COMMITTEE ON FEDERAL MANDATES AND PROPERTY RIGHTS
HOUSE OF REPRESENTATIVES AMENDMENTS TO H.B. 2070
(Reference to printed bill)
Strike everything after the enacting clause and insert:
"Section 1. Section 28-4301, Arizona Revised Statutes, is amended to read:
28-4301. Definitions
In this chapter, unless the context otherwise requires:
1. "Area of responsibility" means the area surrounding an individual dealer that the factory designates as that dealer's individual primary geographic territory for the purpose of marketing, promoting, selling and leasing new motor vehicles. In the absence of the factory designated area, the area of responsibility is that geographical area surrounding a dealer that lies closer to that dealer than to other dealers of the same line‑make.
2. "Automotive recycler" means a person who is engaged in the business of buying or acquiring a motor vehicle solely for the purpose of dismantling, selling or otherwise disposing of the parts or accessories and who dismantles six or more vehicles in a calendar year.
3. "Branch license" means a license that is issued by the director to a licensed motor vehicle dealer and that permits the licensee to sell motor vehicles from an established place of business within the same county but other than the original or principal place of business for which the license was issued.
4. "Broker" means a person who for any
fee, commission or other valuable consideration,
REGARDLESS OF THE FORM OR TIME OF PAYMENT, offers to provide, provides
or represents that the person will provide a service of arranging or
assisting in effecting the purchase OR LEASE of
a motor vehicle and who is not:
(a) A new motor vehicle dealer or an employee or agent of a new motor vehicle dealer.
(b) A used motor vehicle dealer or an employee or agent of a used motor vehicle dealer.
(c) A manufacturer or employee or agent of a manufacturer.
(d) An auctioneer or engaged in the auto auction business.
(e) A wholesale motor vehicle dealer.
5. "Community" means the relevant market area. For the purposes of this paragraph, "relevant market area" means the incorporated city or town in which the franchise is located.
6. "Distributor" means a person who either:
(a) Sells or distributes new motor vehicles to new motor vehicle dealers in this state.
(b) Maintains distributor representatives in this state.
7. "Distributor branch" means a branch office maintained or availed of by a distributor for either:
(a) The sale of new motor vehicles to new motor vehicle dealers in this state.
(b) Directing or supervising its representatives in this state.
8. "Established place of business":
(a) Means a permanent enclosed building or structure that is owned either in fee or leased with sufficient space to display two or more motor vehicles of a kind and type that the dealer is licensed to sell and that is devoted principally to the use of a motor vehicle dealer in the conduct of the business of the dealer.
(b) In the case of a used motor vehicle dealer, trailer dealer or semitrailer dealer:
(i) Need not be a permanent building or structure or part of a permanent building or structure.
(ii) May be a vacant lot or part of a vacant lot.
(iii) Does not mean or include a residence, tent, temporary stand or temporary quarters or permanent quarters occupied pursuant to a temporary arrangement.
(c) In the case of an automotive recycler, means a permanent site or location at which the business of an automotive recycler is or will be conducted.
9. "Exhibitor" means a manufacturer of new motor homes that exhibits new motor homes at a special event.
10. "Factory branch" means a branch office maintained or availed of by a manufacturer for either:
(a) The sale of new motor vehicles to distributors or the sale of new motor vehicles to new motor vehicle dealers in this state.
(b) Directing or supervising its representatives in this state.
11. "Financial institution" means a bank, trust company, savings and loan association, credit union, consumer lender, international banking facility or holding company that is licensed, regulated or insured by the department of financial institutions, the federal deposit insurance corporation, the office of thrift supervision, the comptroller of the currency, the national credit union share insurance fund or the national credit union administration.
12. "Franchise" means a contract between two or more persons if all of the following conditions are included:
(a) A commercial relationship of definite duration or continuing indefinite duration is involved.
(b) The franchisee is granted the right to offer, sell and service in this state new motor vehicles manufactured or distributed by the franchisor.
(c) The franchisee, as a separate business, constitutes a component of the franchisor's distribution system.
(d) The operation of the franchisee's business is substantially associated with the franchisor's trademark, service mark, trade name, advertising or other commercial symbol designating the franchisor.
(e) The operation of the franchisee's business is substantially reliant on the franchisor for the continued supply of new motor vehicles, parts and accessories.
13. "Franchisee" means a person who both:
(a) Receives new motor vehicles from the franchisor under a franchise.
(b) Offers and sells to and services new motor vehicles for the general public.
14. "Franchisor" means a person who both:
(a) Manufactures or distributes new motor vehicles.
(b) May enter into a franchise.
15. "Importer" means a person who transports or arranges for the transportation of a foreign manufactured new motor vehicle into the United States for sale in this state.
