REPORT TITLE:
Motor Vehicles


DESCRIPTION:
Requires motor vehicle dealers to include license information in
their advertisements.  Requires publishers to refuse
advertisements for dealers who do not provide proof of licensure.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           361
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO MOTOR VEHICLE DEALER ADVERTISEMENTS.



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

 1      SECTION 1.  Section 437-4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§437-4 Advertising.(a)  Motor vehicle, availability of.
 
 4 No new or used motor vehicle dealer shall advertise or offer for
 
 5 sale or exchange in any newspaper, or through any other medium,
 
 6 any motor vehicle not actually for sale at the premises of the
 
 7 dealer or available to the dealer from the manufacturer, or
 
 8 authorized new car distributor of such automobile at the time the
 
 9 advertisement or offer is made.
 
10      (b)  False, deceptive, or misleading advertising.
 
11      (1)  Terms that are false, deceptive, or misleading
 
12           regarding pricing shall not be used in any retail motor
 
13           vehicle advertising, including but not limited to the
 
14           following terms:
 
15           (A)  "Wholesale;"
 
16           (B)  "Free;"
 
17           (C)  "Invoice price," "manufacturer's invoice price,"
 
18                "factory invoice price," "dealer invoice price," a
 
19                certain number of dollars "over invoice," or other
 

 
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 1                terms of equivalent import;
 
 2           (D)  "Fleet," in connection with defining prices or a
 
 3                sale;
 
 4           (E)  "Factory sale," "manufacturer's sale," "factory
 
 5                authorized sale," "factory outlet," or other terms
 
 6                of equivalent import; and
 
 7           (F)  "No credit rejected," "everyone financed," or
 
 8                terms of equivalent import.
 
 9      (2)  Any advertised product must be available on the stated
 
10           terms from inventory, or by order with delivery within
 
11           a reasonable period of time.
 
12      (3)  Where a discount or savings is featured, whether by
 
13           price comparison of dollars, fractions, percentages, or
 
14           otherwise, the discount or savings must be calculated
 
15           with reference to the manufacturer's suggested retail
 
16           price in accordance with the Monroney Act, 15 U.S.C.
 
17           §1231, et seq., as amended.
 
18      (4)  If the term "guarantee" or words of equivalent import
 
19           are used in advertising, the guarantee, and all of its
 
20           material terms, must be in writing and made part of the
 
21           contract of sale of any motor vehicle sold by the
 
22           seller during the period covered by the advertisement.
 

 
 
 
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                                     S.B. NO.           361
                                                        
                                                        

 
 1      (5)  No motor vehicle shall be advertised or offered for
 
 2           sale or exchange or offered to be purchased under the
 
 3           representation that it is a new motor vehicle, unless
 
 4           the motor vehicle conforms to the definition of "new
 
 5           motor vehicle" contained in section 437-1.1.
 
 6      (c)  Procedure relative to advertising of a specific motor
 
 7 vehicle.
 
 8      (1)  No new or used motor vehicle dealer shall advertise the
 
 9           sale of a specific motor vehicle without setting forth:
 
10           (A)  The year;
 
11           (B)  The make of the motor vehicle; and
 
12           (C)  In the case of a used car, the license plate
 
13                number of the motor vehicle.
 
14      (2)  If a motor vehicle has been advertised as set forth
 
15           above and has been sold, the motor vehicle dealer shall
 
16           have in the dealer's office a copy of the retail sale
 
17           contract or a copy of a bill of sale for the motor
 
18           vehicle which shows the buyer's signature thereon.
 
19      (3)  No new or used motor vehicle dealer shall in any
 
20           advertisement designate the price of a motor vehicle
 
21           without stating the make, the body type, and the
 
22           manufacturer's classification or series of the motor
 

 
 
 
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                                     S.B. NO.           361
                                                        
                                                        

 
 1           vehicle, except that the classification or series need
 
 2           not be designated for used cars, and whether or not
 
 3           other charges in addition to the quoted price will be
 
 4           assessed; provided that the gross income tax and
 
 5           transfer of title fees may be excluded from such other
 
 6           charges.
 
 7      (d)  Display of motor vehicle at unlicensed premises.  All
 
 8 dealers or salespersons shall obtain prior approval of the board,
 
 9 through its executive officer, to display motor vehicles for
 
10 advertising purposes at or on any place other than the licensed
 
11 premises.
 
12      (e)  Advertising by salesperson prohibited.  No salesperson
 
13 shall advertise the sale of a motor vehicle in or through any
 
14 advertising medium without designating the name of the
 
15 salesperson's employer; provided that this provision shall not
 
16 apply when a salesperson advertises to dispose of a motor vehicle
 
17 registered under the salesperson's name. 
 
18      (f)  Advertising by unlicensed dealers prohibited.  A dealer
 
19 may advertise in print or broadcast medium only if the dealer
 
20 includes in the advertisement or listing the dealer's applicable
 
21 and current license number, and provides proof of the number's
 
22 validity to the publisher or producer of the advertising medium.
 

 
 
 
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                                     S.B. NO.           361
                                                        
                                                        

 
 1 The publisher or producer of a print or broadcast advertising
 
 2 medium shall refuse to publish or broadcast an advertisement or
 
 3 listing for a dealer who does not comply with this subsection.  A
 
 4 publisher or producer who obtains a signed statement from the
 
 5 dealer which states that the dealer has read the text of the
 
 6 advertisement or listing, has an applicable and current dealer's
 
 7 license for motor vehicle advertised, has included all applicable
 
 8 and current license numbers in the advertisement or listing, and
 
 9 is aware of civil and criminal penalties for advertising as a
 
10 dealer without a valid license, shall be entitled to a rebuttable
 
11 presumption of compliance with this subsection.
 
12      Upon entry of either a final order of the motor vehicle
 
13 industry licensing board pursuant to chapter 91 or a judgment by
 
14 a court of competent jurisdiction finding that a dealer has
 
15 advertised in violation of this paragraph, the public utility
 
16 furnishing telephone service to the dealer shall disconnect the
 
17 telephone number contained in the advertisement or listing. 
 
18      The publisher or producer of a print or broadcast
 
19 advertising medium shall not be liable in any suit, action, or
 
20 claim arising from its refusal to list or accept advertisements
 
21 pursuant to this subsection.  Good faith compliance by a public
 
22 utility with respect to this subsection is a complete defense to
 

 
 
 
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                                     S.B. NO.           361
                                                        
                                                        

 
 1 any civil or criminal action brought against it arising from the
 
 2 termination of telephone service."
 
 3      SECTION 2.  New statutory material is underscored.
 
 4      SECTION 3.  This Act shall take effect upon its approval.
 
 5 
 
 6                           INTRODUCED BY:  _______________________