HF 1804

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/15/2023 09:11am

A bill for an act
relating to consumer protection; modifying and adding provision governing the
sale of certain motor vehicles; amending Minnesota Statutes 2022, sections 53C.01,
subdivision 12c, by adding a subdivision; 53C.06; 53C.08, subdivisions 1, 1a;
325F.662, subdivisions 2, 8a, by adding subdivisions.

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

Section 1.

Minnesota Statutes 2022, section 53C.01, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Global positioning system starter interrupt device. new text end

new text begin "Global positioning
system starter interrupt device" or "GPS starter interrupt device" means a device installed
on a motor vehicle that enables an individual who is not in possession of the motor vehicle
to remotely disable the motor vehicle's ignition. GPS starter interrupt device includes a
device commonly referred to as a fuel or ignition kill switch.
new text end

Sec. 2.

Minnesota Statutes 2022, section 53C.01, subdivision 12c, is amended to read:

Subd. 12c.

Theft deterrent device.

"Theft deterrent device" means the following devices:

(1) a vehicle alarm system;

(2) a window etch product;

(3) a body part marking product;

(4) a steering lock; new text begin or
new text end

(5) a pedal or ignition lock deleted text begin ; or deleted text end new text begin .
new text end

deleted text begin (6) a fuel or ignition kill switch.
deleted text end

Sec. 3.

Minnesota Statutes 2022, section 53C.06, is amended to read:

53C.06 VEHICLE CONDITIONAL SALES INSTALLMENT CONTRACT;
EXAMINATION, SPECIAL INVESTIGATION, COST ASSESSMENT.

new text begin Subdivision 1. new text end

new text begin Authority of the commissioner to investigate contracts. new text end

deleted text begin (a) deleted text end For the
purpose of discovering violations of sections 53C.01 to 53C.14 or securing information
lawfully required by the commissioner hereunder, the commissioner may, at any time, either
personally or by a person or persons duly designated by the commissioner, investigate the
conditional sales contracts and business related to the conditional sales contracts and examine
the books, accounts, records, and files used therein, of every licensee, assignee of the licensee,
and of every person who shall be engaged in the business of a sales finance company,
including the retail seller and assignee of the retail seller, whether the person shall act as
principal or agent, or under or without the authority of sections 53C.01 to 53C.14. For that
purpose, the commissioner and the commissioner's duly designated representative shall
have free access to the offices and places of business, books, accounts, papers, records,
files, safes, and vaults of all these persons. The commissioner and all persons duly designated
by the commissioner shall have authority to require the attendance of and to examine, under
oath, all persons whomsoever whose testimony the commissioner may require relative to
the conditional sales contract or the business or to the subject matter of any examination,
investigation, or hearing.

new text begin Subd. 2. new text end

new text begin Authority of commissioner to examine records and assess fees. new text end

deleted text begin (b) deleted text end The
commissioner may make an examination of the affairs, business, office, and records of
licensees, and of other persons subject to examination under this section, as often as
considered necessary. The commissioner may assess a fee covering the necessary costs of
an examination or special investigation under this section, section 53C.04, or reports filed
under section 53C.07. The fee is payable to the commissioner on the commissioner's request
for payment. The commissioner may maintain an action for the recovery of the costs in any
court of competent jurisdiction.

new text begin Subd. 3. new text end

new text begin Limitations on conditional sale contracts on used motor vehicles. new text end

new text begin (a) A
retail installment contract for a used motor vehicle must not include a term rendering the
contract voidable, subject to modification, or otherwise not binding on the dealer as a result
of the dealer's inability or unwillingness to sell, assign, or otherwise transfer the contract
to a third party after executing the contract.
new text end

new text begin (b) A dealer is prohibited from releasing or transferring possession of a used motor
vehicle to a buyer or prospective buyer, other than for a test drive, unless the sale and
purchase of the used motor vehicle, including all the financing terms for the sale and
purchase, is final. Once the dealer releases or transfers possession of a used motor vehicle,
other than for a test drive, the dealer is prohibited from changing the terms, including the
financing terms, of the transaction.
new text end

new text begin (c) A dealer is prohibited from taking possession of a trade-in vehicle from a buyer until
the sale and purchase of a used motor vehicle, including all the financing terms, is final.
new text end

Sec. 4.

