 Code of Federal Regulations, part 85;

(c) "Vehicle lighting and other equipment," chapter 46.37 RCW;

(d) Rules and regulations adopted by the Washington state patrol pursuant to RCW 46.37.005, Title 204 WAC;

(e) "Mobile/manufactured homes, commercial coaches, park trailers, and recreational vehicles," chapter 296-150B WAC;

(f) Housing and Community Development Act of 1974, Public Law 93-383, Title VI Mobile home construction and safety standards, §§ 603, 604, 610, 615, 616, 617.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-170, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 46.70.101. 91-20-057, § 308-66-170, filed 9/24/91, effective 10/25/91. Statutory Authority: RCW 46.70.160 and 1986 c 199 § 1. 87-01-016 (Order DLR 115), § 308-66-170, filed 12/9/86; Order MV-446, § 308-66-170, filed 9/16/77; Order MV 170, § 308-66-170, filed 7/16/73; Order 2, § 308-66-170, filed 1/29/68.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-190  Transfer of certificate of title by dealer. (1) When a vehicle displaying current Washington plates is sold by a dealer, the dealer shall make an application for a certificate of title in the purchaser's name within forty-five calendar days following the sale of the vehicle.

(2) The dealer shall in every case sign or type his/her name on the dealer's report of sale on the title application accompanying the transfer. If an authorized agent signs for the dealer, he/she shall give his/her title.

(((3) The name and address of the previous registered owner shall be shown on the application for transfer of title.

(4) The dealer shall provide a vehicle odometer disclosure statement with the title application as required by RCW 46.12.124.))

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-190, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 46.70.124. 94-21-055, § 308-66-190, filed 10/13/94, effective 11/13/94. Statutory Authority: RCW 46.70.160, 46.12.120 and [46.12].124. 91-20-057, § 308-66-190, filed 9/24/91, effective 10/25/91. Statutory Authority: RCW 46.70.160. 90-24-054, § 308-66-190, filed 12/3/90, effective 1/3/91; 90-10-013, § 308-66-190, filed 4/20/90, effective 5/21/90; Order MV 170, § 308-66-190, filed 7/16/73; Order 2, § 308-66-190, filed 1/29/68.]

AMENDATORY SECTION (Amending WSR 94-21-055, filed 10/13/94, effective 11/13/94)

WAC 308-66-195  Possession of certificates of ownership. (1) For each used vehicle kept in the dealer's inventory unless the certificate of ownership is in the possession of the person holding a security interest in the dealer's inventory, a vehicle dealer shall have possession of a separate certificate of ownership of either the following ownership documents:

(a) A separate certificate of ((title)) ownership in the name of the dealer, or the dealer's immediate vendor, properly assigned; or

(b) Evidence that the dealer owns the vehicle, such as a bill of sale, and evidence that the dealer has satisfied or paid off any legal owner on the vehicle.

(2) If there is a legal owner on any vehicle acquired by the dealer, the dealer shall obtain possession of the title by paying off any balance due to the legal owner no later than the close of the second business day following the date of acquisition of the vehicle by the dealer. For purposes of this section, a dealer acquires a vehicle when the dealer takes possession of the vehicle and an authorized representative of the dealer unconditionally accepts the written offer to purchase and financing has been approved in accordance with the bushing requirements.

[Statutory Authority: RCW 46.70.160 and 46.70.124. 94-21-055, § 308-66-195, filed 10/13/94, effective 11/13/94; Order MV 170, § 308-66-195, filed 7/16/73.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-210  Statement of change in business structure, ownership interest or control. (1) Any person, firm, association, corporation, entity or trust licensed as a dealer under RCW 46.70.021 must, within ten days following any change in its business structure or a ten percent change in its ownership structure, file a statement describing with particularity the change effected in its business structure or the change in ownership interest. In addition, persons newly assuming executive or control functions, including but not limited to new corporate officers, directors, ten percent stockholders, managing partners, members or trustees, must file within ten days of assuming such function an application and a legal and financial history, including corporation number if a corporation.

