Warranty/recall bill and overtime legislation are on the road to the governor's desk
Session 2022, Issue 8
March 7, 2022
The 2022 General Assembly session is on day 53 of 60. With one week left of session, hot political topics are high on the priority list before the expected adjournment on March 12.
On Thursday, Democrats voted with Republicans to advance a bill aimed at undoing recent admissions changes at Virginia’s prestigious governor’s schools. This comes on the heels of legislation from 2021 that created a state-ordered push for diversity within Virginia’s elite public schools. The legislation was heavily amended by Senator Chap Petersen (D-Fairfax City) and will simply ban any governor’s school from discriminating “on the basis of race, sex, color, ethnicity or national origin” in its admissions process.
Last Monday, a House GOP subcommittee voted down legislation that would have allowed recreational marijuana sales to begin this September. The bill, which passed the Democratic-controlled Senate two weeks ago, died on a party-line vote. Del. Dawn Adams (D-Richmond) urged GOP colleagues to consider that “the longer we wait to have a regulated market, the harder it will be to compete with that illicit market.” House Speaker Todd Gilbert said, “Virginia Democrats made a great big mess when they legalized marijuana without putting any regulatory or retail structure in place. We are left having to clean up their mess, and we will not make it worse by rushing to fix it.”
Virginia lawmakers still are not ready to pass a law preventing themselves from using campaign cash for personal expenses that are not connected to running for office. House Republicans voted 5-3 to defeat the measure carried by Sen. John Bell (D-Loudoun). The legislation specified certain expenses such as mortgage or rent payments, country club memberships, vacations, and entertainment are unrelated to the campaign. The bill was also killed last year by the Democratic-led Senate.
The House and Senate money committees continue to show where their priorities are by killing a handful of bills that have a fiscal impact. Legislators are beginning discussion on a budget agreement. It is likely that lawmakers will be in Richmond a bit longer than Sine Die adjournment.
- Neither the House nor Senate budget proposals committed two-year funding for the EV rebate program. Budget requests for $40 million toward the initiative were made by Delegate David Reid (D-Loudoun) and Senator Jennifer McClellan (D-Richmond). VADA President and CEO, Don Hall has expressed his disappointment in this article with Virginia Mercury. The House and Senate budget proposals did include funding for electric vehicle infrastructure. The Senate proposed $10 million in grant money that would assist developers in building electric vehicle charging stations in economically distressed areas of Virginia. The House proposed $5 million that would provide grants for EV infrastructure in rural areas.
VADA’s priority legislation HB 259 (Wyatt) that supports fair warranty/recall reimbursement passed the Senate and has been signed by the Senate President as well as the Speaker of the House. The bill heads to Governor Youngkin’s desk to be signed and enacted into law July 1. The identical companion bill, SB 216 (McPike) passed the House 100-0 and has been enrolled to be signed by the Senate President and Speaker of the House.
The bills address the continued struggles new car and truck dealerships face when seeking warranty reimbursement at retail amounts. The legislation also 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.
We will continue to work these bills for support and get them to the Governor’s desk for his signature. Again, we thank the new car and truck dealerships who engaged in the process and wrote more than 800 letters to Virginia legislators!
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.
To address this issue in perpetuity, the VADA is working on HB 1173 (Ware) and SB 631 (Barker). On Feb. 2, HB 1173 passed out of the House with a 59-40 vote. The bill will permanently fix the overtime issue and include all the exemptions, including the auto dealer specific exemptions. SB 631 passed the Senate 32-8 with slightly different language not affecting the auto dealer specific exemptions. Both bills were further amended, and those amendments were accepted. The bills are now on their way to the Governor. The VADA team will send a letter to the Governor urging him to sign both bills.
Vehicle Exhaust Systems
There has been a focus among legislators from Northern Virginia and Richmond who are looking to prevent the loud noise of vehicle’s exhaust systems. HB 632 (Carr) and HB 367 (Watts) put forward legislation that addressed this problem by prohibiting any individual from operating a motor vehicle with an exhaust system that emits noise at more than 85 decibels.
VADA shared concerns that many cars and trucks sold by new franchise car and truck dealers are louder than 85 decibels. The House Transportation subcommittee killed HB 367 (Watts) and amended HB 632 (Carr) to allow law enforcement to stop motor vehicles for existing vehicle violations. An amendment was added to the bill that would allow localities, by ordinance, to regulate noise of a motor vehicle. The Senate modified the bill further but still focused on localities having the ability to regulate noise with a non-conforming muffler or exhaust system.
