Regular Session 2017-2018 House Bill 1898 P.N. 3784

SENATE AMENDED

PRIOR PRINTER'S NOS. 2688, 2814, 3673

PRINTER'S NO. 3784

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1898

Session of

2017

INTRODUCED BY SANTORA, MUSTIO, READSHAW, DAY, EMRICK, GILLESPIE,

HELM, HICKERNELL, MAHER, MENTZER, M. QUINN, SONNEY, BRIGGS,

D. COSTA, DEASY, J. HARRIS, KORTZ, McCLINTON, RAVENSTAHL,

CHARLTON, PASHINSKI, DRISCOLL, GALLOWAY, MATZIE, SNYDER,

CORBIN, NESBIT, SAINATO, SCHLOSSBERG, PETRARCA, GOODMAN,

CARROLL, MARKOSEK, MILLARD, DUNBAR, PEIFER, KEEFER, HARKINS,

LONGIETTI, DeLUCA, TAYLOR, MASSER, MARSHALL, STEPHENS,

NEILSON, FARRY, SCHWEYER, TOPPER, BARRAR, WHITE, WATSON,

MARSICO, REESE, FLYNN, BENNINGHOFF, KIM, HENNESSEY, PICKETT,

JAMES, PYLE, DAVIS, STURLA, HEFFLEY AND GABLER,

NOVEMBER 8, 2017

AS AMENDED ON THIRD CONSIDERATION, IN SENATE, JUNE 20, 2018

AN ACT

Amending the act of December 22, 1983 (P.L.306, No.84), entitled

"An act providing for the State Board of Vehicle

Manufacturers, Dealers and Salespersons; and providing

penalties," further providing for definitions; providing for

vehicle recalls; and further providing for unlawful acts by

manufacturers or distributors, for application for license

and for licensing cost.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 2 of the act of December 22, 1983

(P.L.306, No.84), known as the Board of Vehicles Act, is amended

by adding definitions to read:

Section 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Do-not-drive order." A notification provided to the owner

of an affected vehicle by a manufacturer or by the National

Highway Traffic Safety Administration unconditionally

instructing the owner to stop driving the vehicle until the

noncompliance or defect remedy is performed.

* * *

"Significantly modify facilities." An alteration that has a

major impact on the architectural features, characteristics,

appearance or integrity of a structure or lot. The term does not

include routine maintenance, such as interior painting,

reasonably necessary to maintain a dealership facility in

attractive condition.

* * *

"Stop-sale order." A notification issued by a manufacturer

to its new vehicle dealers stating that certain used vehicles in

inventory shall not be sold or leased, at retail or wholesale,

due to a Federal safety recall for a defect or a noncompliance

or a Federal or California emissions recall.

* * *

Section 2. The act is amended by adding a section to read:

Section 9.1. Vehicle recalls.

(a) General rule.--A manufacturer shall compensate its new

vehicle dealers for all labor and parts required by the

manufacturer to perform recall repairs. Compensation for recall

repairs shall be in the same manner as warranty parts and labor

compensation under section 9. If parts or a remedy are not

reasonably available to perform a recall service or repair on a

used vehicle held for sale by a new vehicle dealer of the same

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line-make within 30 days of the manufacturer issuing the initial

notice of recall, and the manufacturer has issued a stop-sale

order or a do-not-drive order on the vehicle, the manufacturer

shall compensate the dealer at a prorated rate of at least 1.5%

of the value of the vehicle per month , beginning on the date

that is 30 days after the date on which the stop-sale or do-not-

drive order was provided to the dealer, until the earlier of the

date the recall or remedy parts are made available or the date

the dealer sells, trades or otherwise disposes of the affected

used vehicle. The following shall apply:

(1) The value of a used vehicle shall be the average

trade-in value for used vehicles as indicated in an

independent third-party guide for the year, make, model and

mileage of the recalled vehicle at the time of the

announcement of the stop-sale order or the do-not-drive

order.

