The 60-day regular legislative session began with an extraordinary session to help secure the largest investment in the state’s history. The specific intent of the package of bills addressed during the special session helped clinch the announced $2.7 billion Nucor investment in Mason County and the Northern Panhandle. The project is expected to bring about 1,000 construction jobs and 800 full-time jobs with benefits.

The West Virginia Legislature adjourned Saturday, March 12, at midnight, having completed 293 bills, including all three WVADA priority bills, a budget bill, and an economic package to recruit new businesses and create hundreds of jobs.

WVADA Priority Bills

H.B. 4560 – Relating generally to motor vehicle dealers, distributors, wholesalers, and manufacturers, was our number one priority bill this session, and passed both chambers overwhelmingly. The bill was signed by the Governor and takes effect on June 10, 2022.

This bill updates West Virginia’s current franchise law by doing the following:

• Clarifies that this article of the West Virginia Code governs all agreements addressed in the article to modernize and acknowledge that dealers now sign numerous agreements, rather than just a single Sales and Service Agreement.
• Further clarifies what it means to engage in the operation and business of a new motor vehicle dealership.
• Clarifies that a dealership is entitled to be reimbursed by a manufacturer for diagnostic time on warranty and recall work, considering the complexity of the modern motor vehicle, including any assistance with over-the-air updates.
• Allows a new motor vehicle dealer to submit a single set of repair orders for the purpose of calculating both the labor and parts mark-up, or a dealer may submit separate sets of repair orders for a labor rate and parts mark-up calculation.
• Given the increase in manufacturer sales and service audits, it sets forth a procedure clarifying the procedure to be used by the manufacturer and motor vehicle dealer.
• Provides additional protections for motor vehicle dealers for too frequent unreasonable image and facility mandates from manufacturers. Increases a dealer’s rights to such mandates from 10 to 15 years.
• Prohibits a manufacturer from using motor vehicles in transit to count against a dealer’s sales effective or efficiency formula. The vehicle must be in the dealer’s physical possession.
• Prohibits a manufacturer from threatening or taking any prejudicial action against a new motor vehicle dealer arising from the retail price at which a dealer sells a new motor vehicle.
• Clarifies the duties and responsibilities of the Manufacturer and motor vehicle dealer for vehicles sold according to a reservation or subscription service and clarifies that the financing of motor vehicles occurs at the dealership.
• Allows a Motor Vehicle Dealer to implement a succession plan while the dealer is still living, sets forth a procedure for any disagreements that may arise between the manufacturer and motor vehicle dealer, and allows any designated family member of the dealer to be a designated executive manager of the dealership under the existing dealer agreement.
• Increases the protection of a consumer’s data to a motor vehicle dealer when purchasing a motor vehicle. Also clarifies different duties for a manufacturer and other third parties, such as dealer management system providers. Provides a definition of what is “dealer data” and the following:

1. 1. Limits a manufacturer’s ability to share a dealer’s consumer data to a third-party to the consumer data on its same line vehicles sold by the dealer as opposed to access to all consumer data of a motor vehicle dealer.
   2. Requires a dealer management system provider to meet Standards for Technology in Automotive Retail Standards (“STAR”) for the protection of consumer data.
   3. Prevents a data systems provider from limiting how a dealer shares its consumer data with other required vendors and third parties or charging an unreasonable fee to a dealer or third party for a dealer sharing its consumer data.
   4. Requires a data systems provider to cooperate in transferring back the motor vehicle dealer’s consumer data and use a commercially reasonable format to allow reasonable transmission back to a dealer upon the termination of the agreement. Also prohibits the charging of unreasonable fees for returning this data in a commercially usable format.
   5. Requires a data systems provider to inform a motor vehicle dealer of any third party the dealer management system provider that it is sharing a motor vehicle dealer’s customer’s data and requires a dealer management system to obtain permission from the dealer to share a dealer’s customer data.
   6. Clarifies that the data a customer provides to a motor vehicle dealer is the dealer’s data and allows the dealer to protect that information more securely.
   7. Allows a dealer to obtain information from a data systems provider or other third parties that protects the dealer’s consumer data it provided to them.
   8. Gives dealers more control over their customer data by limiting what a third party can access.
   9. Provides a severability clause and continues to provide the motor vehicle dealer indemnity from any manufacturer or third party who engages in willful or negligent actions or allows an impermissible permissible use of protected consumer data.

H.B. 4567 — Relating to business and occupation tax, eliminates B&O tax on new cars. This bill passed both chambers with bipartisan support. This bill was amended in the Senate Finance Committee to phase in reducing the tax. Effective July 1, 2023, the B&O tax on new cars will be reduced by 50%. Then effective July 1, 2024, the remaining B&O tax on new cars will be reduced by an additional 50% of the total amount of the tax. Then, effective July 1, 2025, the B&O tax on new cars will be completely eliminated.

The phased-out approach was a compromise with Senators Eric Nelson and Tom Takubo, who would only support the bill with a phased-out approach.

We all know that this tax is extremely regressive and unfair, but we have made a dent. This is a huge win for WVADA! We are the first industry in over 70 years to tackle the B&O tax and receive some relief!

S.B. 568 — Requiring insurance plans to provide underwriting information to insureds: this bill passed both chambers unanimously. This bill will allow employers to request their loss runs from an insurer on an annual basis regardless of the number of employees insured.

Other Bills of Interest:

S.B. 250 — The budget bill was a compromise between the Senate and House, and the Executive branch. House Finance Committee Chairman Eric Householder, R-Berkeley, explained the compromise budget surplus totals $1 billion, and a General Revenue fund with 44% designated for public education and included another pay raise for teachers; 26% dedicated to social services including a pay raise for Child Protective Services workers; and 10% allocated for higher education.

S.B. 4 — Repealing the ban on construction of nuclear power plants: passed and has already been signed by the Governor. The bill repeals a 26-year ban the legislature had enacted on the construction of new nuclear power facilities and allowed for the possibility of nuclear energy production rounding out West Virginia’s power portfolio and indicating to the global economy that the state is successfully transitioning its economy.

Last summer, a small delegation of dealers traveled to D.C. to meet with Senator Manchin to discuss several concerning issues facing the auto industry and our nation. During this meeting, Senator Manchin requested that dealers and other industry leaders in West Virginia work with the legislature to repeal the ban on nuclear power plants. I am proud to report that S.B. 4 did just that.

Bills that continue to make advances in broadband connectivity and competition completed the legislative process, as well as bills that look to pave the way for the state to capitalize on new economic investments, such as House Bill 4098, which makes it clear in state code that geothermal energy may be developed in West Virginia; House Bill 4003, which would establish a clear legal right of title to the chemical compounds, elements and substances derived from the treatment of acid mine drainage, setting definitive roles in the cleanup and extraction of rare earth elements from those coal waste piles; and House Bill 4002 which creates the certified sites and development readiness program, to help secure the state’s position among site selection consultants to help land the next big economic engine.

WVADA had an extremely successful legislative session. This is due to all the dealers throughout the state who came together, participated in meetings, made phone calls, and reached out to their local representatives. It is amazing what can be accomplished when we work together as a team with one collective voice. THANK YOU to everyone who participated!

I hope to see each of you soon at our upcoming Dealer Family Convention at Nemacolin, June 12-15. Please do not hesitate to contact me if I can be of any assistance.