REPORT TITLE: 
Motor Vehicles


DESCRIPTION:
Establishes violation of motor vehicle industry licensing laws
if a salesperson or dealer sells or leases a new or used motor
vehicle without providing specific written documentation of
whether there is a 3-day right of rescission. (HB411 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        411
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO MOTOR VEHICLES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1. Section 437-28, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (a) to read as follows:
 
 3      "(a)  In addition to any other actions authorized by law,
 
 4 the board, after notice and hearing as provided in chapter 91,
 
 5 and subject to appeal to the circuit court of the circuit in
 
 6 which the board has jurisdiction under the procedure and rules
 
 7 prescribed by the laws of the State or the applicable rules of
 
 8 the courts pertaining to appeals to circuit courts, may suspend,
 
 9 revoke, fine, or deny the renewal of any license, or prior to
 
10 notice and hearing deny the issuance of any license for any cause
 
11 authorized by law, including but not limited to circumstances
 
12 where the board finds that the applicant or holder, or any
 
13 officer, director, general manager, trustee, partner, or
 
14 stockholder owning more than ten per cent interest of the
 
15 applicant or holder:
 
16      (1)  Has intentionally made a false statement of a material
 
17           fact in the application for a license or in any other
 
18           statement required by this chapter or has obtained or
 
19           attempted to obtain a license by fraud or
 
20           misrepresentation;
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (2)  Has failed to comply, observe, or adhere to any
 
 2           provision of this chapter or any other law relating to
 
 3           the sale, taxing, or licensing of motor vehicles or any
 
 4           rule or order made pursuant to this chapter;
 
 5      (3)  Has committed a fraudulent act in selling, purchasing,
 
 6           or otherwise dealing in motor vehicles or has 
 
 7           misrepresented the terms and conditions of a sale,
 
 8           purchase, or contract for sale or purchase of a motor
 
 9           vehicle or any interest therein including an option to
 
10           purchase motor vehicles;
 
11      (4)  Has engaged in business under a past or present license
 
12           issued pursuant to this chapter, in a manner as to
 
13           cause injury to the public or to those with whom one is
 
14           dealing;
 
15      (5)  Has failed to comply, observe, or adhere to any law in
 
16           any other respect on account whereof the board may deem
 
17           the applicant or holder to be an unfit or improper
 
18           person to hold a license;
 
19      (6)  Has failed to meet or maintain the conditions and
 
20           requirements necessary to qualify for the issuance of a
 
21           license;
 
22      (7)  Is insolvent or has filed or is the subject of petition
 
23           for bankruptcy, wage earner's plan, or financial
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           reorganization plan; or has made or proposes to make an
 
 2           assignment for benefit of creditors;
 
 3      (8)  In the case of an individual applicant or holder of a
 
 4           license, if the applicant or holder is not at least
 
 5           eighteen years of age; in the case of a partnership
 
 6           applicant or holder of a license, if any general or
 
 7           limited partner thereof is not at least eighteen years
 
 8           of age;
 
 9      (9)  Has charged more than the legal rate of interest on the
 
10           sale or purchase or attempted sale or purchase or in
 
11           arranging the sale or purchase of a motor vehicle or
 
12           any interest therein including an option to purchase;
 
13     (10)  Has violated any of the laws pertaining to false
 
14           advertising or to credit sales in the offering,
 
15           soliciting, selling, or purchasing, or arranging to
 
16           sell or purchase a motor vehicle or any interest
 
17           therein;
 
18     (11)  Has wilfully failed or refused to perform any
 
19           unequivocal and indisputable obligation under any
 
20           written agreement involving the sale or purchase of a
 
21           motor vehicle or any interest therein including an
 
22           option to purchase;
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1     (12)  Has been denied the issuance of a license under this
 
 2           chapter for substantial culpable cause or for having
 
 3           had a license issued under this chapter suspended,
 
 4           revoked, or the renewal thereof denied for substantial
 
 5           culpable cause;
 
 6     (13)  Has entered or has attempted to enter or proposes to
 
 7           enter into any contract or agreement contrary to this
 
 8           chapter or any rule adopted thereunder;
 
