House File 2308 - Introduced HOUSE FILE 2308 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 593) A BILL FOR An Act relating to final-stage motor vehicle manufacturers. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 5789HV (3) 87 ns/rh

H.F. 2308 Section 1. Section 321.1, subsection 37, Code 2018, is 1 amended to read as follows: 2 37. “Manufacturer” means every person engaged in the 3 business of fabricating or assembling vehicles of a type 4 required to be registered. “Manufacturer” does not include 5 a person who converts, modifies, or alters a completed 6 motor vehicle manufactured by another person or a person who 7 assembles a glider kit vehicle. “Manufacturer” includes a 8 person who uses a completed motor vehicle manufactured by 9 another person to construct a class “B” motor home as defined 10 in section 321.124 . “Manufacturer” also includes a final-stage 11 manufacturer as defined in section 322.2. 12 Sec. 2. Section 322.2, Code 2018, is amended by adding the 13 following new subsections: 14 NEW SUBSECTION . 10A. “Final-stage manufacturer” means 15 a person who performs such manufacturing operations on an 16 incomplete motor vehicle that it becomes a completed motor 17 vehicle. 18 NEW SUBSECTION . 11A. “Incomplete motor vehicle” means 19 an assemblage consisting, at a minimum, of frame and chassis 20 structure, power train, steering system, suspension system, 21 and braking system to the extent that those systems are to 22 be part of a completed motor vehicle, that requires further 23 manufacturing operations, other than the addition of readily 24 attachable components, such as mirrors or tire and rim 25 assemblies, or minor finishing operations such as painting, to 26 become a completed motor vehicle. 27 NEW SUBSECTION . 11B. “Incomplete motor vehicle manufacturer” 28 means a person who manufactures an incomplete motor vehicle 29 by assembling components none of which, taken separately, 30 constitute a completed motor vehicle. 31 NEW SUBSECTION . 14A. “Multi-stage manufactured vehicle” 32 means a motor vehicle built in two or more stages in which 33 an incomplete motor vehicle, built by one manufacturer, is 34 completed by another manufacturer who adds cargo carrying 35 -1- LSB 5789HV (3) 87 ns/rh 1/ 5

H.F. 2308 components or other components to the vehicle. 1 Sec. 3. Section 322.2, subsection 12, Code 2018, is amended 2 to read as follows: 3 12. “Manufacturer” means any person engaged in the business 4 of fabricating or assembling motor vehicles. “Manufacturer” 5 does not include a person who converts, modifies, or alters a 6 completed motor vehicle manufactured by another person or a 7 person who assembles a glider kit vehicle as defined in section 8 321.1 . “Manufacturer” includes a person who uses a completed 9 motor vehicle manufactured by another person to construct 10 a class “B” motor home as defined in section 321.124 or a 11 motorsports recreational vehicle as defined in section 321.1 . 12 “Manufacturer” also includes a final-stage manufacturer. 13 Sec. 4. Section 322.3, subsection 1, Code 2018, is amended 14 to read as follows: 15 1. A person shall not engage in this state in the business 16 of selling at retail new motor vehicles of any make or 17 represent or advertise that the person is engaged or intends 18 to engage in such business in this state unless the person 19 is authorized to do so by a contract in writing with the 20 manufacturer or distributor of such make of new motor vehicles 21 and unless the department has licensed the person as a motor 22 vehicle dealer in this state in motor vehicles of such make 23 and has issued to the person a license in writing as provided 24 in this chapter . This subsection shall not be construed to 25 prohibit a final-stage manufacturer of multi-stage manufactured 26 vehicles that holds a used motor vehicle dealer license 27 issued pursuant to this chapter from assigning a multi-stage 28 manufactured vehicle’s manufacturer’s statement of origin to a 29 retail buyer for purposes of issuance of a certificate of title 30 by a county treasurer as a new motor vehicle with the same make 31 as the multi-stage manufactured vehicle without holding a new 32 motor vehicle dealer license and without paying any associated 33 motor vehicle registration fees. 34 Sec. 5. Section 322.3, subsection 14, Code 2018, is amended 35 -2- LSB 5789HV (3) 87 ns/rh 2/ 5

