Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 194 Second Substitute (2023GS)

Sponsor

Rep. Jack, C.

Final action

Governor Signed 3/13/2023

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• prohibits a motor vehicle dealer from requiring a purchaser to pay, as a condition of the sale, a fee or charge in addition to the negotiated purchase, other than:
• certain fees required by state or federal law;
• a dealer documentary service fee; and
• certain increases in price imposed by a manufacturer for semi-tractors with a gross vehicle weight rating over 14,000 pounds;
• specifies the civil penalties for a violation;
• requires a motor vehicle dealer to provide and execute a transaction disclosure form;
• requires the State Tax Commission to create the transaction disclosure form; and
• makes technical changes.

Every vote on this bill

Bill text

MOTOR VEHICLE DEALER REQUIREMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Colin W. Jack
Senate Sponsor: 
Don L. Ipson
LONG TITLE
General Description:
This bill prohibits a motor vehicle dealer from charging a fee or charge in addition to
the negotiated purchase price as a condition of the sale.
Highlighted Provisions:
This bill:
▸ prohibits a motor vehicle dealer from requiring a purchaser to pay, as a condition of
the sale, a fee or charge in addition to the negotiated purchase, other than:
• certain fees required by state or federal law;
• a dealer documentary service fee; and
• certain increases in price imposed by a manufacturer for semi-tractors with a
gross vehicle weight rating over 14,000 pounds;
▸ specifies the civil penalties for a violation;
▸ requires a motor vehicle dealer to provide and execute a transaction disclosure
form;
▸ requires the State Tax Commission to create the transaction disclosure form; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
41-3-102
, as last amended by Laws of Utah 2022, Chapter 455
41-3-103
, as last amended by Laws of Utah 2022, Chapter 455
41-3-211
, as enacted by Laws of Utah 2010, Chapter 342
41-3-702
, as last amended by Laws of Utah 2019, Chapter 424
ENACTS:
41-3-401.6
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
41-3-102
 is amended to read:
41-3-102.
Definitions.
As used in this chapter:
(1) "Administrator" means the motor vehicle enforcement administrator.
(2) "Agent" means a person other than a holder of any dealer's or salesperson's license
issued under this chapter, who for salary, commission, or compensation of any kind, negotiates
in any way for the sale, purchase, order, or exchange of three or more motor vehicles for any
other person in any 12-month period.
(3) "Auction" means a dealer engaged in the business of auctioning motor vehicles,
either owned or consigned, to the general public.
(4) "Authorized service center" means an entity that:
(a) is in the business of repairing exclusively the motor vehicles of the same line-make
as the motor vehicles a single direct-sale manufacturer manufactures;
(b) the direct-sale manufacturer described in Subsection (4)(a) authorizes to complete
warranty repair work for motor vehicles that the direct-sale manufacturer sells, displays for
sale, or offers for sale or exchange; and
(c) conducts business primarily from an enclosed commercial repair facility that is
permanently located in the state.
(5) "Board" means the advisory board created in Section 
41-3-106
.
(6) "Body shop" means a person engaged in rebuilding, restoring, repairing, or painting
the body of motor vehicles for compensation.
(7) "Commission" means the State Tax Commission.
(8) "Crusher" means a person who crushes or shreds motor vehicles subject to
registration under Chapter 1a, Motor Vehicle Act, to reduce the useable materials and metals to
a more compact size for recycling.
(9) (a) "Dealer" means a person:
(i) whose business in whole or in part involves selling new, used, or new and used
motor vehicles or off-highway vehicles; and
(ii) who sells, displays for sale, or offers for sale or exchange three or more new or
used motor vehicles or off-highway vehicles in any 12-month period.
(b) "Dealer" includes a representative or consignee of any dealer.
(10) "Direct-sale manufacturer" means a person:
(a) that is both a manufacturer and a dealer;
(b) that is:
(i) an electric vehicle manufacturer; or
(ii) a low-volume manufacturer;
(c) that is not a franchise holder;
(d) that is domiciled in the United States; and
(e) whose chief officers direct, control, and coordinate the person's activities as a
direct-sale manufacturer from a physical location in the United States.