 9     (14)  Has been or is engaged or proposes to engage in the
 
10           business of selling new motor vehicles as a dealer or
 
11           auction without a proper franchise therefor;
 
12     (15)  Has at any time employed or utilized or attempted or
 
13           proposed to employ or utilize any person not licensed
 
14           under this chapter who is required to be so licensed;
 
15     (16)  Has entered or attempted to enter any one-payment
 
16           contract, where the contract is required to be signed
 
17           by the purchaser prior to removal of the motor vehicle
 
18           for test driving from the seller's premises;
 
19     (17)  Being a salesperson or dealer:
 
20           (A)  Has required a purchaser of motor vehicles as a
 
21                condition of sale and delivery thereof to purchase
 
22                special features, appliances, accessories, or
 
23                equipment not desired or requested by the
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                purchaser; provided that this prohibition shall
 
 2                not apply as to special features, appliances,
 
 3                accessories, or equipment which are ordinarily
 
 4                installed on the vehicle when received or acquired
 
 5                by the dealer;
 
 6           (B)  Has represented and sold as an unused motor
 
 7                vehicle any motor vehicle which has been operated
 
 8                as a demonstrator, leased, or U-drive motor
 
 9                vehicle;
 
10           (C)  Has sold a new motor vehicle without providing or
 
11                securing for the purchaser the standard factory
 
12                new car warranty for the vehicle, unless the
 
13                dealer or salesperson clearly notes in writing on
 
14                the sales contract that the new motor vehicle is
 
15                sold without the standard factory warranty;
 
16           (D)  Has sold a new motor vehicle covered by a standard
 
17                factory warranty without informing the purchaser
 
18                in writing that any repairs or other work
 
19                necessary on any accessories which were not
 
20                installed by the manufacturer of the vehicle may
 
21                not be obtainable in a geographic location other
 
22                than where the purchase occurred; provided that
 
23                the notice required by this section shall conform
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                to the plain language requirements of section
 
 2                487A-1, regardless of the dollar amount of the
 
 3                transaction; [or] 
 
 4           (E)  Has engaged in any improper business conduct,
 
 5                including but not limited to employing,
 
 6                contracting with, or compensating consumer
 
 7                consultants; or
 
 8           (F)  Has sold or leased a new or used motor vehicle
 
 9                without written documentation that contains the
 
10                following provision printed legibly in at least
 
11                fourteen point bold typeface print, upon which the
 
12                salesperson or dealer shall appropriately indicate
 
13                the type of sale, and upon which both the customer
 
14                and salesperson or dealer shall place their
 
15                initials in the designated spaces, prior to the
 
16                signing of the contract of sale or lease:
 
17                "This (IS) (IS NOT) a door-to-door sale.  There
 
18                (IS A) (IS NO) 3-DAY RIGHT TO CANCEL on this
 
19                purchase.
 
20                      Customer's Initials         Salesperson's  
 
21                                            or Dealer's Initials";
 
22     (18)  Being an applicant or holder of a dealer's license:
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           (A)  Has sold or proposed to sell new motor vehicles
 
 2                without providing for the maintenance of a
 
 3                reasonable inventory of parts for new vehicles or
 
 4                without providing and maintaining adequate repair
 
 5                facilities and personnel for new vehicles at
 
 6                either the main licensed premises or at any branch
 
 7                location;
 
 8           (B)  Has employed or proposed to employ any salesperson
 
 9                who is not duly licensed under this chapter; or
 
10           (C)  Has sold or proposed to sell new motor vehicles
 
11                without being franchised therefor;
 
12     (19)  Being an applicant or holder of an auction's license
 
13           has sold or proposed to sell new motor vehicles without
 
14           being franchised therefor; or
 
15     (20)  Being an applicant for a salesperson's license:
 
16           (A)  Does not intend to be employed as a salesperson
 
17                for a licensed motor vehicle dealer; or
 
18           (B)  Intends to be employed as a salesperson for more
 
19                than one dealer."
 
20      SECTION 2.  Statutory material to be repealed is bracketed.
 
21 New statutory material is underscored.
 
22      SECTION 3.  This Act shall take effect upon its approval.