Capitol Briefs 2024, Week 2

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January 22, 2024

Inspections, Emissions, Advertising, and Buy/Sells: Week 2 Wraps in Virginia

As the third week of a 60-day General Assembly session begins today, more than 2,000 bills have been filed and are working their way through the legislative process. The VADA legislative team is actively tracking close to 75 of those bills that could impact the Commonwealth’s franchised auto dealers.

But bills aside, our main focus this year is Auto Franchise System 101 for the dozens of new legislators in the General Assembly. In recent weeks, we have met with every member on each chamber’s respective Transportation committee to discuss our priority legislation to improve the way dealerships are bought and sold (details below).

If you have not yet signed up to attend Dealer Day at the Capitol this Wednesday, please be sure someone from your group or store is there.

Here’s a look at the bills we are tracking. For more details on the legislation and their current status in the process, click the bill number.

Safety inspections evolving? SB 349 (Reeves) and HB 1047 (Batten)

VADA is in full support of the state’s safety inspection program. We’re also open to changes.

Two proposals would modify the safety inspection program for new vehicles — in particular, exempting new vehicles from safety inspections for the first two years.

The Senate version, with changes, passed the Senate Transportation committee last week. Collaboration with various stakeholders, including Sen. Bryce Reeves (R-28th/Fredericksburg), led to adjustments that made the bill acceptable to both Virginia auto dealers and state police.

The goal is to maintain the state safety inspection program while providing accommodations for new vehicles that undergo a pre-delivery inspection before sale, and generally have very few wear-and-tear issues checked by an inspection in their initial two years.

Emissions standards stand: SB 3 (Stuart), SB 53 (McDougle), SB 160 (McGuire)

Several bills were introduced attempting to repeal the California Air Resources Board's zero-emission vehicle standards, which passed in 2021 with VADA’s backing. The Republican-sponsored bills were rejected by the Senate Agriculture, Conservation, and Natural Resources committee, where Democrats remain firm in supporting the standards.

Committee Chairman Sen. Dave Marsden (D-35th/Burke) emphasized the need to evaluate Virginia’s Clean Cars and Clean Economy acts, to consider the feasibility of meeting aspirational goals for zero-emission vehicle sales. A workgroup led by Sen. Marsden will assess the trajectory of new zero-emission vehicle sales and the industry's capacity to meet goals.

VADA supports various zero-emission vehicles — battery electric, plug-in hybrid, hybrid, and all the varied powertrains. Most auto manufacturers have made it clear they are committed to phasing out gas-powered engines over the next 15 years.

However, mass adoption of EVs requires government policies that are technologically achievable, maintain affordability, and complement the efforts of the private sector in advancing the vehicle fleet turnover needed to achieve the targeted environmental benefits within a timeframe that helps, not hurts, new vehicle buyers.

We appreciate Sen. Marsden, along with Commerce and Labor Chairman Sen. Creigh Deeds (D-11th/Charlottesville), intend to convene a working group to ensure Virginia’s policies achieve those goals.

Buy/sell legislation to create Predictability, Objectivity, Accountability: HB 191 (Austin) and SB 534 (Bagby)

  • Update: We expect the bill will be heard this week. We have met with all members of each chamber’s transportation committee, and we are having conversations with manufacturers, too.

 Our priority legislation 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 predictable, objective, and accountable — 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.

Take Action on our Buy/Sell bill: If you are a dealer in Virginia, we urge you to sign a letter of support to members of the House and Senate Transportation committees urging support for our legislation. Visit our Action Center and follow the instructions now.

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

  • Update: The bills have been delayed and VADA’s discussions with the patrons are ongoing. If passed, Virginia would stand out as an outlier compared to other states in terms of advertising requirements for car dealers.

Summary: From groceries to TVs to automobiles, these amendments to the Virginia Consumer Protection Act 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.