(11) "Direct-sale manufacturer salesperson" means an individual who for a salary,
commission, or compensation of any kind, is employed either directly, indirectly, regularly, or
occasionally by a direct-sale manufacturer to sell, purchase, or exchange or to negotiate for the
sale, purchase, or exchange of a motor vehicle manufactured by the direct-sale manufacturer
who employs the individual.
(12) (a) "Dismantler" means a person engaged in the business of dismantling motor
vehicles subject to registration under Chapter 1a, Motor Vehicle Act, for the resale of parts or
for salvage.
(b) "Dismantler" includes a person who dismantles three or more motor vehicles in any
12-month period.
(13) "Distributor" means a person who has a franchise from a manufacturer of motor
vehicles to distribute motor vehicles within this state and who in whole or in part sells or
distributes new motor vehicles to dealers or who maintains distributor representatives.
(14) "Distributor branch" means a branch office similarly maintained by a distributor
for the same purposes a factory branch is maintained.
(15) "Distributor representative" means a person and each officer and employee of the
person engaged as a representative of a distributor or distributor branch of motor vehicles to
make or promote the sale of the distributor or the distributor branch's motor vehicles, or for
supervising or contacting dealers or prospective dealers of the distributor or the distributor
branch.
(16) "Division" means the Motor Vehicle Enforcement Division created in Section
41-3-104
.
(17) "Electric vehicle manufacturer" means a person that, in this state, sells, displays
for sale, or offers for sale or exchange only new motor vehicles of the person's own line-make
that are:
(a) exclusively propelled through the use of electricity, a hydrogen fuel cell, or another
non-fossil fuel source;
(b) (i) passenger vehicles with a gross vehicle weight rating of 14,000 pounds or less;
or
(ii) trucks with a gross vehicle weight rating of 14,000 pounds or less; and
(c) manufactured by the person.
(18) "Factory branch" means a branch office maintained by a person who manufactures
or assembles motor vehicles for sale to distributors, motor vehicle dealers, or who directs or
supervises the factory branch's representatives.
(19) "Factory representative" means a person and each officer and employee of the
person engaged as a representative of a manufacturer of motor vehicles or by a factory branch
to make or promote the sale of the manufacturer's or factory branch's motor vehicles, or for
supervising or contacting the dealers or prospective dealers of the manufacturer or the factory
branch.
(20) "Fleet transaction" means a licensee's sale of one or more motor vehicles to a
manufacturer-approved current fleet customer under the manufacturer's fleet program.
[
(20)
] 
(21)
 (a) "Franchise" means a contract or agreement between a dealer and a
manufacturer of new motor vehicles or a manufacturer's distributor or factory branch by which
the dealer is authorized to sell any specified make or makes of new motor vehicles.
(b) "Franchise" includes a contract or agreement described in Subsection [
(20)(a)
]
(21)(a)
 regardless of whether the contract or agreement is subject to Title 13, Chapter 14, New
Automobile Franchise Act, Title 13, Chapter 35, Powersport Vehicle Franchise Act, or neither.
[
(21)
] 
(22)
 (a) "Franchise holder" means a manufacturer who:
(i) previously had a franchised dealer in the United States;
(ii) currently has a franchised dealer in the United States;
(iii) is a successor to another manufacturer who previously had or currently has a
franchised dealer in the United States;
(iv) is a material owner of another manufacturer who previously had or currently has a
franchised dealer in the United States;
(v) is under legal or common ownership, or practical control, with another
manufacturer who previously had or currently has a franchised dealer in the United States; or
(vi) is in a partnership, joint venture, or similar arrangement for production of a
commonly owned line-make with another manufacturer who previously had or currently has a
franchised dealer in the United States.
(b) "Franchise holder" does not include a manufacturer described in Subsection
[
(21)(a),
] 
(22)(a),
 if at all times during the franchised dealer's existence, the manufacturer had
legal or practical common ownership or common control with the franchised dealer.
