Capitol Briefs 2024, Week 1

January 14, 2024

A new day in Virginia, calls for bipartisanship, and an early look at dealer bills

Last week, the General Assembly convened and swore in dozens of new legislators and, for the first time in the Commonwealth’s more than 400-year history, raised a Black person to the role of Speaker of the House of Delegates. Watching Del. Don Scott of Portsmouth take the gavel as I sat among colleagues who have long been invested in Virginia politics — it was a remarkable moment.

If you don’t know Speaker Scott’s story, which included nearly eight years in federal prison, I encourage you to look it up. “There are those who will tell you that you should be defined forever by a mistake,” he said. “I am here to tell you — do not believe them.”

Words we can all live by.

He’s also approaching the role with a vow to work across the aisle. “I think there are some things we’re going to be able to agree on,” Speaker Scott, a Democrat, said in regard to our Republican Governor, who has implied that he tends to do the same. There is certainly a sense of excitement and optimism as session starts — let’s hope it continues and that Virginia can lead the way toward greater bipartisanship.

As the weeks roll on, we’ll want support from pro-business legislators as we advocate for our Buy/Sell legislation, oppose a bill that would harm the way dealers advertise, and monitor a number of other business-related bills. Lawmakers have until Friday, January 19 to file bills and our legislative team is working every day to track legislation and meet lawmakers.

VADA members should watch this week for an “Action Alert” to support that Buy/Sell legislation, details of which are below. For now, enjoy the first in our weekly Capitol Briefs to dealers during the General Assembly.

— Don Hall, VADA President and CEO

Buy/sell legislation

Our legislative agenda is lighter than in 2023, when we achieved historic franchise system protections. But we have introduced an important bill will help entrepreneurial dealers buy and sell their businesses in a more straightforward manner.

Virginia’s existing statute was intended to create objective and efficient dealership transaction approvals. Unfortunately, manufacturers are delaying or opposing dealership sales due to a lack of clarity in the existing statute.

Our proposed changes in Virginia’s buy/sell laws aim to streamline and make the sale approval process more objective with several changes.

• Timeframe clarity: OEMs would have 60 days to object to a sale upon notification of a transaction, ending what can often become a lengthy transactional process by eliminating any misunderstanding around time limits.
• Clarification of Sufficient Notice: The buy/sell notice from the dealer to the OEM would include only specific, identified information about the sale. This notice starts the 60-day clock for approval. By specifying what the notice must include, OEMs will not be able to delay by claiming they still need more information about the sale.
• Reasonableness definition: Manufacturers may still oppose a sale if the buyer lacks dealership experience. The bill more clearly defines the “reasonableness” of a proposed transferee’s experience as an objective measure of their years in the business, as opposed to subjective measures a manufacturer may attempt to use improperly.
• No delays: If the OEM does not respond within 60 days, the sale is deemed approved.

Delegate Terry Austin (R-37th/Botetourt) is carrying House Bill 191, and Senator Lamont Bagby (D-14th/Henrico) is carrying Senate Bill 534.

VADA will soon send an “Action Alert” to our members encouraging members to contact legislators and urge them to vote for this important piece of legislation.

A consumer protection bill that will harm consumers and businesses (SB 388 and HB 1320)

VADA is monitoring a proposal cloaked as a consumer protection bill, but one that will harm consumers and businesses — dealerships among them.

From groceries to TVs to automobiles, Senate Bill 388, introduced by Stella Pekarsky (D-36^th/Fairfax) with a House companion HB 1320 from Adele McClure (D-2nd/Arlington) would make it mandatory for any seller of consumer goods to include all fees in the price in all advertising. The “Virginia Consumer Protection Act” would prohibit advertising, displaying, or offering any pricing information for goods or services without prominently displaying the total price, which includes all mandatory fees or charges other than taxes imposed.

Obviously, this bill affects retail automotive dealers who are permitted to charge processing fees, and additional charges and taxes. Unlike most retailers, Virginia dealers are subject to a robust set of laws and regulations related to advertising, including appropriate disclosure of fees and charges. Those rules take into account standard industry practices.

This bill would alter how dealers would advertise. For example, certain fees, like processing fees, that can be disclosed separately now must be lumped in with the vehicle price. This creates a significant disadvantage with dealers in other states that may be able to continue to advertise the same fees separately, making their transaction costs appear lower. It would also create consumer confusion.