Minnesota Statutes 2022, section 53C.08, subdivision 1, is amended to read:

Subdivision 1.

Terms and limitations.

(a) Every retail installment contract shall be in
writing, shall contain all the agreements of the parties, shall be signed by the retail buyer
and seller, and a copy signed by the retail buyer shall be furnished to such retail buyer at
the time the retail buyer executes the contract. new text begin The contract must be written in the language
used to negotiate the transaction. new text end The copy signed by both the retail buyer and retail seller
shall be provided to the retail buyer within seven days after delivery of the vehicle. With
respect to any contract executed prior to August 1, 1996, which has not been paid in full by
the retail buyer, the retail seller shall provide such retail buyer a copy signed by both the
retail buyer and retail seller within 120 days after August 1, 1996.

(b) No provisions for confession of judgment or power of attorney therefor contained
in any retail installment contract or contained in a separate agreement relating thereto, shall
be valid or enforceable.

(c) The holder of a precomputed retail installment contract may, if the contract so
provides, collect a delinquency and collection charge on each installment in arrears for a
period not less than ten days in an amount not in excess of five percent of each installment
or $5, whichever is greater. In addition to such delinquency and collection charge, the retail
installment contract, whether interest-bearing or precomputed, may provide for the payment
of attorneys' fees not exceeding 15 percent of the amount due and payable under such
contract where such contract is referred to an attorney not a salaried employee of the holder
of the contract for collection plus the court costs.

(d) Unless written notice has been given to the retail buyer of actual or intended
assignment of a retail installment contract, payment thereunder or tender thereof made by
the retail buyer to the last known holder of such contract shall be binding upon all subsequent
holders or assignees.

(e) Upon written request from the retail buyer, the holder of the retail installment contract
shall give or forward to the retail buyer a written statement of the dates and amounts of
payments and the total amount unpaid under such contract. A retail buyer shall be given a
written receipt for any payment when made in cash.

Sec. 5.

Minnesota Statutes 2022, section 53C.08, subdivision 1a, is amended to read:

Subd. 1a.

Disclosures required.

new text begin (a) new text end Prior to the execution of a retail installment contract,
the seller shall provide to a buyer, and obtain the buyer's signature on, a written disclosure
that sets forth the following information:

(1) a description and the total price of all items sold in the following categories if the
contract includes a charge for the item:

(i) a service contract;

(ii) an insurance product;

(iii) a debt cancellation agreement;

(iv) a theft deterrent device; or

(v) a surface protection product;

new text begin (2) whether a GPS starter interrupt device is installed on the motor vehicle, regardless
of whether the contract includes a charge for the GPS starter interrupt device;
new text end

deleted text begin (2) deleted text end new text begin (3) new text end the amount that would be calculated under the contract as the regular installment
payment if charges for the items referenced under clause (1) are not included in the contract;

deleted text begin (3) deleted text end new text begin (4) new text end the amount that would be calculated under the contract as the regular installment
payment if charges for the items referenced under clause (1) are included in the contract;
and

deleted text begin (4) deleted text end new text begin (5) new text end the disclosures required under this subdivision must be in at least ten-point type
and must be contained in a single document that is separate from the retail installment
contract and any other vehicle purchase documents.

new text begin (b) The disclosures required under this subdivision must be provided (1) in the buyer's
primary language if the debt settlement services provider advertises in that language, or (2)
in the language used to negotiate the transaction, regardless of whether the seller advertises
in that language.
new text end

Sec. 6.

Minnesota Statutes 2022, section 325F.662, subdivision 2, is amended to read:

Subd. 2.

Written warranty required.

