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Pennsylvania House of Representatives
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House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: October 3, 2017 02:46 PM
From: Representative James R. Santora
To: All House members
Subject: Legislation requiring dealer disclosure of vehicles with open, unremedied recalls at time of sale.
 
SUBJECT: Proposed legislation requiring dealer disclosure of vehicles with open, unremedied recalls at time of sale, and other amendments to the state Board of Vehicles Act

In the near future, I will be introducing legislation that amends the State Board of Vehicles Act to:
  1. Require all vehicle dealers licensed in Pennsylvania to disclose in writing to used vehicle purchasers the existence of any open, unremedied recalls.Failure of dealers to provide such disclosure would be subject to penalty as provided for in the state Board of Vehicles Act.
  2. If a ‘stop sale’ or ‘do not drive’ order has been issued by a vehicle manufacturer on a used vehicle and a recall remedy or repair parts are unavailable to the dealer, after 15 days from the issuance of the order the manufacturer will be required to compensate their franchisee dealers at a rate of 1.75 percent of the value of the in-brand vehicle per month while the order is in effect.Similar legislation has been enacted or is under consideration in other states as a means of providing for the reimbursement of dealers by their manufacturers for the finance and depreciation costs they incur when holding vehicles in their inventory that the manufacturers prohibit them from selling.
  3. Prohibit vehicle manufacturers from requiring their franchisee dealers to significantly modify their dealership facilities within ten years after the construction or major renovation of the facility that was previously conducted by the dealer in accordance with the manufacturer’s facility requirements at the time.
  4. Establish a temporary ‘provisional license’ category that would be available to new vehicle dealers (who have often already demonstrated to the Department of State that they are able to meet the numerous licensure requirements set forth in state law and regulation, have invested millions of dollars in their dealership facilities, and met the stringent requirements required by their franchisor manufacturers) which would allow them to operate for sixty days from the date of their application to the Department of State for a new vehicle dealer license for a dealership they are acquiring.Backlogs in the processing of such applications have been resulting in newly acquired dealerships not being able to operate for numerous weeks pending Department of State review.Full compliance with all existing Department of State licensure requirements will continue to be necessary for state licensure and those requirements will be unchanged by this legislation.
  5. Expands the definition of ‘licensing costs’ in the Board of Vehicles Act to include those related to compliance with federal and state laws for consumer privacy and the safeguarding of customer information.

These amendments have been drafted with the cooperation of, and are supported by, the Pennsylvania Automotive Association which represents the 950 new vehicle dealers doing business in Pennsylvania.

Please join me in co-sponsoring this legislation. Thank you.



Introduced as HB1898