SB 65: Motor Vehicle Law Amendments

I. Executive Summary:

Ohio Senate Bill No. 65 proposes several amendments and enactments to the Ohio Revised Code concerning motor vehicle laws. The bill aims to modify regulations governing ancillary product protection contracts, vehicle value protection agreements, replica and rental motor vehicles, and uninsured drivers. Key changes include clarifying the nature of certain agreements as not being insurance products, establishing regulations for replica vehicle registration, and providing exemptions for rental vehicle operators regarding license plate violations under specific conditions.

II. Main Themes and Important Ideas/Facts:

A. Ancillary Product Protection Contracts and Vehicle Value Protection Agreements:

• Excess Wear and Use Waivers (Lease Agreements): The bill defines “excess wear and use waiver” in the context of motor vehicle leases, clarifying that these are agreements where the lessor may waive charges for excess wear and use or mileage. It explicitly states, “Notwithstanding any provision of the Revised Code to the contrary, an excess wear and use waiver is not an insurance product.” (Section 1310.251(C)). The bill also prohibits conditioning a lease on the purchase of such waivers but allows for discounts or free waivers with other noncredit-related goods or services (Section 1310.251(B)).
• Debt Cancellation or Debt Suspension Products (Retail Installment Contracts): The bill defines “debt cancellation or debt suspension product” as an agreement where a retail seller or assignee waives amounts due on a retail installment contract in case of total loss or unrecovered theft. It includes Guaranteed Asset Protection (GAP) waivers. The bill clarifies that these products “shall not be considered a finance charge or interest” (Section 1317.05(B)) and “shall not be considered insurance” (Section 1317.05(B)). The purchase of these products cannot be a condition for credit or the vehicle sale/lease.
• Motor Vehicle Ancillary Product Protection Contracts: The bill refines the definition of these contracts, which cover services like glass repair, paintless dent removal, interior repair (excluding replacement), tire/wheel repair due to road hazards, key/fob replacement, and benefits under vehicle value protection agreements (Section 3905.426(A)(4)(a)). It explicitly excludes motor vehicle service contracts, warranties, home/consumer goods service contracts, and prepaid routine maintenance (Section 3905.426(A)(4)(c)).
• Vehicle Value Protection Agreements: Defined as agreements providing a future credit or payment towards the purchase or lease of a replacement vehicle in the event of theft or damage (Section 3905.426(A)(7)). These “do not include a debt suspension or debt cancellation product” (Section 3905.426(A)(7)). Contract holders have a thirty-day cancellation right for a full refund if no benefits have been provided (Section 3905.426(E)). All such contracts must be covered by a reimbursement insurance policy (Section 3905.426(B)). A conspicuous statement regarding potential duplication of automobile physical damage insurance coverage is required for certain ancillary product protection contracts (Section 3905.426(D)). The sale of these contracts is deemed a consumer transaction under Ohio’s consumer protection laws (Section 3905.426(J)).

B. Replica Motor Vehicles:

• The bill introduces the term “replica motor vehicle” and defines it in the context of stop light requirements (Section 4513.071(C)) and exemptions from certain motor vehicle equipment laws (Section 4513.38(A)) and emission/noise/fuel usage provisions (Section 4513.41(D)).
• It enacts Section 4505.072 of the Revised Code, likely establishing a process for titling replica motor vehicles, although the specific details of this section are not fully contained within the provided excerpts. However, references to certificates of title issued under this section indicate a formal registration and titling process will be defined.
• Owners applying for “historical license plates” for a replica motor vehicle must execute an affidavit stating the vehicle is owned and operated solely for collector’s purposes and has been inspected for safe operation (Section 4503.183). A replica license plate is for the owner’s use on that specific replica unless transferred to another owned replica following a specific procedure (Section 4503.183).