(a) Every used motor vehicle sold by a dealer is
covered by an express warranty which the dealer shall provide to the consumer. At a
minimum, the express warranty applies for the following terms:

(1) if the used motor vehicle has less than 36,000 miles, the warranty must remain in
effect for at least 60 days or 2,500 miles, whichever comes first;

(2) if the used motor vehicle has 36,000 miles or more, but less than 75,000 miles, the
warranty must remain in effect for at least 30 days or 1,000 miles, whichever comes first deleted text begin . deleted text end new text begin ;
and
new text end

new text begin (3) if the used motor vehicle has 75,000 miles or more, the warranty must remain in
effect for at least ten days or 100 miles, whichever comes first.
new text end

(b) The express warranty must require the dealer, in the event of a malfunction, defect,
or failure in a covered part, to repair or replace the covered part, or at the dealer's election,
to accept return of the used motor vehicle from the consumer and provide a refund to the
consumer.

(c) For used motor vehicles with less than 36,000 miles, the dealer's express warranty
shall cover, at minimum, the following parts:

(1) with respect to the engine, all lubricated parts, intake manifolds, engine block, cylinder
head, rotary engine housings, and ring gear;

(2) with respect to the transmission, the automatic transmission case, internal parts, and
the torque converter; or, the manual transmission case, and the internal parts;

(3) with respect to the drive axle, the axle housings and internal parts, axle shafts, drive
shafts and output shafts, and universal joints; but excluding the secondary drive axle on
vehicles, other than passenger vans, mounted on a truck chassis;

(4) with respect to the brakes, the master cylinder, vacuum assist booster, wheel cylinders,
hydraulic lines and fittings, and disc brakes calipers;

(5) with respect to the steering, the steering gear housing and all internal parts, power
steering pump, valve body, piston, and rack;

(6) the water pump;

(7) the externally mounted mechanical fuel pump;

(8) the radiator;

(9) the alternator, generator, and starter.

(d) For used motor vehicles with 36,000 miles or more, but less than 75,000 miles, the
dealer's express warranty shall cover, at minimum, the following parts:

(1) with respect to the engine, all lubricated parts, intake manifolds, engine block, cylinder
head, rotary engine housings, and ring gear;

(2) with respect to the transmission, the automatic transmission case, internal parts, and
the torque converter; or, the manual transmission case, and internal parts;

(3) with respect to the drive axle, the axle housings and internal parts, axle shafts, drive
shafts and output shafts, and universal joints; but excluding the secondary drive axle on
vehicles, other than passenger vans, mounted on a truck chassis;

(4) with respect to the brakes, the master cylinder, vacuum assist booster, wheel cylinders,
hydraulic lines and fittings, and disc brake calipers;

(5) with respect to the steering, the steering gear housing and all internal parts, power
steering pump, valve body, and piston;

(6) the water pump;

(7) the externally mounted mechanical fuel pump.

(e)(1) A dealer's obligations under the express warranty remain in effect notwithstanding
the fact that the warranty period has expired, if the consumer promptly notified the dealer
of the malfunction, defect, or failure in the covered part within the specified warranty period
and, within a reasonable time after notification, brings the vehicle or arranges with the dealer
to have the vehicle brought to the dealer for inspection and repair.

(2) If a dealer does not have a repair facility, the dealer shall designate where the vehicle
must be taken for inspection and repair.

(3) In the event the malfunction, defect, or failure in the covered part occurs at a location
which makes it impossible or unreasonable to return the vehicle to the selling dealer, the
consumer may have the repairs completed elsewhere with the consent of the selling dealer,
which consent may not be unreasonably withheld.

(4) Notwithstanding the provisions of this paragraph, a consumer may have nonwarranty
maintenance and nonwarranty repairs performed other than by the selling dealer and without
the selling dealer's consent.

(f) Nothing in this section diminishes the obligations of a manufacturer under an express
warranty issued by the manufacturer. The express warranties created by this section do not
require a dealer to repair or replace a covered part if the repair or replacement is covered
by a manufacturer's new car warranty, or the manufacturer otherwise agrees to repair or
replace the part.

