1.1 	A bill for an act
1.2 	relating to commerce; enacting a car buyers' bill of rights; requiring disclosures; 
1.3 	regulating the sale of used motor vehicles; requiring a cancellation option on 
1.4 	purchase of a used motor vehicle; amending Minnesota Statutes 2006, sections 
1.5 	53C.01, by adding a subdivision; 53C.08, subdivision 2; 325F.662, subdivision 
1.6 	10, by adding subdivisions; proposing coding for new law in Minnesota Statutes, 
1.7 	chapter 53C.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2006, section 53C.01, is amended by adding a 
1.10 	subdivision to read:
1.11 		Subd. 6a.Regulation Z. "Regulation Z" means a rule, regulation, or interpretation 
1.12 	promulgated by the Board of Governors of the Federal Reserve System under the federal 
1.13 	Truth in Lending Act, as amended (United States Code, title 15, section 1601, et seq.), 
1.14 	and an interpretation or approval issued by an official or employee of the Federal Reserve 
1.15 	System duly authorized by the board under the Truth in Lending Act, as amended, to issue 
1.16 	the interpretations or approvals.

1.17 	Sec. 2. Minnesota Statutes 2006, section 53C.08, subdivision 2, is amended to read:
1.18 		Subd. 2.Contents. The retail installment contract shall contain the following items:
1.19 	(1) the cash sale price of the motor vehicle which is the subject matter of the retail 
1.20 	installment contract, which may not include any amount for items listed in clause (4) or 
1.21 	otherwise required to be listed separately;
1.22 	(2) the total amount of the retail buyer's down payment, whether made in money or 
1.23 	goods, or partly in money or partly in goods;
1.24 	(3) the difference between clauses (1) and (2);
2.1 	(4) the amount, if any, included in the transaction ~~but not included in clause (1)~~ to 
2.2 	pay the balance of an existing purchase money motor vehicle lien which exceeds the value 
2.3 	of the trade-in amount, to discharge an interest in an existing motor vehicle lease, for any 
2.4 	insurance, specifying the types of coverage, taxes, fees, and charges that actually are or 
2.5 	will be paid to public officials or government agencies, including those for perfecting, 
2.6 	releasing, or satisfying a security interest, and any other amount to be financed that is 
2.7 	related to the transaction;
2.8 	(5) principal balance, which is the sum of clauses (3) and (4);
2.9 	(6) the amount of the finance charge;
2.10 	(7) the total of payments payable by the retail buyer to the retail seller and the 
2.11 	number of installment payments required and the amount of each installment expressed 
2.12 	in dollars or percentages, and date of each payment necessary finally to pay the total of 
2.13 	payments, which is the sum of clauses (5) and (6); and
2.14 	(8) the amount of consideration the retail seller will receive from any assignee 
2.15 	or buyer of the retail installment contract, expressed in total and as a percentage of the 
2.16 	finance charge under the contract, together with the amount of the monthly payment 
2.17 	attributable to the consideration received by the retail seller for the assignment.
2.18 	Provided, however, that said clauses (1) to ~~(7)~~ (8) inclusive need not be stated in the 
2.19 	terms, sequence, or order set forth above. Provided further, that clauses (6) and (7) may 
2.20 	be disclosed on the assumption that all scheduled payments under the contract will 
2.21 	be made when due.
2.22 	~~In lieu of the above clauses, the retail seller may give the retail buyer disclosures which~~ 
2.23 	~~satisfy the requirements of the federal Truth-In-Lending Act in effect as of the time of the~~ 
2.24 	~~contract, notwithstanding whether or not that act applies to the transaction.~~

