Capitol Briefs 2023 | Issue 4

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At Crossover, a look at where dealer bills stand

2023 Session, Issue 4
February 6, 2023

This week is the halfway point of the General Assembly and known as “Crossover,” when bills from the House of Delegates move to the Senate to be discussed and voted on, and vice versa.

Crossover marks a moment when much of the fast-paced work is done, and legislators and lobbyists are dialed in on moving hundreds of pieces of legislation to their ultimate success or demise.

VADA’s premier bills to protect the franchise system have unanimous support, and our focus last week turned to defeating ill-conceived legislation backed by Tesla, House Bill 2468.

Tesla and other manufacturers can operate dealerships in Virginia under an exemption that there is no dealer available to operate the store in the area. Current Virginia law requires each location where Tesla or another manufacturer wants to operate be evaluated by the DMV Commissioner through an administrative hearing process.

Despite being approved for three new locations in 2021 — Charlottesville, Norfolk and Arlington — Tesla wants to remove the administrative hearing process and receive blanket statewide approval for stores if just a single location is approved. This would create two separate sets of rules for operators.

Watch video of testimony on HB2468, which would have allowed Tesla and other new entrants to bypass administrative hearings with DMV to open new stores.

VADA’s relationships and goodwill with lawmakers helped us educate and thwart the legislation. In addition to VADA, an alliance of manufacturers, General Motors, and Virginia’s independent dealers spoke out against the bill in a hearing last Tuesday. The bill was tabled in the subcommittee, 7-2. Watch video of the House Transportation’s DMV subcommittee taking up the bill.

Franchise protections

The House version of our franchise bill, HB1469, is speeding along and made it to the Senate’s Transportation committee prior to Crossover. The bill received unanimous support from the committee. With the expectation that the bill will get support from the Senate, we will get it to the Governor’s desk for signing as soon as possible.

Clarifying “Home solicitation”

House Bill 2422 and Senate Bill 1509 clarify the definition of a “home solicitation sale” and amend the Virginia Home Solicitation Sales Act, which provides consumer protections from sellers that solicit sales at the door or over the phone. A key provision of the law provides buyers the right to cancel a home solicitation sale until midnight of the third business day after the day when the agreement or offer is signed, often referred to as the “cooling off period." The bills are backed by an insurance company looking to exclude insurance agents from the act.

Given that dealers sometimes do test drives or conduct business at a person’s home, VADA attorneys wanted to ensure the new definition would not lump dealers into “solicitors.” VADA asked for and received a carveout in the bill to ensure licensed motor vehicle dealers who may, from time to time, deliver a vehicle or sign paperwork at customer’s home do not come under the act. The amendments were accepted, and the bills have unanimous support heading into crossover.

The House bill is sponsored by Amanda Batten (R-James City), with the Senate version by Monty Mason (D-Williamsburg).

Should diagnostic work for automotive repair be exempt from retail sales and use tax?

Delegate Kim Taylor (R-Petersburg) believes so. Her bill would clarify that diagnostic work for automotive repair should be characterized as labor, and therefore untaxed. Dealers agree. There is minimal fiscal impact on the state budget, but House Bill 1677 has passed 99-0 and now moves to the Senate Finance and Appropriations committee.

Loud exhausts heading toward workgroup study

Senator Adam Ebbin (D-Alexandria) has a bill to limit the decibel level to 85 (50 feet away) from a vehicle’s exhaust system. Northern Virginia, in particular, has had a rash of complaints from citizens about loud exhaust (due mostly to highway racing). There are a dozen or so automobiles sold by dealers with systems over 85 decibels, so while we hear the pain, we also don’t want dealers harmed by Senate Bill 1085.

The bill has been amended to a study to address this issue, which VADA supports. House Transportation committee Chairman Terry Austin (R-Buchanan) would also like a study at how exhaust systems affect noise ordinances, law enforcement, and prosecution.

Defeated workers’ comp bill

VADA worked with insurance companies to defeat House Bill 1966, carried by Mike Mullin, D-Newport News. It would have modified a workers’ comp statute and significantly increased penalties for failure to pay timely compensation. Mullin struck the bill from the docket.

Clean Cars repeal likely headed nowhere

There have been a number of bills in the House and Senate to repeal the 2021 law to adopt California Air Resource Board standards and CARB’s zero-emissions vehicle (ZEV) requirements in Virginia. HB1378 passed out of the House on partisan lines and will head to the Senate Committee on Agriculture, Conservation and Natural Resources. The bill is likely to be defeated this year by the Democrat-controlled Senate, meaning the regulations, while unfunded, will stay in place in the Commonwealth.

Your VADA Legislative Team:

Don Hall
President & CEO
Anne Gambardella, Esq.
General Counsel & EVP

Ralston King
VP, Legislative Affairs

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