(g) The express warranties created by this section do not cover defects or repair problems
which result from collision, abuse, negligence, or lack of adequate maintenance following
sale to the consumer.

(h) The terms of the express warranty, including the duration of the warranty and the
parts covered, must be fully, accurately, and conspicuously disclosed by the dealer on the
front of the Buyers Guide.

new text begin (i) A used motor vehicle dealer that fails to provide the written warranty under this
subdivision violates section 325F.69.
new text end

Sec. 7.

Minnesota Statutes 2022, section 325F.662, subdivision 8a, is amended to read:

Subd. 8a.

Certified motor vehicle.

(a) It is unlawful for a dealer to advertise for sale
or sell a used motor vehicle as "certified" or use any similar descriptive term in the
advertisement or the sale of a used motor vehicle that implies the vehicle has been certified
to meet the terms of a used motor vehicle certification program if any of the following apply:

(1) the dealer knows or should know that the odometer on the vehicle does not indicate
actual mileage, has been rolled back or otherwise altered to show fewer miles, or has been
replaced with an odometer showing fewer miles than actually driven;

(2) the dealer knows or should know that the vehicle was reacquired by the vehicle's
manufacturer or a dealer pursuant to state or federal warranty laws;

(3) the dealer knows or should know that the title to the vehicle has been inscribed with
the notation "damaged," "flood," "junk," "lemon law buyback," "manufacturer repurchase,"
"nonrepairable," "rebuilt," "reconditioned," "salvage," or similar title designation required
by this state or another state;

(4) the dealer knows or should know that the vehicle has sustained damage in an impact,
fire, or flood, that substantially impairs the use or safety of the vehicle;

(5) the dealer knows or should know that the vehicle has sustained frame damage;

(6) prior to sale, the dealer fails to provide the buyer with a completed inspection report
indicating all the components inspected; new text begin or
new text end

(7) the dealer disclaims any warranties of merchantability on the vehicle deleted text begin ; or deleted text end new text begin .
new text end

deleted text begin (8) the vehicle is sold "AS IS."
deleted text end

(b) This section does not abrogate or limit any disclosure obligation imposed by any
other law.

Sec. 8.

Minnesota Statutes 2022, section 325F.662, is amended by adding a subdivision
to read:

new text begin Subd. 8b. new text end

new text begin Right of buyer if tampering discovered. new text end

new text begin A buyer has the right to return a
used motor vehicle for a full refund at any time within the first year after purchase if the
buyer discovers a violation of section 325E.14, subdivision 1.
new text end

Sec. 9.

Minnesota Statutes 2022, section 325F.662, is amended by adding a subdivision
to read:

new text begin Subd. 8c. new text end

new text begin Single-language transactions. new text end

new text begin When engaging in a transaction to sell a used
motor vehicle, the dealer and the consumer must conduct the transaction in a single language.
The dealer and the consumer must agree on the language used before commencing a
discussion or negotiation that may lead to a sale or transaction, and the dealer must
memorialize the agreement. Before executing a contract, the dealer must ensure the consumer
understands the terms of the contract.
new text end

Sec. 10.

Minnesota Statutes 2022, section 325F.662, is amended by adding a subdivision
to read:

new text begin Subd. 8d. new text end

new text begin Price disclosure. new text end

new text begin (a) A dealer must prominently display the price of a used
motor vehicle so that a consumer has access to the price before expressing interest in the
used motor vehicle or engaging in a transaction to purchase the used motor vehicle.
new text end

new text begin (b) For purposes of this subdivision, a dealer prominently displays a used motor vehicle's
price by:
new text end

new text begin (1) displaying the vehicle's price in large print on the vehicle's windshield;
new text end

new text begin (2) clearly indicating the price on the dealer's website; or
new text end

new text begin (3) any other equivalent means that provides a consumer adequate notice of the vehicle's
price without directly engaging the dealer or one of the dealer's employees.
new text end

Sec. 11. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 10 are effective August 1, 2023, and apply to motor vehicle retail installment
contracts executed on or after that date.
new text end