[
(22)
] 
(23)
 "Low-volume manufacturer" means a manufacturer who:
(a) in this state, sells, displays for sale, or offers for sale or exchange only new motor
vehicles of the person's own line make that are:
(i) (A) passenger vehicles with a gross vehicle weight rating of 14,000 pounds or less;
or
(B) trucks with a gross vehicle weight rating of 14,000 pounds or less; and
(ii) manufactured by the person; and
(b) constructs no more than 325 new motor vehicles in any 12-month period.
[
(23)
] 
(24)
 "Line-make" means motor vehicles that are offered for sale, lease, or
distribution under a common name, trademark, service mark, or brand name of the
manufacturer.
[
(24)
] 
(25)
 "Manufacturer" means a person engaged in the business of constructing or
assembling new motor vehicles, ownership of which is customarily transferred by a
manufacturer's statement or certificate of origin, or a person who constructs three or more new
motor vehicles in any 12-month period.
[
(25)
] 
(26)
 "Material owner" means a person who possesses, directly or indirectly, the
power to direct, or cause the direction of, the management, policies, or activities of another
person:
(a) through ownership of voting securities;
(b) by contract or credit arrangement; or
(c) in another way not described in Subsections [
(25)(a)
] 
(26)(a)
 and (b).
[
(26)
] 
(27)
 (a) "Motor vehicle" means a vehicle that is:
(i) self-propelled;
(ii) a trailer;
(iii) a travel trailer;
(iv) a semitrailer;
(v) an off-highway vehicle; or
(vi) a small trailer.
(b) "Motor vehicle" does not include:
(i) mobile homes as defined in Section 
41-1a-102
;
(ii) trailers of 750 pounds or less unladen weight;
(iii) a farm tractor or other machine or tool used in the production, harvesting, or care
of a farm product; and
(iv) park model recreational vehicles as defined in Section 
41-1a-102
.
[
(27)
] 
(28)
 "Motorcycle" means the same as that term is defined in Section 
41-1a-102
.
[
(28)
] 
(29)
 "New motor vehicle" means a motor vehicle that:
(a) has never been titled or registered; and
(b) for a motor vehicle that is not a trailer, travel trailer, or semitrailer, has been driven
less than 7,500 miles.
[
(29)
] 
(30)
 "Off-highway vehicle" means the same as that term is defined in Section
41-22-2
.
[
(30)
] 
(31)
 "Pawnbroker" means a person whose business is to lend money on security
of personal property deposited with him.
[
(31)
] 
(32)
 (a) "Principal place of business" means a site or location in this state:
(i) devoted exclusively to the business for which the dealer, manufacturer,
remanufacturer, transporter, dismantler, crusher, or body shop is licensed, and businesses
incidental to them;
(ii) sufficiently bounded by fence, chain, posts, or otherwise marked to definitely
indicate the boundary and to admit a definite description with space adequate to permit the
display of three or more new, or new and used, or used motor vehicles and sufficient parking
for the public; and
(iii) that includes a permanent enclosed building or structure large enough to
accommodate the office of the establishment and to provide a safe place to keep the books and
other records of the business, at which the principal portion of the business is conducted and
the books and records kept and maintained.
(b) "Principal place of business" means, with respect to a direct-sale manufacturer, the
direct-sale manufacturer's showroom, which shall comply with the requirements of Subsection
[
(31)(a).
] 
(32)(a).
[
(32)
] 
(33)
 "Remanufacturer" means a person who reconstructs used motor vehicles
subject to registration under Chapter 1a, Motor Vehicle Act, to change the body style and
appearance of the motor vehicle or who constructs or assembles motor vehicles from used or
new and used motor vehicle parts, or who reconstructs, constructs, or assembles three or more
motor vehicles in any 12-month period.
[
(33)
] 
(34)
 "Salesperson" means an individual who for a salary, commission, or
compensation of any kind, is employed either directly, indirectly, regularly, or occasionally by
any new motor vehicle dealer or used motor vehicle dealer to sell, purchase, or exchange or to
negotiate for the sale, purchase, or exchange of motor vehicles.
