Capitol Briefs 2022 | Issue 3

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Your Voice Matters: Dealers Push Warranty/Recall Fair Reimbursement Bill toward Success

Session 2022, Issue 3
January 31, 2022

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VADA had a busy and successful week.

Our priority legislation HB 259 (Wyatt) that supports fair warranty/recall reimbursement passed out of the House Transportation Subcommittee on Tuesday with a 10-0 vote in support of the bill. The bill then moved to the full Transportation Committee on Thursday and received a 22-0 vote in support.

Watch dealers testify for SB216.

VADA's Tim Pohanka Zooms in from Northern Virginia for Senate Bill 216.

The identical companion bill, SB 216 (McPike) also passed out of the Senate Transportation Committee with a 15-0 vote in favor. Both bills head to the House and Senate Floor to be heard and voted on and then move to the opposite chamber to be heard and voted on once again.

The bills address the continued struggles new car and truck dealerships face when seeking warranty reimbursement at retail amounts. The legislation addresses reimbursement for dealers for customer rental vehicles while warranty/recall repairs are made. The bill also requires that technicians be compensated for their time when assisting in software updates at the dealership. Finally, the bill will protect consumers from unknown software upgrade charges. These subscription fees have become a frequent target by manufacturers and consumers should be made aware by manufacturers.

The result of these bills passing out of their respective committees is a direct result of Virginia’s new car and truck dealerships who engage in the process. We activated our dealer members, service managers, and technicians, who wrote more than 800 letters to Virginia legislators. Many who are in the trenches and live warranty/retail reimbursement issues every day took time to share personal stories that helped move the needle and secure these wins.

VADA Board member and Time Dealer of the Year for Virginia Dan "The Man" Banister Zooms in from Chesapeake for Senate Bill 216.

Contacting your legislator through VADA’s Action Center is what made this a successful advocacy campaign! VADA’s leadership was a vital voice in testifying on behalf of Virginia’s new car and truck dealerships. A big shout out goes to VADA leadership for testifying in support:

  • Emily Beck, Marlow Auto Group
  • Liza Borches, Carter Myers Automotive
  • William Farrell, Berglund Automotive Group
  • Dan Banister, Banister Automotive
  • Tim Pohanka, Pohanka Automotive Group

Overtime Wage Act

As many of you know, the Virginia Overtime Wage Act was passed during the 2021 session. The bill sought to create a state remedy for violations of federal overtime requirements. Unfortunately, the language of the bill went far beyond that intended result, making substantive changes to overtime requirements for many Virginia employers. Federal law lays out various exemptions to overtime requirements that specify exemptions for auto dealership employees. During the special session in the summer, the VADA fixed this problem with budget language. That fix was temporary until July 2022.

VADA's Don Hall testifies on Senate Bill 216.

On Tuesday, HB 1173 (Ware) passed out of the House Commerce and Energy Committee 17-4 in favor. The bill will permanently fix the overtime issue and include all the exemptions, including the auto specific exemptions. SB 631 (Barker) is the identical companion bill that has been referred to the Senate Commerce and Labor Committee. Please be on the lookout this for VADA’s Action Center emails requesting that VADA membership support SB 631.

VADA Chairwoman Emily Marlow Beck Zoom-testifies from Winchester on Senate Bill 216.

EV rebates

The House Appropriations and the Senate Finance and Appropriations Committees will also consider electric vehicle rebates. The VADA has requested $40 million in funding to launch the state’s electric vehicle (EV) rebate program. There are identical House and Senate budget amendments requesting $40 million in funding.  VADA has said if the California Air Resources Board (CARB) is implemented (expected in 2025) in Virginia and the Commonwealth is serious about EV adoption, then EV incentives must be part of the solution.

VADA focuses our time and energy on our main priorities but we stay part of additional business-related policy discussions. Please see legislation we are tracking. As always, we will continue our role at the General Assembly of serving the franchised new car and truck dealers of Virginia.

Motor vehicle dealers compensation for recall & warranty: HB 259 (Wyatt)/SB 216 (McPike)

Provides that new car dealers receive comparable compensation for recall and warranty as they for retail service. The bill also requires full reimbursement for new car dealers for rental vehicles under recall & warranty. Furthermore, the bill would require manufacturers to provide disclosure to consumers for updates to a vehicle accessory or function. The bill also requires that technicians received compensation for vehicle updates under recall and warranty. HB 259 passed House Transportation Committee 22-0 & SB 216 passed Senate Transportation Committee 15-0. Passage by House and Senate expected next week.

Independent dealer-operator recertification: HB 316 (Wyatt)

Codifies existing Motor Vehicle Dealer Board regulations related to independent dealer-operator recertification and changes the recertification from every 36 months to every 24 months. Instruction will also be modified from a six-hour course to a live four-hour instructor-led course and a requirement to pass an examination. We ensured with an amendment that franchise dealers remain exempted from this requirement. Passed House Transportation Committee 22-0. Passage by the House expected next week.

Consumer Protection Act: HB 737 (Krizek)

Provides that it would be a violation of the VA Consumer Protection Act for sellers like dealers to fail to disclose an advertisement for good or services restrictions on a the consumer’s rights in any civil action or right to file a civil action. We opposed this bill. It was killed by the House Commerce and Energy Committee.

DMV Transactions: HB 986 (Runion)

This bill would significantly change the online dealer system. The patron wants to develop other ways for Virginians to conduct DMV transactions through dealers. We are working with him to ensure we maximize the potential of the online dealer system. We expect to be able to do this without legislation.

Replaces current provisions of the Virginia Overtime Wage Act: HB 1173 (Ware)/SB 631 (Barker)

Modifies that Virginia Overtime Wage Act to mimic federal statute for violation of the Federal Fair Labor Standards Act. This bill would fix the auto dealers exemption. HB 1173 passed House Commerce & Energy Committee 17-4. Passage is expected next week. SB 631 will be considered in the Senate Commerce and Labor Committee.

Motor vehicle sales and use tax: HB 1190 (Marshall)

Excludes from the sale price for determining motor vehicle sales and use tax the amount of any credit given by the seller for any motor vehicle taken as a trade-in.

Consumer Protection Act: SB 309 (Edwards)

Provides that no merchant, like a dealer, may use any provision in a contract that restricts a consumer’s right to file a civil action, like arbitration. To be considered by the Senate General Laws Committee.

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