2.25 	Sec. 3. [53C.083] CREDIT SCORES.
2.26 	(a) A retail seller that obtains a credit reporting product known as a "credit score" 
2.27 	from a consumer reporting agency, as defined in section 13C.001, subdivision 4, for 
2.28 	use in connection with an application for credit initiated by a buyer for the purchase or 
2.29 	lease of a motor vehicle shall provide, prior to the sale or lease of the motor vehicle, the 
2.30 	following information to the buyer in at least ten-point boldface type on a document 
2.31 	separate from the sale or lease contract:
2.32 	(1) the credit score obtained and used by the retail seller and the name of the credit 
2.33 	reporting agency providing the credit score to the retail seller;
2.34 	(2) the range of possible credit scores established by the credit reporting agency 
2.35 	that provided the credit score; and
3.1 	(3) the following notice, which must include the name, address, and telephone 
3.2 	number of each credit reporting agency providing a credit score that was obtained and 
3.3 	used by the retail seller:
3.4 	"NOTICE TO MOTOR VEHICLE CREDIT APPLICANT
3.5 	If the dealer obtains and uses a credit score from a consumer reporting agency in 
3.6 	connection with your application to finance the acquisition of a motor vehicle, the dealer 
3.7 	must disclose the score to you.
3.8 	The credit score is a computer-generated summary calculated by a consumer 
3.9 	reporting agency at the time the dealer requests the score and is based on information the 
3.10 	consumer reporting agency has on file. The score is based on data about your credit history 
3.11 	and payment patterns. Credit scores are important because they are used in determining 
3.12 	whether to extend credit. The score may also be used to determine the annual percentage 
3.13 	rate you may be offered. Credit scores can change over time, depending on your conduct, 
3.14 	how your credit history and payment patterns change, and how credit scoring technologies 
3.15 	change. Credit scores may also vary from one credit reporting agency to another.
3.16 	If you have questions about your credit score, contact the consumer reporting agency 
3.17 	at the address and telephone number provided. The consumer reporting agency does not 
3.18 	participate in the decision to take any action on your application for credit and is unable to 
3.19 	provide you with specific reasons for any decision on the credit application.
3.20 	If you have questions concerning credit terms relative to your purchase or lease of 
3.21 	a motor vehicle, ask the dealer."
3.22 	(b) This section does not require a dealer to provide more than one disclosure for 
3.23 	each purchase or lease transaction.

3.24 	Sec. 4. [53C.087] OFFERING AND ACCEPTING POSSESSION OF TRADE-IN 
3.25 	VEHICLE.
3.26 		Subdivision 1.Written offer required; oral offer prohibited. (a) A retail seller or 
3.27 	seller's agent may not respond to an inquiry by a retail buyer concerning a trade-in of a 
3.28 	vehicle or vehicles owned by a retail buyer in connection with the purchase of another 
3.29 	vehicle other than by providing a written offer of the consideration that will be given for 
3.30 	the vehicle or vehicles to be traded in. Consideration may include, but is not limited to, 
3.31 	cash given to the retail buyer or a credit to be applied toward a down payment on the 
3.32 	purchase price of the vehicle to be purchased.
3.33 	(b) The written offer must contain a space for the buyer to acknowledge receipt of 
3.34 	the offer and to indicate acceptance or rejection of the offer.
4.1 	(c) The offer required by this subdivision must be presented to the retail buyer before 
4.2 	any retail installment contract is prepared or presented to the buyer.
4.3 	(d) No retail seller or seller's agent may communicate to a retail buyer an estimate of 
4.4 	the value of a vehicle to be traded in or make an oral offer.
4.5 		Subd. 2.Written offer final. After a written offer has been provided to and 
4.6 	accepted by the retail buyer, the retail seller may not change the amount offered.
4.7 		Subd. 3.Preconditions to execution of contract. A retail seller may not take 
4.8 	possession of a trade-in vehicle or execute a retail installment contract that includes 
4.9 	consideration given for a trade-in vehicle unless an offer and acceptance of consideration 
4.10 	for the trade-in vehicle or vehicles has been made.
4.11 		Subd. 4.Preconditions to disposal or sale of trade-in vehicle. After taking 
4.12 	possession of a trade-in vehicle, a retail seller must retain possession and ownership 
4.13 	of the trade-in vehicle until any conditions placed upon the completion of the sale or 
4.14 	delivery of the newly purchased vehicle have been satisfied. Conditions include, but 
4.15 	are not limited to, a conditional delivery agreement allowing the retail seller to demand 
4.16 	return of a newly purchased vehicle if the retail seller is unable to assign the buyer's 
4.17 	retail installment contract.