(2) This section shall only apply to used vehicles

subject to safety or emissions recalls pursuant to and

recalled in accordance with Federal law and regulations and

where a stop-sale order or a do-not-drive order has been

issued. Further, this section shall only apply to new vehicle

dealers holding used vehicles for sale that are a line-make

that the dealer is franchised to sell or on which the dealer

is authorized to perform recall repairs :

(i) in inventory at the time the stop-sale or do-

not-drive order was issued; or

(ii) which were taken into the used vehicle

inventory of the dealer as a lease return vehicle or

consumer trade-in incident to the purchase of a new

vehicle from the dealer after the stop-sale or do-not-

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drive order was issued.

(3) Nothing in this section shall require a manufacturer

to provide total compensation to a dealer which would exceed

the total average trade-in value of the affected used motor

vehicle as originally determined under paragraph (1).

(b) Violation.--It is a violation of this section for a

manufacturer to reduce the amount of compensation otherwise owed

to a new vehicle dealer because the new vehicle dealer has

submitted a claim for reimbursement under this section or was

otherwise compensated for a vehicle subject to a recall where a

stop-sale order or a do-not-drive order has been issued. This

subsection applies regardless of whether the reduction in the

amount of compensation owed to a new vehicle dealer is through a

chargeback, removal from an incentive program, reduction in

amount owed under an incentive program or any other means.

dealers under this section for recall remedies or repairs, or

for compensation where no part or repair is reasonably available

and the used vehicle is subject to a stop-sale order or a do-

not-drive order, shall be subject to the same limitations and

requirements as a warranty reimbursement claim made under

section 9. A claim shall be either approved or disapproved

within 30 days after the claim is submitted to the manufacturer

in the manner and on the forms the manufacturer reasonably

prescribes. A claim shall be paid within 30 days of approval of

the claim by the manufacturer. A claim not specifically

disapproved in writing within 30 days after the manufacturer

receives a submitted claim shall be deemed to be approved.

(d) Alternative compensation.--As an alternative to the

compensation provided for under subsection (a):

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(1) a manufacturer may compensate its new vehicle

dealers under a national recall compensation program if the

compensation under the program is equal to or greater than

that provided under subsection (a); or

(2) the manufacturer and d ealer otherwise agree to equal

or greater compensation than that provided under subsection

(a).

(e) Exclusive remedy.--Any compensation provided to a new

vehicle dealer pursuant to this section is exclusive and may not

be combined with any other Federal or State recall compensation

remedy.

(f) Disclosure.--A new or used vehicle dealer shall disclose

(F) DISCLOSURE.--

(1) A NEW OR USED VEHICLE DEALER SHALL DISCLOSE in

writing to used vehicle retail purchasers at the time of sale

the existence of any open, unremedied recalls. By providing

to the used vehicle retail purchaser a report obtained from

the publicly accessible Internet website safercar.gov, or a

successor website, based on a vehicle identification number

search, the dealer shall be deemed to have complied with the

disclosure requirement under this subsection. For the purpose

of this subsection, failure to provide disclosures to

multiple vehicle retail purchasers at the time of sale in

violation of this subsection constitutes a single offense

with a maximum fine of $1,000 under section 28(a).

(2) NOTHING IN THIS SUBSECTION SHALL BE CONSTRUED TO

LIMIT ANY CIVIL ACTIONS OR REMEDIES AVAILABLE IN STATUTE OR

COMMON LAW.

Section 3. Section 12(a)(8) of the act is amended to read:

Section 12. Unlawful acts by manufacturers or distributors.

