Gov. Inslee vetoes bill that set new rules for wholesale car dealers

  • By Jerry Cornfield Herald Writer
  • Sunday, March 13, 2016 7:32pm
  • Local News

OLYMPIA — Political tension in Olympia is enabling an Everett business to continue serving holders of a specialty car dealer license.

Lawmakers sent a bill to Gov. Inslee to impose new rules on wholesale auto dealer licenses that threatened to force Dealer License Experts to shutter its Evergreen Way offices.

But Senate Bill 6606 was one of 27 bills that Inslee vetoed Thursday night in response to the failure of the House and Senate to reach agreement on a budget deal.

The action provides a reprieve to the company whose 112 clients all live out of state.

“We’re pleased we get a little stay of execution and hope the governor and legislators give us something more permanent,” said Joshua Malher, attorney for the Chicago-based company. “Our hope is they see the contribution our businesses do make in Washington is positive.”

There is some uncertainty about the future because the veto can be overridden with a two-thirds vote of lawmakers in each chamber during the current special session.

Another option is lawmakers could revive the House bill originally introduced as a companion to the Senate bill. That legislation, House Bill 2898, would need to be voted on in both chambers.

The state Department of Licensing requested the legislation but is not pressing lawmakers in any direction, said Tony Sermonti, the agency’s policy and legislative director.

“This is a significant issue and it remains so,” he said. “We’ll continue to focus on the problem and look forward to whatever path provides a remedy.”

Washington is one of about a dozen states offering such a license which gets holders entry into dealer-only auctions to buy vehicles to sell to retailers around the country.

In Everett, the 112 license holders landed here with the help of Dealers License Experts of Chicago. For a fee, the company will provide the means necessary to obtain a license and comply with Washington law, which among other things mandates license holders each have their own desk, chair, operating phone and business address.

The vetoed Senate bill aimed to eliminate the business model of warehousing dealer licensees in single locations. It said there could be no more than three licensed wholesale dealers sharing office space in the same building and required licensees to do most of their transactions with other Washington-based businesses.

State licensing officials are concerned this companies set up shop to take advantage of the less restrictive Washington law. And, as the number has soared in recent years from 50 to several hundred statewide, the department has received complaints from consumers and law enforcement about alleged unscrupulous activities involving those with Washington-issued licenses.

“We have always tried to be above board,” Malhar said, adding the company has passed every government inspection since opening in Everett roughly two years ago.

He said there is a better approach than the bills drafted so far “if they’re willing to work with us.”

If nothing changes, the next legislative battle could come in 2017. Sermonti declined to say if the department will pursue it then.

“We’re interested in solving this problem,” he said. “The issue is not going away.”

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

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