House Bill H0196

2015 Freedom Index Score: (-2)

Analyst: Parrish Miller
Date of analysis: February 26, 2015

ANALYST'S NOTE: House Bill 196 deals with auto manufacturers and dealers and with their licensure.
The bill bans manufacturers from selling their vehicles directly to consumers and empowers the Idaho
transportation department to deny licensure to any entity that attempts to do so.

Point No. 4 Does it increase barriers to entry into the market? Examples include occupational
licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers
to entry into the market?
ANALYSIS: House Bill 196 modifies Section 49-1613, Idaho Code, to dictate that "it shall be
unlawful for any [vehicle] manufacturer or distributor licensed under this chapter to... "engage
in the distribution, sale, lease, or offer for sale or lease, of a new motor vehicle to purchasers
who acquire the vehicle in this state except through a dealer with whom the manufacturer or
distributor has established a written franchise agreement." This is explicit and unapologetic
cronyism which prevents an entity which creates a thing from selling or leasing that thing
directly to someone who wishes to purchase or lease said thing. (-1)
ANALYSIS: House Bill 196 modifies Section 49-1602, Idaho Code, to mandate that "the
department shall deny a license under this chapter when the issuance of a new license would
cause a manufacturer or distributor to be in violation of section 49-1613, Idaho Code. This
section shall not preclude the department from taking an action against a current licensee."
When combined with the change delineated above, this code serves to make it impossible for a
manufacturer or distributor to obtain a license if they intend to deal directly with their
customers. Once again, we see impenitent rent-seeking by established interests who wish to
prevent entrepreneurs from cutting into their market share. (-1)