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(a) Unlawful coercive acts.--It shall be a violation for any

manufacturer, factory branch, distributor, field representative,

officer, agent or any representative whatsoever of such

manufacturer, factory branch or distributor licensed under this

act to require, attempt to require, coerce or attempt to coerce

any new vehicle dealer in this Commonwealth to:

* * *

(8) Expand, construct or significantly modify facilities

before a date that is ten years after the date of the

construction of the facility or the alteration or remodeling

at that location was completed and without assurances that

the manufacturer or distributor will provide a reasonable

supply of new vehicles within a reasonable time so as to

justify such an expansion in light of the market and economic

conditions. This paragraph shall not apply if the expansion,

construction or significant modification is necessary to

comply with a health or safety law or to comply with a

technology requirement, which is necessary to sell or service

a vehicle that the new vehicle dealer is licensed by the

manufacturer to sell or service. This section shall apply to

any successor dealer provided the dealer has been designated

and approved by the manufacturer in the franchise agreement

and the construction, alteration or remodeling substantially

complied with the manufacturer's brand image standards or

plans that the manufacturer provided at the time the

construction, alteration or remodeling was completed. Nothing

in this paragraph shall prohibit a manufacturer from:

(i) Continuing a facility improvement program that

is in effect as of the effective date of this

subparagraph with more than one new vehicle dealer in

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this Commonwealth or to renewing or modifying the

facility improvement program.

(ii) Providing lump sum or regularly scheduled

payments to assist a new vehicle dealer in making a

facility improvement, including construction, alteration

or remodeling or installing signage or an image element.

(iii) Providing reimbursement to a new vehicle

dealer on reasonable, written terms for a portion of the

new vehicle dealer's cost of making a facility

improvement, including construction, alteration or

remodeling, the purchase of goods, building materials or

services or installing signage or an image element.

* * *

Section 4. Section 22 of the act 22(A)(9) OF THE ACT IS

AMENDED AND THE SECTION is amended by adding a subsection to

read:

Section 22. Application for license.

(A) DEALER'S OR VEHICLE AUCTION'S LICENSE.--APPLICATION FOR

LICENSE AS A DEALER OR VEHICLE AUCTION SHALL BE MADE IN WRITING

TO THE BOARD, SIGNED BY THE APPLICANT, SETTING FORTH THE

FOLLOWING:

* * *

(9) A STATEMENT BY THE APPLICANT THAT HE HAS MET ALL

FACILITY REQUIREMENTS AS NOTED HEREIN AND AS REQUIRED BY

REGULATION, EXCEPT AS PROVIDED IN SUBSECTION (A.1).

* * *

(b.1) Temporary license (A.1) TEMPORARY PERMIT FOR NEW

VEHICLE DEALERS .--Upon receipt of a complete and accurate new

vehicle dealer application or new vehicle dealer change of

address application, the board shall issue a new vehicle dealer

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license immediately. If the new vehicle dealer does not have the

franchise approval letter, the telephone business line

information, the certificate of occupancy or the lease or deed

for the property available when the application has been

submitted, the new vehicle dealer shall receive a temporary

license PERMIT that expires at the end of 45 business days from

the date of closing. The new vehicle dealer shall submit the

franchise approval letter, the telephone business line

information, the certificate of occupancy and the lease or deed

for the property prior to the expiration of the temporary

license PERMIT . Upon receipt of the franchise approval letter,

the telephone business line information, the certificate of

occupancy and the lease or deed for the property, the board

shall issue a NEW VEHICLE DEALER license immediately.

* * *

Section 5. Section 27.1(a)(2) of the act is amended to read:

Section 27.1. Licensing cost.

(a) Licensing cost.--Subject to the limitations established

under subsection (c), a licensed dealer who has a contract with

the Department of Transportation pursuant to 75 Pa.C.S. § 7501

(relating to authorization of messenger and agent services) may

charge the purchaser of a vehicle a licensing cost permissible

under 75 Pa.C.S. Ch. 19 (relating to fees) and the act of

December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade

Practices and Consumer Protection Law, and regulations

promulgated thereunder, to include any of the following:

* * *

(2) A documentary preparation charge for:

(i) Preparation and completion of documents required

to register and license the vehicle under 75 Pa.C.S.

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(relating to vehicles).

(ii) Collection and submission of taxes payable by

the purchaser.

(iii) Preparation of any other information

associated with titling and registration of a vehicle.

(iv) Complying with Federal and State laws and

regulations relating to the privacy and safeguarding of

customer information requirements , providing financial

services to the customer and preparation and retrieval of

documents .

* * *

Section 6. This act shall take effect in 60 days.

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