4.18 		Subd. 5.Enforcement. Any violation of this section is a deceptive practice under 
4.19 	section 325F.69 and any person injured by the violation may obtain relief under section 
4.20 	8.31, subdivision 3a. An action taken pursuant to this subdivision under section 8.31, 
4.21 	subdivision 3a, is in the public interest.

4.22 	Sec. 5. Minnesota Statutes 2006, section 325F.662, is amended by adding a subdivision 
4.23 	to read:
4.24 		Subd. 2a.Disclosure of damage or defects. Prior to consummation of the sale of 
4.25 	a used motor vehicle by a dealer to a consumer, the dealer must clearly and specifically 
4.26 	disclose all material existing mechanical, electrical, and electronic defects and damage 
4.27 	that may be found using reasonable care. Defects and damage that must be disclosed 
4.28 	include, but are not limited to, damage caused by flood or other water source, and 
4.29 	evidence of repair of strut tower, trunk floor plan, frame, or structural portion of unibody, 
4.30 	including corrective welds.
4.31 	For the purpose of this subdivision, "reasonable care" means a standard that requires an 
4.32 	interior and exterior inspection, an under-hood and under-vehicle inspection, and a test 
4.33 	drive. Reasonable care does not require taking the vehicle apart or running tests unless it 
4.34 	is necessary to diagnose apparent symptoms.

5.1 	Sec. 6. Minnesota Statutes 2006, section 325F.662, is amended by adding a subdivision 
5.2 	to read:
5.3 		Subd. 2b.Disclosure of material history, prior use, and title brands. (a) Prior to 
5.4 	consummation of the sale of a used motor vehicle by a dealer to a consumer, the dealer 
5.5 	must clearly and specifically disclose, using reasonable care, all:
5.6 	(1) material history;
5.7 	(2) prior use; and
5.8 	(3) title brands. Title brands include, but are not limited to, rebuilt salvage, flood 
5.9 	or water damaged, transferred to insurer upon payment of claim, manufacturer buyback, 
5.10 	personal use, business use, lease use, rental use, demonstrator, executive, taxicab or public 
5.11 	transportation, police vehicle, driver education or government vehicle, or history and use 
5.12 	unknown. Disclosure must include any other jurisdiction in which the vehicle has been 
5.13 	previously titled. If the vehicle has not been previously titled in another jurisdiction, this 
5.14 	disclosure shall specify Minnesota. All title brands that appear on the existing certificate 
5.15 	of title for the vehicle or that will appear on the new certificate of title for the vehicle 
5.16 	shall be disclosed.
5.17 	For purposes of this subdivision, "reasonable care" means a standard that requires 
5.18 	providing information the dealer obtained from manufacturer and auction notices, prior 
5.19 	owner documents and disclosures, and the dealer's own vehicle inspection and repair 
5.20 	records. Reasonable care does not require contacting prior owners or obtaining records 
5.21 	of previous titles unless necessary to clarify inconsistent or questionable information 
5.22 	that is apparent.
5.23 	(b) Disclosures under this section are not limited to those conditions or standards 
5.24 	that require title branding under section 325F.6642.

5.25 	Sec. 7. Minnesota Statutes 2006, section 325F.662, is amended by adding a subdivision 
5.26 	to read:
5.27 		Subd. 8b.Contract cancellation option. (a) A dealer shall not sell a used motor 
5.28 	vehicle to a consumer without granting the consumer a contract cancellation option that 
5.29 	allows the consumer to return the vehicle without cause and without cost, except for a 
5.30 	restocking fee as permitted by this subdivision. This subdivision does not apply to a 
5.31 	used motor vehicle having a purchase price of $40,000 or more, a recreational vehicle as 
5.32 	defined in section 168.011, subdivision 25, or a vehicle when physical modifications have 
5.33 	been requested by the prospective buyer.