[
(34)
] 
(35)
 "Semitrailer" means the same as that term is defined in Section 
41-1a-102
.
[
(35)
] 
(36)
 "Showroom" means a site or location in the state that a direct-sale
manufacturer uses for the direct-sale manufacturer's business, including the display and
demonstration of new motor vehicles that are exclusively of the same line-make that the
direct-sale manufacturer manufactures.
[
(36)
] 
(37)
 "Small trailer" means a trailer that has an unladen weight of:
(a) more than 750 pounds; and
(b) less than 2,000 pounds.
[
(37)
] 
(38)
 "Special equipment" includes a truck mounted crane, cherry picker, material
lift, post hole digger, and a utility or service body.
[
(38)
] 
(39)
 "Special equipment dealer" means a new or new and used motor vehicle
dealer engaged in the business of buying new incomplete motor vehicles with a gross vehicle
weight of 12,000 or more pounds and installing special equipment on the incomplete motor
vehicle.
[
(39)
] 
(40)
 "Trailer" means the same as that term is defined in Section 
41-1a-102
.
[
(40)
] 
(41)
 "Transporter" means a person engaged in the business of transporting motor
vehicles as described in Section 
41-3-202
.
[
(41)
] 
(42)
 "Travel trailer" means the same as that term is defined in Section
41-1a-102
.
[
(42)
] 
(43)
 "Used motor vehicle" means a vehicle that:
(a) has been titled and registered to a purchaser other than a dealer; or
(b) for a motor vehicle that is not a trailer, travel trailer, or semitrailer, has been driven
7,500 or more miles.
[
(43)
] 
(44)
 "Wholesale motor vehicle auction" means a dealer primarily engaged in the
business of auctioning consigned motor vehicles to dealers or dismantlers who are licensed by
this or any other jurisdiction.
Section 2. Section 
41-3-103
 is amended to read:
41-3-103.
Exceptions to "dealer" definition -- Dealer licensed in other state --
Direct-sale manufacturer -- Direct-sale manufacturer salesperson.
Under this chapter:
(1) (a) An insurance company, bank, finance company, company registered as a title
lender under Title 7, Chapter 24, Title Lending Registration Act, company registered as a check
casher or deferred deposit lender under Title 7, Chapter 23, Check Cashing and Deferred
Deposit Lending Registration Act, public utility company, commission impound yard, federal
or state governmental agency, or any political subdivision of any of them or any other person
coming into possession of a motor vehicle as an incident to its regular business, that sells the
motor vehicle under contractual rights that it may have in the motor vehicle is not considered a
dealer.
(b) A person who sells or exchanges only those motor vehicles that the person has
owned for over 12 months is not considered a dealer.
(2) (a) A person engaged in leasing motor vehicles is not considered as coming into
possession of the motor vehicles incident to the person's regular business.
(b) A pawnbroker engaged in selling, exchanging, or pawning motor vehicles is
considered as coming into possession of the motor vehicles incident to the person's regular
business and must be licensed as a used motor vehicle dealer.
(3) A person currently licensed as a dealer or salesperson by another state or country
and not currently under license suspension or revocation by the administrator may only sell
motor vehicles in this state to licensed dealers, dismantlers, or manufacturers, and only at their
places of business.
(4) Except as otherwise expressly provided:
(a) a direct-sale manufacturer is subject to the same provisions under this chapter as a
new motor vehicle dealer; and
(b) a direct-sale manufacturer salesperson is subject to the same provisions under this
chapter as a salesperson.
(5) Notwithstanding any provision of this chapter to the contrary, a direct-sale
manufacturer:
(a) may, without a franchise, sell, display for sale, or offer for sale or exchange a motor
vehicle:
(i) [
described in Subsection 
41-3-102
(17)
] if the direct-sale manufacturer is an electric
vehicle manufacturer; or
(ii) [
described in Subsection 
41-3-102
(23)
] if the direct-sale manufacturer is a
low-volume manufacturer; and
(b) may not sell, display for sale, or offer for sale or exchange a new motor vehicle that
is not of the same line-make the direct-sale manufacturer manufactures.
