Bill Description: House Bill 642 would impose new regulations on vehicle manufacturers and distributors.

Rating: -3

NOTE: House Bill 642 is similar to House Bill 546, introduced earlier this session. 

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

House Bill 642 would create Section 49-1601A, Idaho Code, and amend sections 49-1613 and 49-1632, Idaho Code, to impose new regulations on vehicle manufacturers and distributors, which would limit voluntary contractual agreements among vehicle manufacturers, distributors, and dealers.

Among these new regulations is a prohibition against a vehicle manufacturer competing "with their franchised dealer in the sale, lease, or warranty service of new motor vehicles." Preventing consumers from making purchases directly from a vehicle manufacturer is blatant protectionism. 

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The bill also contains a new regulation prohibiting vehicle manufacturers from offering consumers "a subscription service for any motor vehicle feature that utilizes components and hardware already installed on the motor vehicle at the time of purchase or lease. …" Such features include "any convenience or safety function included on the motor vehicle, such as heated seats or driver assistance. …" 

While the market has generally responded poorly to the idea of making heated seats a subscription service, prohibiting such a model is clearly government overreach. 

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Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?

The bill says, "It shall be unlawful for any manufacturer or distributor, whether by agreement, program, incentive provision, or provision for loss of incentive payments or other benefits, to amend or attempt to amend its franchise agreement or similar agreement governing the sales and leasing of new motor vehicles or to establish or implement a franchise agreement for the sales and leasing of new motor vehicles under which the manufacturer or distributor reserves" certain listed rights.

Among the things prohibited in a contract by this section are maintaining a website to sell or lease vehicles directly to the consumer and retaining ownership of new motor vehicles until they are sold or leased to the retail buyer or lessee."

Government should not limit, meddle in, or overrule the terms of private contracts. This applies both to contracts between or among business entities such as vehicle manufacturers, distributors, and dealers, as well as contracts between those entities and consumers. So long as the terms of a contract are clear and all parties freely agree to it, government tramples on fundamental rights when it invalidates or modifies that contract.

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