6.1 	(b) The contract cancellation option must be contained in a document separate from 
6.2 	the retail installment contract or other vehicle purchase agreement and must contain, at a 
6.3 	minimum, the following:
6.4 	(1) the name of the dealer and the consumer;
6.5 	(2) a description and the vehicle identification number of the vehicle purchased;
6.6 	(3) a statement specifying the time within which the consumer must exercise the 
6.7 	right to cancel the purchase under the contract cancellation option and return the vehicle 
6.8 	to the dealer. The dealer shall not specify a time that is earlier than the dealer's close 
6.9 	of business on the second day following the day on which the vehicle was originally 
6.10 	delivered to the consumer by the dealer;
6.11 	(4) a statement that clearly and conspicuously specifies the dollar amount of any 
6.12 	restocking fee the buyer must pay to the dealer to exercise the right to cancel the purchase 
6.13 	under the contract cancellation option. The restocking fee must not exceed $125 if the 
6.14 	vehicle's cash price is $10,000 or less, $250 if the vehicle's cash price is less than $15,000 
6.15 	but greater than $10,000, $375 if the vehicle's cash price is less than $20,000 but greater 
6.16 	than or equal to $15,000, and $500 if the vehicle's cash price is $20,000 or greater; 
6.17 	(5) a statement specifying the maximum number of miles that the vehicle may be 
6.18 	driven after its original delivery by the dealer to the consumer to remain eligible for 
6.19 	cancellation under the contract cancellation option. A dealer shall not specify fewer than 
6.20 	250 miles in the contract cancellation option;
6.21 	(6) a statement that the contract cancellation option gives the consumer the right to 
6.22 	cancel the purchase and obtain a full refund; and that the right to cancel will apply only if, 
6.23 	within the time specified in the contract cancellation option, the following are personally 
6.24 	delivered to the dealer by the consumer:
6.25 	(i) a written notice exercising the right to cancel the purchase signed by the 
6.26 	consumer;
6.27 	(ii) any restocking fee specified in the contract cancellation option; 
6.28 	(iii) the original contract cancellation option document and vehicle purchase contract 
6.29 	and related documents, if the dealer gave those original documents to the consumer;
6.30 	(iv) all original vehicle titling and registration documents, if the dealer gave those 
6.31 	original documents to the consumer;
6.32 	(v) an amount in certified funds to reimburse the dealer for its payments on the 
6.33 	buyer's behalf to discharge a lien on a vehicle left by the buyer as a down payment or 
6.34 	trade-in. If the dealer has sold or otherwise transferred title to the motor vehicle that was 
6.35 	left as a down payment or trade-in, the reimbursement amount owed to the dealer is only 
7.1 	the amount that the dealer's payment to the lienholder exceeds the value of the vehicle 
7.2 	as indicated on the sales contract or purchase order; and
7.3 	(vi) the vehicle, free of all liens and encumbrances other than any lien or 
7.4 	encumbrance created by or incident to the sales contract, any loan arranged by the dealer, 
7.5 	or any purchase money loan obtained by the consumer from a third party, and in the same 
7.6 	condition as when it was delivered by the dealer to the consumer, reasonable wear and tear 
7.7 	and any defect or mechanical problem that manifests or becomes evident after delivery 
7.8 	that was not caused by the buyer excepted, and which must not have been driven beyond 
7.9 	the mileage limit specified in the contract cancellation option. The agreement may also 
7.10 	provide that the consumer will execute documents reasonably necessary to effectuate the 
7.11 	cancellation and refund and as reasonably required to comply with applicable law; and
7.12 	(7) at the bottom of the contract cancellation option document, a statement that 
7.13 	may be signed by the consumer to indicate the consumer's election to exercise the 
7.14 	right to cancel the purchase under the terms of the contract cancellation option, and 
7.15 	the last date and time by which the option to cancel may be exercised, followed by a 
7.16 	line for the consumer's signature. A particular form of statement is not required, but 
7.17 	the following statement is sufficient: "By signing below, I elect to exercise my right to 
7.18 	cancel the purchase of the vehicle described in this agreement." The consumer's delivery 
7.19 	of the contract cancellation option document to the dealer with the consumer's signature 
7.20 	following this statement shall constitute sufficient written notice exercising the right to 
7.21 	cancel the purchase. The dealer shall provide the consumer with the statement required 
7.22 	by this paragraph in duplicate to enable the consumer to return the signed contract 
7.23 	cancellation document and retain a copy of the contract cancellation document.