C. Rental Motor Vehicles:

• A new section, 4503.211, is enacted to address license plate violations for operators of rental vehicles. An operator will not be charged or convicted of a violation of section 4503.21 (display of license plates) if:
• They have a valid written rental agreement in effect at the time of the offense (Section 4503.211(B)(1)).
• They provide the agreement to the enforcing officer at the time of the offense (Section 4503.211(B)(2)).
• They have not removed, concealed, or modified the license plate or validation sticker as placed by the rental dealer (Section 4503.211(B)(3)).
• If the agreement is valid and the plate wasn’t tampered with, but the operator cannot produce the agreement at the time, they can submit a copy to the court before or at their first appearance to avoid conviction (Section 4503.211(C)).
• The definition of “motor vehicle renting dealer” is provided, excluding manufacturers or their affiliates renting to employees or dealers (Section 4503.211(A)(1)).

D. Uninsured Drivers (Assigned Risk Insurance Plan):

• The bill amends section 4509.06 concerning the assigned risk insurance plan.
• It clarifies that the plan can “directly issue and process claims arising from such policies described in division (A) of this section to applicants of automobile insurance policies who are in good faith entitled to but are unable to procure such policies through ordinary methods” (Section 4509.06(B)).
• Proof of financial responsibility from the assigned risk plan meeting specific requirements of section 4509.101 is to be recognized as if issued by an authorized insurance company (Section 4509.06(E)).
• Records of the assigned risk plan are generally not public records and are confidential, with exceptions for the plan of operation and other filed information unless legally prohibited from release (Section 4509.06(G)).
• The plan can establish registration procedures for insurance agents and may require applications to be submitted through registered agents (Section 4509.06(H)).

E. Definitions and Other Amendments:

• The bill amends section 4501.01, the general definition section for motor vehicle laws, to include definitions for “utility vehicle” and “under-speed vehicle” within the broader definition of “motor vehicle” (Section 4501.01(B)). This aligns with the inclusion of these vehicle types in the definition of “motor vehicle” for excess wear and use waivers and ancillary product protection contracts.
• Minor amendments are made to sections 4503.21 (display of license plates) and 4505.08 (memorandum certificate of title) to reflect the new provisions regarding replica and rental vehicles. For example, commercial tractors are explicitly required to display the license plate on the front (Section 4503.21(A)(1)).
• Section 4505.08 is amended to include notations on certificates of title regarding a vehicle’s history, such as being a law enforcement vehicle, taxicab, or having flood damage, based on information from the previous state or Ohio’s automated title processing system, including “REBUILT SALVAGE” notations (Section 4505.08(G)).

III. Potential Implications:

• Consumers: The bill aims to provide more clarity and protection for consumers entering into ancillary product agreements and leasing vehicles. The cancellation right for vehicle value protection agreements is a direct consumer benefit. The provisions regarding rental vehicle license plate violations could prevent unwarranted charges or convictions for renters.
• Businesses: Motor vehicle dealers and lessors will need to adapt their contract language and practices to comply with the new definitions and regulations for ancillary products and lease waivers. Rental car companies will benefit from the exemption provided to their customers under specific conditions. Insurance companies will continue to participate in the assigned risk plan with updated procedures.
• State Agencies: The Bureau of Motor Vehicles will need to implement new procedures for titling replica vehicles and updating the automated title processing system with historical vehicle information. The Superintendent of Insurance will continue to oversee the assigned risk insurance plan.
• Law Enforcement: Law enforcement officers will need to be aware of the new provisions regarding license plate display for rental vehicles and the conditions under which operators are exempt from violations.

IV. Conclusion:

Senate Bill No. 65 represents a comprehensive update to Ohio’s motor vehicle laws, addressing various aspects from consumer protection in product agreements to the regulation of specific vehicle types like replicas and rental cars. The bill seeks to provide clarity, establish specific guidelines, and offer certain exemptions under defined circumstances. Further review of the enacted sections, particularly 4505.072, would provide a more complete understanding of the proposed changes.