Engrossed Substitute Senate Bill 6354 amends multiple existing statutes regulating relationships between motor vehicle manufacturers, distributors, and franchised dealers (including RCW 46.96.010 and 46.96.185 and several sections in chapter 46.70 and 46.17) and adds a new section to chapter 43.330 RCW. The bill restricts certain manufacturer practices (for example, discriminatory pricing, preferential allocation, and competing with dealers by owning or operating dealerships or warranty service facilities), creates specific exceptions and eligibility criteria for manufacturer ownership or operation of dealerships, and establishes new dealer protections and procedural requirements for franchise modifications, relocations, facility changes, and management approvals. Legally, the bill changes substantive dealer-manufacturer law, creates new regulatory exceptions for qualifying battery electric vehicle (BEV) manufacturers, and revises licensing, enforcement, and penalty provisions. It allows a narrowly defined class of U.S.-incorporated BEV-only manufacturers that meet specified state and registration thresholds as of January 1, 2026, to own or operate single-line dealerships under conditions and caps (including a 45 percent ownership cap in one exception, a 15-mile minimum distance requirement, and a limit of 4% of a manufacturer’s statewide franchises), subject to licensing and oversight. The bill authorizes private parties to seek relief under RCW 46.96.260, prohibits misuse of dealer confidential information, and requires written notices and timelines for franchise modifications and some relocations or management changes. The bill changes penalties and funding procedures: it authorizes the licensing director to deny, suspend, or revoke licenses and assess civil penalties up to $1,000 per violation for specified misconduct, amends misdemeanor treatment for chapter violations, and establishes a $10,000 penalty per retail sale or lease consummated in Washington by a manufacturer that is prohibited from acting as a dealer and is ineligible for the exemption. It raises the certificate of title application fee to $40 through December 31, 2036 (then $15 thereafter) and directs portions of fee revenue to an electric vehicle account and multimodal account; 35 percent of the $25 portion collected on dealer retail sale or lease transactions through 2036 is deposited to the electric vehicle account to fund instant rebates for individuals meeting the "vulnerable populations" definition in RCW 70A.02.010. The department is directed, subject to appropriation, to develop an instant-rebate EV incentive program in coordination with the interagency electric vehicle coordinating council, and section 7 of the act takes effect October 1, 2026. The extracted text does not specify which agency is "the department," does not include the full text of several amended subsections, and does not provide the effective date for all provisions.

If enacted, the bill lets certain U.S.-incorporated manufacturers that produce only battery electric vehicles and meet registration and service-facility tests as of January 1, 2026, open and run their own Washington dealerships and related finance or service companies, but only if they get a dealer license and stay within ownership, distance, and percentage caps. At the same time it strengthens protections for existing franchised dealers: manufacturers and their agents cannot favor some dealers with lower actual prices or allocations, cannot force unwarranted facility changes or relocations before specified time limits, must give advance notice of agreement changes, cannot use dealer confidential information to compete, and are barred from running warranty service facilities that compete with dealers. Enforcement tools include license denial, revocation, civil penalties (including up to $1,000 per licensing violation and a $10,000 penalty per prohibited retail sale/lease by an ineligible manufacturer), and private parties can bring actions to enjoin violations; the department must revoke a manufacturer-created dealer license within 30 days if eligibility lapses. The bill also changes fees and funding: until December 31, 2036, a $40 certificate-of-title fee on dealer retail sales/leases is imposed (then $15 afterward), with portions distributed to existing transportation accounts and 35 percent of a $25 share directed to an electric vehicle account to fund instant rebates for people defined as “vulnerable populations,” and 65 percent to the multimodal transportation account. The department is required, subject to available appropriations, to set up the instant-rebate program in coordination with an interagency council; that program and some enforcement dates take effect in 2026 or later. Important details needed to predict full impact are missing from the provided text: the specific agency referenced as “the department,” the full new section added to chapter 43.330 RCW that would spell out the rebate mechanics, and the exact effective dates for some penalty provisions.