7.24 	(c)(1) No later than the third day following the day on which the consumer exercises 
7.25 	the right to cancel the purchase in compliance with the contract cancellation option, the 
7.26 	dealer shall cancel the contract and provide the consumer with a full refund in person or 
7.27 	by United States first class mail, postage prepaid; and
7.28 	(2) the dealer shall return to the consumer, no later than three days after the consumer 
7.29 	exercises the right to cancel the purchase, any motor vehicle the consumer left with the 
7.30 	dealer as a down payment or trade-in. If the dealer has sold or otherwise transferred title 
7.31 	to the motor vehicle that was left as a down payment or trade-in, the full refund described 
7.32 	in clause (1) shall be the value of the motor vehicle left as a down payment or trade-in, 
7.33 	as stated in the sale contract or purchase order less any amount paid by the dealer to a 
7.34 	lienholder on the buyer's behalf. The dealer shall provide the full refund in the form of 
7.35 	cash, a negotiable instrument as defined in section 336.3-104, or draft conditioned on the 
7.36 	verification of an instrument accepted by the dealer as part of the buyer's down payment.
8.1 	(d) If the dealer received a portion of the purchase price by credit card, or other 
8.2 	third-party payer on the consumer's account, the dealer must refund that portion of the 
8.3 	purchase price to the credit card issuer or third-party payer for credit to the consumer's 
8.4 	account.
8.5 	(e) If the dealer received a portion of the purchase price by check or other negotiable 
8.6 	instrument as defined in section 336.3-104, the dealer need not return the amount of 
8.7 	the payment until after the check or negotiable instrument is finally paid as provided in 
8.8 	section 336.4-213.
8.9 	(f) A dealer whose cancellation offer exceeds the requirements contained in this 
8.10 	subdivision, and whose cancellation offer in the contract of sale provides a purchase 
8.11 	cancellation agreement disclosing the terms of that cancellation offer shall be deemed to 
8.12 	have complied with this section.
8.13 	(g) Notwithstanding paragraph (a), a dealer is not required to grant a contract 
8.14 	cancellation option to an individual who exercised the individual's right to cancel the 
8.15 	purchase of a vehicle from the dealer pursuant to a contract cancellation option during the 
8.16 	immediately preceding 30 days or to an individual that has exercised a purchase option on 
8.17 	a vehicle the individual has previously leased. A dealer is not required to give notice to a 
8.18 	subsequent consumer of the return of a vehicle under this section. This subdivision does 
8.19 	not abrogate or limit any disclosure obligation imposed by any other law.
8.20 	(h) This subdivision does not affect or alter the legal rights, duties, obligations, or 
8.21 	liabilities of the consumer, the dealer, or the dealer's agents or assigns that would exist in 
8.22 	the absence of a contract cancellation option. Notwithstanding the existence of a contract 
8.23 	cancellation option and the fact that the dealer may retain title to the vehicle, the consumer 
8.24 	is deemed the owner of the vehicle for purposes of sections 65B.41 to 65B.71 and 169.09, 
8.25 	subdivision 5a, when the consumer takes delivery until the vehicle is returned pursuant 
8.26 	to a contract cancellation option.

8.27 	Sec. 8. Minnesota Statutes 2006, section 325F.662, subdivision 10, is amended to read:
8.28 		Subd. 10.Limitation on actions. A private civil action brought by a consumer 
8.29 	under this section with respect to a warranty claim must be commenced within one year 
8.30 	of the expiration of the express warranty.