H.F. 2308 by adding the following new paragraph: 1 NEW PARAGRAPH . f. A final-stage manufacturer of multi-stage 2 manufactured vehicles from being licensed as a used motor 3 vehicle dealer or from assigning a multi-stage manufactured 4 vehicle’s manufacturer’s statement of origin to a retail 5 buyer for purposes of issuance of a certificate of title by 6 a county treasurer as a new motor vehicle with the same make 7 as the multi-stage manufactured vehicle without holding a new 8 motor vehicle dealer license and without paying any associated 9 motor vehicle registration fees. This paragraph shall not 10 be construed to authorize a manufacturer or incomplete motor 11 vehicle manufacturer to directly sell at retail incomplete or 12 completed motor vehicles to a retail buyer except as provided 13 in this subsection. 14 EXPLANATION 15 The inclusion of this explanation does not constitute agreement with 16 the explanation’s substance by the members of the general assembly. 17 This bill provides that “manufacturer” under Code sections 18 321.1 and 322.2 includes a final-stage manufacturer. The 19 bill defines “final-stage manufacturer” to mean a person who 20 performs such manufacturing operations on an incomplete motor 21 vehicle that it becomes a completed motor vehicle. “Incomplete 22 motor vehicle” means an assemblage consisting, at a minimum, 23 of frame and chassis structure, power train, steering system, 24 suspension system, and braking system to the extent that those 25 systems are to be part of a completed motor vehicle, that 26 requires further manufacturing operations, other than the 27 addition of readily attachable components, such as mirrors or 28 tire and rim assemblies, or minor finishing operations such as 29 painting, to become a completed motor vehicle. 30 Under current law, Code section 322.3(1) prohibits a person 31 from engaging in the business of selling at retail new motor 32 vehicles of any make, or from representing or advertising that 33 the person is engaged or intends to engage in such business, 34 unless the person is authorized to do so by a contract in 35 -3- LSB 5789HV (3) 87 ns/rh 3/ 5

H.F. 2308 writing with the manufacturer or distributor of such make of 1 new motor vehicles and unless the department of transportation 2 has licensed the person as a motor vehicle dealer in motor 3 vehicles of such make and has issued to the person a license 4 in writing as provided in Code chapter 322. The bill provides 5 that this prohibition shall not be construed to prohibit a 6 final-stage manufacturer of multi-stage manufactured vehicles 7 that holds a used motor vehicle dealer license from assigning 8 a multi-stage manufactured vehicle’s manufacturer’s statement 9 of origin to a retail buyer for purposes of issuance of a 10 certificate of title by a county treasurer as a new motor 11 vehicle with the same make as the multi-stage manufactured 12 vehicle without holding a new motor vehicle dealer license 13 and without paying any associated motor vehicle registration 14 fees. The bill provides that a “multi-stage manufactured 15 vehicle” means a motor vehicle built in two or more stages in 16 which an incomplete motor vehicle, built by one manufacturer, 17 is completed by another manufacturer who adds cargo carrying 18 components or other components to the vehicle. 19 Under current law, Code section 322.3(14) prohibits a motor 20 vehicle manufacturer or importer from directly or indirectly 21 being licensed as, owning an interest in, operating, or 22 controlling a motor vehicle dealer, with certain exceptions. 23 The bill adds to the list of exceptions a provision allowing a 24 final-stage manufacturer of multi-stage manufactured vehicles 25 to be licensed as a used motor vehicle dealer and to assign a 26 multi-stage manufactured vehicle’s manufacturer’s statement 27 of origin to a retail buyer for purposes of issuance of a 28 certificate of title by a county treasurer as a new motor 29 vehicle with the same make as the multi-stage manufactured 30 vehicle without holding a new motor vehicle dealer license and 31 without paying any associated motor vehicle registration fees. 32 The bill provides that the exception shall not be construed 33 to authorize a manufacturer or incomplete motor vehicle 34 manufacturer to directly sell at retail incomplete or completed 35 -4- LSB 5789HV (3) 87 ns/rh 4/ 5

H.F. 2308 motor vehicles to a retail buyer except as provided in Code 1 section 322.3(14). The bill provides that an “incomplete 2 motor vehicle manufacturer” means a person who manufactures 3 an incomplete motor vehicle by assembling components none of 4 which, taken separately, constitute a completed motor vehicle. 5 -5- LSB 5789HV (3) 87 ns/rh 5/ 5