Section 3. Section 
41-3-211
 is amended to read:
41-3-211.
Unlawful acts or practices.
(1) A licensee may not knowingly or intentionally engage in any of the following
unlawful acts or practices:
(a) provide a financial institution or person being contacted to provide financing for the
purchase of a motor vehicle, a motor vehicle contract of sale, document of sale, contract,
request for proposal, or other document that does not accurately state:
(i) the terms of the motor vehicle purchase; or
(ii) if the vehicle is a rebuilt vehicle;
(b) sell a motor vehicle to a purchaser that is subject to financing that is not the motor
vehicle described in a motor vehicle contract of sale, document of sale, contract, request for
proposal, or other document as of the time the contract of sale, document of sale, contract,
request for proposal, or other document provided to the financial institution or person
providing financing; [
or
]
(c) make payments on any loan or lease on a motor vehicle subject to a loan or lease
that is subject to the payoff requirements of Subsection 
41-3-402
(1)[
.
]
; or
(d) except as provided in Subsection (3), require a purchaser to pay as a condition of
the sale:
(i) an amount higher than the negotiated purchase price; or
(ii) any fee or charge in addition to the negotiated purchase price.
(2) The provisions of Subsection (1)(c) do not prohibit a dealer from making one or
more loan or lease payments for a motor vehicle if making the payments is:
(a) stated in writing in a motor vehicle contract of sale, document of sale, contract,
request for proposal, or other document; or
(b) stated in the notice to the lienholder of the trade-in of the vehicle as required by
Subsection 
41-3-402
(5).
(3) Subsection (1)(d) does not prohibit a licensee from charging any of the following in
addition to the negotiated purchase price detailed on the transaction disclosure form required
pursuant to Section 
41-3-401.6
:
(a) a temporary permit fee pursuant to Section 
41-1a-211
;
(b) a fee required in Chapter 1a, Part 5, Titling Requirement;
(c) motor vehicle registration fees required under this title;
(d) a dealer documentary service fee as described in rules made in accordance with
Sections 
41-3-301
 and 
41-3-302
;
(e) sales and use taxes as required by Title 59, Chapter 12, Sales and Use Tax Act;
(f) for the purchase of a semi-tractor with a gross vehicle weight rating of over 14,000
pounds, an increase to the negotiated purchase price paid by the licensee that is imposed by the
manufacturer after the negotiated purchase price is determined by the licensee and the
purchaser; or
(g) any other tax or fee required by federal or state law to be paid by the purchaser of a
motor vehicle.
[
(3)
] 
(4) (a)
 [
A
] 
Except as provided in Subsection (4)(b), a
 person who violates the
provisions of this section is subject to the penalties provided in Section 
41-3-701
 and
Subsection 
41-3-702
(1)(a).
(b) A person who violates Subsection (1)(d) is subject to the penalties provided in
Subsection 
41-3-702
(1)(c).
(5) (a) Subsection (1)(d) does not apply to a sale at auction and does not prohibit a
licensee who conducts an auction from charging the winning bidder fees related to the auction
or other vehicle-related services.
(b) Subsection (1)(d) does not apply to the sale of motor vehicles in a fleet transaction.
Section 4. Section 
41-3-401.6
 is enacted to read:
 41-3-401.6.
Transaction disclosure form.
(1) (a) Before a sale is finalized, a licensee shall provide the transaction disclosure
form described in Subsection (3).
(b) The licensee and the purchaser shall each execute the transaction disclosure form to
memorialize the negotiated terms and prices of the sale.
(c) The licensee shall provide the purchaser a copy of the transaction disclosure form.
(2) The commission shall create the transaction disclosure form as described in
Subsection (3).