16. "Lead" means any retail consumer who satisfies all of the following:
(a) Responds to a factory‑directed program that obtains consumer contact information and that provides such information to one or more dealers.
(b) Expresses an interest to the factory in purchasing, leasing or acquiring any vehicle or product, service or financing available from the dealers of that factory.
(c) Does not qualify for any reasonable factory sponsored employee, retiree or vendor new vehicle purchase program or any other reasonable similar factory new vehicle purchase program.
17. "Line‑make" means those motor vehicles that are offered for sale, lease or distribution under a common name, trademark, service mark or brand name of the manufacturer of those same motor vehicles.
18. "Major component part" includes a motor vehicle or vehicle part that the manufacturer has assigned any factory, motor, serial or other identification number or mark.
19. "Manufacturer" means any person who either:
(a) Manufactures or assembles new motor vehicles.
(b) Manufactures or installs on previously assembled truck chassis special bodies or equipment that when installed forms an integral part of the new motor vehicle and that constitutes a major manufacturing alteration, excluding the installation of a camper on a pickup truck.
20. "Motor home" means a motor vehicle that is primarily designed as temporary living quarters and that:
(a) Is built onto as an integral part of, or is permanently attached to, a motor vehicle chassis.
(b) Contains at least four of the following independent life support systems if each is permanently installed and designed to be removed only for purposes of repair or replacement:
(i) A cooking facility with an on board ONBOARD fuel
source.
(ii) A gas or electric refrigerator.
(iii) A toilet with exterior evacuation.
(iv) A heating or air
conditioning system with an on board ONBOARD power or fuel source separate from the
vehicle engine.
(v) A potable water supply system that includes at least a sink, a faucet and a water tank with an exterior service supply connection.
(vi) A 110‑125 volt electric power supply.
21. "Motor vehicle" means an automobile, motor bus, motorcycle, truck or truck tractor or any other self‑propelled vehicle, trailer or semitrailer.
22. "Motor vehicle dealer" means a new motor vehicle dealer, a used motor vehicle dealer, a broker or a wholesale motor vehicle auction dealer, excluding a person who comes into possession of a motor vehicle as an incident to the person's regular business and who sells, LEASES, auctions or exchanges the motor vehicle.
23. "New house trailer dealer" means a person who buys, sells, exchanges or offers or attempts to negotiate a sale or exchange of an interest in, or who is engaged in the business of selling, new house trailers or used house trailers taken in trade on new house trailers. For the purposes of this paragraph, "house trailer" means a vehicle, other than a motor vehicle, that is built on a chassis designed for being drawn habitation.
24. "New motor vehicle" means a motor vehicle, other than a used motor vehicle, that HAS NEVER BEEN TITLED OR REGISTERED IN THIS STATE OR ANY OTHER STATE, THE DISTRICT OF COLUMBIA, ANY TERRITORY OR POSSESSION OF THE UNITED STATES OR ANY FOREIGN STATE, PROVINCE OR COUNTRY AND THAT is held either for:
(a) Sale OR LEASE by the franchisee who first acquired the vehicle from the manufacturer or distributor of the vehicle.
(b) Sale OR LEASE by another franchisee of the same line‑make.
25. "New motor vehicle dealer" means a
person WHO IS A
FRANCHISEE AND who buys, sells, exchanges or offers or attempts to
negotiate a sale or exchange of an interest in, or who is engaged in the business
of selling OR LEASING, new motor vehicles or
used motor vehicles taken in trade on new motor vehicles or used vehicles
purchased for resale.
26. "Off‑premises display and sales" means a promotion or sale of motor vehicles for a period of time as specified by the director that both:
(a) Is sponsored by a licensed motor vehicle dealer, the licensed motor vehicle dealer's agents or the manufacturer.
(b) Takes place at a location within the same county but not at the licensee's established place of business.
27. "Off‑premises exhibition" means the exhibition of a motor vehicle for a period of time as specified by the director at a location within the same county but not at the established place of business of a licensed motor vehicle dealer and at which a solicitation or sale does not occur.
28. "Provisional automotive recycler's license" means a license that both:
(a) Is issued by the department only in conjunction with an application for an automotive recycler's license.
(b) Permits the applicant or applicants to conduct the business of an automotive recycler regulated by this chapter pending completion of the criminal records check pursuant to section 28‑4361.
29. "Provisional dealer's license" means a license that both:
(a) Is issued by the department only in conjunction with an application for a dealer's license.
(b) Permits the applicant or applicants to conduct the business of a motor vehicle dealer regulated by this chapter pending completion of the criminal records check pursuant to section 28‑4361.
30. "Retail consumer" means any person purchasing, leasing or acquiring or possibly purchasing, leasing or acquiring a vehicle or product, service or financing not for resale.
