From franchise system protections and untaxed diagnostic labor to home solicitation rules and a study on loud exhaust systems, 2023 will go down as a history-making and successful year for Virginia dealers in the General Assembly.

VADA entered 2023 with a groundbreaking bill to protect dealers and consumers against auto manufacturer-controlled sales processes. This “agency” model removes local incentive for investment, hurts competition, and takes away local advocates for consumers in need of automotive sales or services.

The bills introduced by VADA prohibit such behaviors in franchise agreements, continuing the current practices of dealers selling cars and trucks and offering financing options, extended service contracts, and ancillary products. The legislation also makes additional changes to strengthen the franchise system.

VADA’s franchise bills, House Bill 1469 and Senate Bill 871, sped through their respective chambers. The House version, sponsored by Del. Jay Leftwich, R-Chesapeake, was the first bill to pass both chambers — out of thousands of other bills under consideration, receiving unanimous support from both the House and Senate. The Senate version, sponsored by Sen. Scott Surovell, D-Mount Vernon, followed closely after. The bills then went to Governor Glenn Youngkin for signing into law.

Beyond this precedent-setting bill, here is a recap of other legislation VADA monitored either with support or opposition.

Passed Legislation

HB 2372 (Wyatt)/SB 1135 (McDougle): Gives judge or jury permissive inference that possession of a catalytic converter that has been removed is a violation of a Class 6 felony. There are carveouts for motor vehicle dealers, repair shops, and salvage yards. The bill further states that if you sell or offer for sale or purchase a catalytic converter from an exhaust system that has been detached from a motor vehicle, except under a scrap metal purchaser, you are guilty of a Class 6 felony.

• HB 2372 Passed House (75-24) and Senate (40-0)
• SB 1135 Passed House (40-0) and Senate (75-24)

HB 1677 (Taylor): Clarifies that diagnostic work for automotive repair and emergency roadside service for motor vehicles is considered labor and thus not taxed. The bill passed the House and Senate unanimously.

HB 2422 (Batten)/SB 1509 (Mason): Modifies home solicitation sales and creates an exemption for licensed dealers by the Motor Vehicle Dealer Board. 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 a customer’s home do not come under the act. The bills passed the House and Senate unanimously.

SB 1085 (Ebbin): Creates a study to address the issue of loud decibel levels in vehicle exhaust systems. The bill would have originally limited the decibel level to 85 (50 feet away). 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 didn’t want dealers harmed by the bill. The study work group will include representatives of relevant stakeholders and will be completed by the House and Senate Transportation committees by Nov. 1, 2023. The bill passed the Senate 31-8 and House 77-21.

Failed Legislation

SB 815 (Surovell): Expands the definition of “consumer” under lemon law to also include a motor vehicle used primarily for business purposes.

• Passed Senate Transportation 7-6-1 and Senate 27-12
• Laid on Table in House Commerce & Energy Subcommittee, 4-2

HB 1378 (Wilt): There were a number of bills in the House and Senate to repeal the 2021 law to adopt California Air Resource Board standards and its zero-emissions vehicle (ZEV) requirements in Virginia. HB 1378 passed out of the House on partisan lines and headed to a Senate committee, where the legislation died on a party-line 8-7 vote. Therefore, Virginia will remain under the EV mandates adopted by California starting with the 2025 model year.

HB 1588 (Sullivan)/SB 1466 (Marsden): Would have created the Electric Vehicle Rural Infrastructure Program & Fund to assist private developers with non-utility costs associated with the installation of electric vehicle charging stations. It would have made a private developer eligible to receive grants of 70% of such non-utility costs for EV charging stations installed in a city or county that meets the criteria of a distressed locality as provided in the bill. Grants would have been capped in any fiscal year at $25 million.

• HB 1588
  • Passed 6-0 in Agriculture, Chesapeake & Natural Resources subcommittee and 18-4 in full Committee. It was then referred to Appropriations and tabled, 12-9.
    
    
• SB 1466
  • Passed Senate Transportation 14-1 and Finance & Appropriations 16-0, then the full Senate 38-0
  • Passed House Agriculture, Chesapeake & Natural Resources 17-3 and referred to Appropriations; it was not heard

HB 2468 (Willett): If a manufacturer (that produces electric vehicles) operates a location to sell vehicles through an exemption where no franchised dealer is available to operate the location (as outlined in subsection 4 of 46.2-1572), then in perpetuity, the manufacturer does not need to go through the DMV Commissioner approval process. It was laid on the table 7-2 in the House Transportation

Subcommittee #1 DMV.HB 1988 (Guzman): Required all employees of private employers to provide paid sick leave. It would also have required accrued paid sick leave to be carried over to the following year. The bill was laid on the table.