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SPONSOR: |
House Floor |
DATE TYPED: |
3/6/03 |
HB |
225/HFlS |
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SHORT TITLE: |
Used Car Quality Assurance Standards |
SB |
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ANALYST: |
Wilson |
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APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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See Narrative |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
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|
|
|
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See
Narrative |
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LFC files
SUMMARY
Synopsis
of Bill
The House Floor Substitute for House Bill 225
provides for conspicuous notice to consumers of a vehicle being resold after
being taken back by the dealer because of problems. Additionally, it expands the protection of the Quality Assurance
Act to purchasers of used as well as new motor vehicles. Specific exemptions are made for vehicles
sold by banks and financial institutions, insurance companies, businesses
selling to employees and leasing companies selling to lessees.
HB 225/HFlS limits the maximum liability of a seller to the purchase price paid for the used motor vehicle to be refunded to the purchaser or lender as applicable in exchange for the return of the vehicle. A purchaser is required to give a reasonable notice to a seller within thirty days of a breach of the implied warranty of merchantability.
In HB 225/HFlS a consumer or a used motor
vehicle dealer may bring a cause of action against a person who removes the
notification from the motor vehicle, unless the manufacturer, its agent or its
authorized dealer or a used motor vehicle dealer, before completion of the
sale, has provided the purchaser with written notification by the manufacturer,
dealer or agent of the dealer, that the motor vehicle has been replaced or
repurchased.
The effective date for HB 225/HFlS is January 1,
2004.
Significant
Issues
The intent of HB 225/HFlS is to offer additional protection to consumers purchasing used cars.
FINANCIAL IMPLICATIONS
TRD claims there maybe a small increase in
excise tax and registration fees, but it is too difficult to estimate. (See below
under administrative impact).
ADMINISTRATIVE IMPLICATIONS
HB 225/HFlS states that the seller of a used
motor vehicle may not sell the vehicle unless they are a licensed dealer or the
person who possesses the title to the vehicle being sold and it is titled in
the seller’s name. This would stop
“double transfers” at the Motor Vehicle Division and “open titles” by
non-dealers. Motor Vehicle Division
Customer Service Centers and private agents would have to adopt procedures so
that only the registered owner of a used vehicle would be allowed to transfer
that vehicle to another consumer.
The Motor Vehicle Division would have to make
procedural changes, provide additional training and revise the title
document. These tasks could most likely
be accomplished with current resources.
TECHNICAL ISSUES
TRD requests the following clarification:
Section 3 (A) states: “Unless the seller is a used motor vehicle dealer, before a seller attempts to sell the used motor vehicle, the seller shall possess the title to the used motor vehicle and the title shall be in the seller’s name.”
Better language might be: “…, the seller shall
possess documentation of title to the motor vehicle and any other necessary
documentation indicating that the seller has the authority to transfer title to
the motor vehicle.” This would resolve
the problem of a title with multiple names on it, whether it is an “A and B” as
legal owners or “A or B” as legal owners.
In the “A and B” situation, either both A and B must have signed or B,
if signing alone, would have to present appropriate documentation (such as a
power of attorney or probate court documents) to transfer title.
The language in the bill is not clear because a
person can have title to a motor vehicle without having the documentation of title,
especially in a joint ownership situation.
DW/njw:sb