(3) The transaction disclosure form shall include:
(a) the negotiated sale price of the vehicle;
(b) the negotiated value of the trade-in vehicle, if applicable;
(c) an itemized list of the following legally required taxes and fees:
(i) a temporary permit fee pursuant to Section 
41-1a-211
;
(ii) a fee required in Chapter 1a, Part 5, Titling Requirement;
(iii) motor vehicle registration fees required under this title;
(iv) a dealer documentary service fee as described in rules made in accordance with
Sections 
41-3-301
 and 
41-3-302
;
(v) sales and use taxes required by Title 59, Chapter 12, Sales and Use Tax Act; and
(vi) any other taxes or fees required by federal or state law to be paid by the purchaser
of a motor vehicle;
(d) the subtotal of the amounts described in Subsections (3)(a) through (c);
(e) any other optional charges as negotiated by the licensee and purchaser; and
(f) the total amount for which the licensee agrees to seek arrangements for financing, if
applicable.
(4) A transaction disclosure form described in this section is not required for a sale at
auction or a fleet transaction.
Section 5. Section 
41-3-702
 is amended to read:
41-3-702.
Civil penalty for violation.
(1) The following are civil violations under this chapter and are in addition to criminal
violations under this chapter:
(a) Level I:
(i) failing to display business license;
(ii) failing to surrender license of salesperson because of termination, suspension, or
revocation;
(iii) failing to maintain a separation from nonrelated motor vehicle businesses at
licensed locations;
(iv) issuing a temporary permit improperly;
(v) failing to maintain records;
(vi) selling a new motor vehicle to a nonfranchised dealer or leasing company without
licensing the motor vehicle;
(vii) special plate violation;
(viii) failing to maintain a sign at a principal place of business; or
(ix) failing to store a salvage vehicle purchased at a motor vehicle auction in a secure
location until the purchaser or a transporter has provided the proper documentation to take
possession of the salvage vehicle.
(b) Level II:
(i) failing to report sale;
(ii) dismantling without a permit;
(iii) manufacturing without meeting construction or vehicle identification number
standards;
(iv) withholding customer license plates;
(v) selling a motor vehicle on consecutive days of Saturday and Sunday; or
(vi) failing to record and report the sale of a salvage vehicle at a motor vehicle auction
as described in Section 
41-3-201
.
(c) Level III:
(i) operating without a principal place of business;
(ii) selling a new motor vehicle as a dealer who is not a direct-sale manufacturer
without holding the franchise;
(iii) crushing a motor vehicle without proper evidence of ownership;
(iv) selling from an unlicensed location;
(v) altering a temporary permit;
(vi) refusal to furnish copies of records;
(vii) assisting an unlicensed dealer or salesperson in sales of motor vehicles;
(viii) advertising violation;
(ix) failing to separately identify the fees required by Title 41, Chapter 1a, Motor
Vehicle Act;
(x) encouraging or conspiring with unlicensed persons to solicit for prospective
purchasers; [
or
]
(xi) selling, offering for sale, or displaying for sale or exchange a vehicle, vessel, or
outboard motor in violation of Section 
41-1a-705
[
.
]
; or
(xii) a violation of Subsection 
41-3-211
(1)(d).
(2) (a) The schedule of civil penalties for violations of Subsection (1) is:
(i) Level I: $25 for the first offense, $100 for the second offense, and $250 for the third
and subsequent offenses;
(ii) Level II: $100 for the first offense, $250 for the second offense, and $1,000 for the
third and subsequent offenses; and
(iii) Level III: $250 for the first offense, $1,000 for the second offense, and $5,000 for
the third and subsequent offenses.
(b) When determining under this section if an offense is a second or subsequent
offense, only prior offenses committed within the 12 months before the commission of the
current offense may be considered.
(3) Knowingly selling a salvage vehicle, as defined in Section 
41-1a-1001
, without
disclosing that the salvage vehicle has been repaired or rebuilt is a civil violation in addition to
a criminal violation under Section 
41-1a-1008
.
(4) The civil penalty for a violation under Subsection (3) is:
(a) not less than $1,000, or treble the actual damages caused by the person, whichever
is greater; and
(b) reasonable attorney fees and costs of the action.
(5) A civil action may be maintained by a purchaser or by the administrator.
Section 6. 
Effective date.
This bill takes effect on July 1, 2023.