31. "Service" means any service that is sold, leased or provided to retail consumers and that directly relates to the ownership or leasing of a new or used motor vehicle, including extended service contracts or motor vehicle warranty and nonwarranty repairs or maintenance, including both parts and labor.
32. "Special event" means an exhibition of new motor homes by a motor vehicle dealer licensed to sell new motor homes or an exhibitor for a period of time specified by the director at a location in this state other than the licensee's or exhibitor's established place of business.
33. "Used motor vehicle" means a motor
vehicle that has been sold, bargained, exchanged or given away or the title to
the motor vehicle has been transferred from the person who first acquired the
vehicle from the manufacturer, or importer, dealer or agent of the manufacturer
or importer, and that has been placed in bona fide
consumer use. For the purposes of this paragraph, "bona fide consumer
use" means actual operation by an owner who acquired a new motor vehicle
both:
(a) For use in the
owner's business or for pleasure or otherwise.
(b) for which a certificate of title has been
issued or that has been registered as provided by law.
34. "Used motor vehicle dealer" means a person, other than a new motor vehicle dealer, who buys, sells, auctions, exchanges or offers or attempts to negotiate a sale or exchange of an interest in, or who is engaged in the business of selling, four or more used motor vehicles in a continuous twelve month period. Used motor vehicle dealer does not include a wholesale motor vehicle auction dealer.
35. "Wholesale motor vehicle auction dealer" means a person who both:
(a) Is in the business of providing auction services solely in wholesale transactions to motor vehicle dealers licensed by this state or any other jurisdiction.
(b) Does not buy, sell or own the motor vehicles the auction dealer auctions in the ordinary course of business.
36. "Wholesale motor vehicle dealer" means a person who sells used motor vehicles only to licensed motor vehicle dealers.
Sec. 2. Section 28-4415, Arizona Revised Statutes, is amended to read.
28-4415. Advertising
A. A broker shall not advertise or offer for sale or exchange any specific motor vehicle.
B. A motor vehicle dealer shall not advertise or offer for sale or exchange any specific motor vehicle unless one of the following applies:
1. The motor vehicle is for sale and located at the motor vehicle dealer's established place of business.
2. The motor vehicle dealer discloses in the advertisement the specific street address and business hours where the motor vehicle may be inspected by a retail consumer.
3. The motor vehicle is available to the motor vehicle dealer directly from the manufacturer or distributor of the motor vehicle at the time of the advertisement or offer.
C. B. A broker or motor vehicle dealer may advertise the broker's or motor vehicle dealer's service of arranging or assisting in effecting the purchase of a new motor vehicle from a new motor vehicle dealer and if the broker is advertising the broker’s service of arranging the purchase of new motor vehicles, specify the line makes and models of the new vehicles.
D. C. A broker may not advertise the price of or payment terms for any motor vehicle. A broker shall disclose that the advertiser is a broker and shall clearly and conspicuously state the following:
“All motor vehicles arranged for sale are subject to price and availability from the selling motor vehicle dealer.”
Sec. 3. Section 28-4416, Arizona Revised Statutes, Is amended to read:
28-4416. Deposits
A broker shall only accept a purchase deposit that is made payable to a motor vehicle dealer. A broker shall not accept a purchase deposit relating to the sale or lease of a motor vehicle unless the motor vehicle is available to the broker at the broker's licensed place of business or is available as prescribed in section 28‑4415 at the time either the broker or motor vehicle dealer accepts the deposit one of the following applies:
1. the motor vehicle is for sale or lease and located at the motor vehicle dealer's established place of business.
2. The motor vehicle dealer discloses in the advertisement the specific street address and business hours where the motor vehicle may be inspected by a retail consumer.
3. The motor vehicle is available to the motor vehicle dealer directly from the manufacturer or distributor of the motor vehicle at the time of the advertisement or offer.
Sec. 4. Section 28-4417, Arizona Revised Statutes, Is amended to read:
28-4417. Required disclosures on sales or lease contracts
A motor vehicle dealer shall disclose in a clear and conspicuous manner on any contract for the sale or lease of a motor vehicle to a retail consumer each of the following:
1. Whether or not the transaction is subject to a fee or other compensation regardless of the form or time of payment received by a broker from the selling or leasing motor vehicle dealer.
2. The name of the broker, if applicable.
Sec. 5. Section 28-4418, Arizona Revised Statutes, is amended to read:
28-4418. Warranties and rebates in broker transactions
A. A manufacturer or distributor shall not dishonor
a warranty, rebate or other incentive offered to the public or a motor vehicle
dealer in connection with the sale or
lease of a new motor vehicle to a retail consumer based solely on
the fact that a broker arranged, or negotiated
the sale or lease.
B. This section does not prohibit the disallowance of the warranty, rebate or incentive if the retail consumer or motor vehicle dealer is ineligible to receive the rebate or incentive pursuant to any other term or condition of a rebate or incentive program.