(2) Any person, member, firm, association, corporation, entity or trust licensed as a vehicle manufacturer pursuant to chapter 46.70 RCW shall advise the department within ten days of the change and/or addition to:

(a) The business structure of the licensee;

(b) The mailing address of a licensee;

(c) The name and address of employees or agents designated pursuant to RCW 46.70.041 and 46.70.101 to provide service or repairs to vehicles located within the state of Washington. If the licensee requires warranty service to be performed by all of its dealers pursuant to current service agreements on file with the department, it need not advise the department of changes in its lists of dealers.

(3) Any and all changes affecting the applicability of a bond, if posted, shall be reflected by appropriate endorsement to such bond.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-210, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 1986 c 199 § 1. 87-01-016 (Order DLR 115), § 308-66-210, filed 12/9/86; Order MV 170, § 308-66-210, filed 7/16/73; Order 70-08-04, § 308-66-210, filed 8/6/70; Order 69-1, § 308-66-210, filed 8/28/69; Order 2, § 308-66-210, filed 1/29/68.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-211  Termination of business. A dealer or a manufacturer who terminates ((his)) the business shall return ((his)) the license and special license plates to the department for cancellation within ten business days of such termination.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-211, filed 9/9/96, effective 10/10/96; Order MV 170, § 308-66-211, filed 7/16/73; Order 70-08-04, § 308-66-211, filed 8/6/70.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-212  Sale, transfer or other disposition of noncorporate licensee. Upon the sale, transfer or other disposition of fifty-one percent ownership interest in a noncorporate licensee a new application for the appropriate license is required and the fee will be the same as for an original application.

The special license plates issued to the original licensee(s) may ((continue to be used)) be assigned to the new license.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-212, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 46.70.041. 91-20-057, § 308-66-212, filed 9/24/91, effective 10/25/91; Order MV 170, § 308-66-212, filed 7/16/73; Order 70-08-04, § 308-66-212, filed 8/6/70.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-214  Incorporation of licensee while licensed. A licensee which incorporates or forms a limited liability company while licensed shall file a new application for the appropriate license and the fee will be the same as for an original application.

The special license plates issued to the original licensee(s) may ((continue to be used. The firm may request the preincorporation license number upon renewal)) be assigned to the new licensee.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-214, filed 9/9/96, effective 10/10/96. Statutory Authority: RCW 46.70.160 and 46.70.041. 91-20-057, § 308-66-214, filed 9/24/91, effective 10/25/91; Order MV 170, § 308-66-214, filed 7/16/73; Order 70-08-04, § 308-66-214, filed 8/6/70.]

AMENDATORY SECTION (Amending WSR 96-19-025, filed 9/9/96, effective 10/10/96)

WAC 308-66-227  Disclosure of title brands. The disclosure of any title brand required in RCW 46.70.101 (1)(b)(xi) shall be clearly made on the face of the purchase order.

[Statutory Authority: RCW 46.70.160. 96-19-025, § 308-66-227, filed 9/9/96, effective 10/10/96.]

AMENDATORY SECTION (Amending WSR 91-20-057, filed 9/24/91, effective 10/25/91)

WAC 308-66-240  Bond cancellation, closure notice. (1) When the department of licensing has received notification from a bonding company that a dealer's bond has been cancelled or the bond has expired and has not been renewed or a replacement bond has not been received with no lapse in coverage, the department shall notify the licensee to surrender the certificate issued for each license classification and dealer plates to the department.

(2) A bond cancellation closure notice ((shall)) may be posted by the department at the established place of business and shall remain in effect until the license and bond has been reinstated or when the current license expires.

(3) The closure notice will not be posted if the licensee voluntarily surrenders the license certificate and dealer plates and signs a statement that he/she does not plan to obtain a replacement bond or conduct further business.

[Statutory Authority: RCW 46.70.160 and 46.70.070. 91-20-057, § 308-66-240, filed 9/24/91, effective 10/25/91.]

REPEALER

The following sections of the Washington Administrative Code are repealed:

WAC 308-66-156 Guaranteed title.

WAC 308-66-196 Possession of custom documents.

WAC 308-66-205 Vehicle odometer disclosure.