HB 1267 (Wilt) would have delayed the California Air Resources Board (CARB) standards from 2025 to 2030. The VADA opposed this as the VADA is simultaneously working on EV incentives within the state budget. The Republican-led House Committee on Agriculture, Chesapeake and Natural Resources supported the bill on an 11-10 vote. The bill passed out of the House Tuesday on a party line vote of 52-48. The bill was heard in the Senate Agriculture, Conservation and Natural Resources Committee last week. It was defeated 8-7 on a party line vote. The VADA testified in opposition to the bill because we are committed to CARB as well as funding for the EV rebate program.
HB 351 (Sullivan) would create a driving decarbonization program that would assist developers with non-utility costs associated with installing electric vehicle charging stations. The bill passed out of the House Agriculture, Chesapeake and Natural Resources Committee on Wednesday and was re-referred to the House Appropriations Committee. The bill has a fiscal impact and was sent to the Appropriations Committee. The bill failed to move forward on a 12-6 vote. There is also a Senate version, SB 708 (Marsden), that passed out of the Senate 26-14 and was reported out of the House Agriculture, Chesapeake and Natural Resources Committee by a vote of 15-7. The bill has been referred to the House Appropriations Committee. But given the House vote on HB 351, passage of SB 708 appears unlikely.
Civil Action to Resolve Dispute
SB 309 (Edwards) intended to deal with violations of the Virginia Consumer Protection Act and stated that if a business is using any provisions in any contract or written agreement that restricts a consumer’s right to file a civil action to resolve a dispute that arises in connection with a consumer transaction that does not involve interstate commerce, any such provision would be void and unenforceable. Given that most if not all transactions affect interstate commerce, this provision has little utility. The bill would cause disputes rather than resolve them, and every civil action would have a preliminary fight over interstate commerce to determine whether common limitations affecting consumer transactions can be applied. The VADA opposed the bill in the Senate General Laws Committee, but the bill moved forward on an 8-7 vote. The VADA was able to secure votes to kill the bill on the Senate floor 19-21.
VADA focuses our time and energy on our main priorities, but we are also part of additional business-related policy discussions. Please see thge legislation we are tracking in the list below. 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 repairs as they do 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 receive compensation for vehicle updates under recall and warranty. HB 259 passed the House 98-0 and the Senate 40-0 and has been signed by the Speaker of the House and the Senate President. SB 216 passed the Senate 40-0 and the House 100-0. The bill will need to be signed by both the Speaker of the House and the Senate President. Both bills will then go to the Governor for his signature.
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 98-0 and passed the Senate Committee on Transportation 15-0. The bill passed the Senate Finance Committee unanimously and is on the Senate floor.
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 in an advertisement for goods or services that any contract or agreement for those goods or services restricts the consumer’s rights in any civil action or right to file a civil action. We opposed this bill, and it was killed by the House Commerce and Energy.
DMV Transactions: HB 986 (Runion)
This bill would significantly change the online dealer system. The bill’s author 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. We worked with the patron to have this bill killed this year and instead have a workgroup that will include VADA.
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 59-40 and the Senate 33-6. SB 631 passed the Senate 32-8 and the House 52-48. Both bills now head to the Governor for his signature.
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. We worked with the patron to have this bill worked on with the Youngkin Administration to determine state fiscal impact and the impact to consumers.
Nonrepairable and rebuilt vehicles: HB 1092 (Kilgore)
Repeals the sunset clause for definitions of nonrepairable and rebuilt vehicles. The legislation makes the amendments permanent. VADA participated in the workgroup on definitions and supported the legislation. HB 1092 passed the House floor 89-10 and passed the Senate Transportation Committee 10-4.
Catalytic Converters Thefts: HB 740 (Bell)/SB 729 (Ruff)
The House version would make the theft of a catalytic converter felony regardless of the converter’s value. The Senate’s proposal would make it a misdemeanor for someone to assist in the theft of a converter valued at less than $1,000. Both bills would require scrap metal buyers to maintain records for two years that ensure the seller obtained the item legally. The Senate bill only covers catalytic converters while the House bill expands the coverage to parts of any vehicle, aircraft, boat, or vessel. HB 740 passed the House 69-30 and passed the Senate 39-0. SB 729 passed the Senate 40-0 and passed the House 72-48. The bills passed by each chamber are different, so the measures will go to a conference.