Sec. 6. Section 28-4419, Arizona Revised Statutes, is amended to read:
28-4419. Required and prohibited activities
If providing a service of arranging or assisting in effecting the purchase or lease of a motor vehicle by a retail consumer, a broker or motor vehicle dealer who is licensed pursuant to this chapter:
1. Shall:
(a) Execute a written brokering agreement and provide a completed copy to both of the following:
(i) The retail consumer entering into the brokering agreement. The completed copy shall be provided before the retail consumer signs an agreement for the purchase or lease of the motor vehicle described in the brokering agreement or before the broker or motor vehicle dealer accepts one hundred dollars or more from the retail consumer, whichever occurs first.
(ii) The selling or leasing motor vehicle dealer. The completed copy shall be provided before the selling or leasing motor vehicle dealer enters into a purchase or lease agreement with the retail consumer.
(b) On demand of a retail consumer, refund any purchase money, including purchase deposits, at any time before the retail consumer signs a motor vehicle purchase or lease agreement with a selling or leasing motor vehicle dealer of the motor vehicle described in the brokering agreement.
(c) On demand of a retail consumer, cancel a brokering agreement and refund any monies paid by a retail consumer, including a brokerage fee, under any of the following circumstances:
(i) If the final price of the brokered motor vehicle exceeds the purchase or lease price listed in the brokering agreement.
(ii) If the motor vehicle delivered is not as described in the brokering agreement.
(iii) If the brokering agreement expires before the retail consumer is presented with a purchase or lease agreement from a selling or leasing motor vehicle dealer that is arranged through the broker and that contains a purchase or lease price at or below the price listed in the brokering agreement.
(d) Disclose to the retail consumer and selling or leasing motor vehicle dealer as soon as practicable whether the broker receives or does not receive a fee or other compensation, regardless of the form or time of payment, from the selling or leasing motor vehicle dealer and the dollar amount of any fee that the retail consumer is obligated to pay to the broker. This arrangement shall be confirmed in a brokering agreement.
(e) Maintain records pursuant to section 28‑4403.
(f) Maintain for a minimum of three years a copy of the executed brokering agreement and other notices and documents related to each brokered transaction.
(g) Advise the retail consumer, before accepting any money, that a full refund will be given if the motor vehicle ordered through the broker is not obtained for the retail consumer or if the service contracted for is not provided.
2. Shall not:
(a) Accept a purchase deposit from any retail consumer that exceeds two and one-half per cent of the selling or leasing price of the motor vehicle described in the brokering agreement.
(b) Receive a fee or other compensation regardless of the form or time of payment from more than one source if providing services to a retail consumer as either a broker or motor vehicle dealer in the same transaction.
(c) Complete or perform any of the following services for a retail consumer:
(i) The VEHICLE title.
(ii) The vehicle registration.
(iii) DELIVERY OF A NEW MOTOR VEHICLE.
Sec. 7. Section 28-4420, Arizona Revised Statutes, is amended to read:
28-4420. Contents of brokering agreement
A brokering agreement shall contain the following terms, conditions, requirements and disclosures:
1. The name, address, license number and telephone number of the broker.
2. A complete description, including line‑make, model, year and color of the motor vehicle and the desired options.
3. The following statement:
The following information shall be completed before the signing of this brokering agreement:
(a) The dollar purchase or lease price of vehicle: _______________.
(b) The date this agreement will expire if a purchase or lease agreement from a selling or leasing dealer is not presented for your signature: ___________________________.
(c) The fee or other compensation regardless of the form or time of payment that you are obligated to pay, if any: _________________.
4. A notice that is printed in conspicuous type, that is placed immediately below the statement required by paragraph 3 and that states whether or not a fee or other compensation regardless of the form or time of payment is received from the selling dealer.
5. The following notice on the face of the brokering agreement in conspicuous type, circumscribed by a line, that reads as follows:
Notice
This is an agreement to provide services. This is not an agreement for the purchase or lease of a vehicle. Arizona law gives you the following rights and protection:
Once you have signed this agreement, you have the right to cancel it and receive a full refund of any monies paid, including any brokerage fee you may have paid, under any of the following circumstances:
(a) The final price of the vehicle exceeds the purchase or lease price listed above.
(b) The vehicle is not as described above on delivery.
(c) This agreement expires before you are presented with a selling or leasing dealer's purchase or lease agreement.
If you have paid a purchase deposit, you have the right to receive a refund of that deposit at any time before you sign a vehicle purchase or lease agreement with a selling or leasing dealer. Purchase deposits are limited by law to no more than 2.5 per cent of the purchase or lease price of a vehicle. If you are unable to resolve a dispute with your broker or auto buying service, please contact an investigator of the department of transportation.
6. The date the agreement is executed.
7. The signature of the broker and the retail consumer."