The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB433, s. 1 1Section 1. 218.01 (1) (ar) of the statutes is renumbered 218.01 (1) (jf) and
2amended to read:
AB433,2,43 218.01 (1) (jf) "Capitalized Gross capitalized cost" has the meaning given in s.
4429.104 (5) (13m).
AB433, s. 2 5Section 2. 218.01 (3) (a) 18. of the statutes is amended to read:
AB433,3,56 218.01 (3) (a) 18. Having accepted an order or contract of purchase from a buyer
7or a consumer lease or prelease agreement from a lessee or prospective lessee if such
8arrangement results in the practice of bushing. For the purpose of this section,
9"bushing" means, with respect to an order or contract of purchase, the practice of
10increasing the selling price of a motor vehicle above that originally quoted the
11purchaser as evidenced by a purchase order or contract which has been signed by

1both the purchaser and dealer licensee and, with respect to a consumer lease or
2prelease agreement, the practice of increasing the gross capitalized cost above that
3originally quoted the lessee or prospective lessee as evidenced by a consumer lease
4or prelease agreement which has been signed by both the lessee or prospective lessee
5and the dealer licensee.
AB433, s. 3 6Section 3. 218.01 (6x) (e) of the statutes is amended to read:
AB433,3,107 218.01 (6x) (e) No prelease agreement may contain a clause which, upon
8nonacceptance of the motor vehicle by the prospective lessee, would subject the
9prospective lessee to a penalty greater than 5% of the gross capitalized cost of the
10vehicle.
AB433, s. 4 11Section 4. 429.104 (1) of the statutes is amended to read:
AB433,3,1412 429.104 (1) "Adjusted capitalized cost" means the amount computed by
13subtracting from capitalized cost any capitalized cost reduction, for the purpose of
14determining the base lease periodic payment.
AB433, s. 5 15Section 5. 429.104 (3) of the statutes is amended to read:
AB433,3,1916 429.104 (3) "Average periodic lease rent charge" means the lease rent charge
17for the scheduled term of the consumer lease divided by the number of payment
18periods under the consumer lease or, for a single-payment lease, the number of
19months in the term of the lease.
AB433, s. 6 20Section 6. 429.104 (3m) (intro.) of the statutes is amended to read:
AB433,3,2121 429.104 (3m) (intro.) "Balance subject to a lease rent charge" means:
AB433, s. 7 22Section 7. 429.104 (3m) (a) of the statutes is amended to read:
AB433,4,223 429.104 (3m) (a) In the case of a lease other than a single-payment lease, the
24amount calculated by subtracting from the adjusted capitalized cost the sum of the

1first base lease periodic payment and all depreciation amounts accrued during any
2preceding payment periods.
AB433, s. 8 3Section 8. 429.104 (3m) (b) of the statutes is amended to read:
AB433,4,64 429.104 (3m) (b) In the case of a single-payment lease, the amount calculated
5by subtracting the total lease rent charge from the sum of the residual value and all
6lease rent charges accrued during any preceding computational periods.
AB433, s. 9 7Section 9. 429.104 (4) (intro.) of the statutes is amended to read:
AB433,4,98 429.104 (4) (intro.) "Base lease periodic payment" means an amount
9determined as follows:
AB433, s. 10 10Section 10. 429.104 (4) (a) of the statutes is amended to read:
AB433,4,1311 429.104 (4) (a) With respect to a single-payment lease, the product of the
12number of months in the scheduled term of the lease multiplied by the sum of the
13average periodic lease rent charge and the average periodic depreciation.
AB433, s. 11 14Section 11. 429.104 (4) (b) of the statutes is amended to read:
AB433,4,1615 429.104 (4) (b) With respect to a lease other than a single-payment lease, the
16sum of the average periodic lease rent charge and the average periodic depreciation.
AB433, s. 12 17Section 12. 429.104 (5) of the statutes is renumbered 429.104 (13m) and
18amended to read:
AB433,5,819 429.104 (13m) "Capitalized Gross capitalized cost" means the sum of all
20amounts capitalized in the consumer lease that, after subtracting the capitalized
21cost reduction, amortizes to the residual value by the depreciation portion of the
22periodic lease payments over the scheduled term of the lease or, for a single-payment
23lease, the single payment. These amounts may include taxes; fees for registration,
24license, acquisition, administration and assignment; other fees; charges for
25insurance, service contracts and extended warranties; and charges for a waiver of the

1contractual obligation to pay the gap amount, for accessories and their installation,
2for other services and benefits incidental to the consumer lease, and for delivering,
3servicing, repairing or improving the vehicle. With respect to a vehicle or other
4property traded in connection with a consumer lease, the term may include the
5outstanding unpaid balance of the amount financed under a consumer loan, as
6defined in s. 421.301 (12), or a retail instalment contract, as defined in s. 218.01 (1)
7(t), or the unpaid balance of any early termination costs under a lease or other
8obligation of the lessee. The term does not include any lease rent charge.
AB433, s. 13 9Section 13. 429.104 (6) of the statutes is amended to read:
AB433,5,1410 429.104 (6) "Capitalized cost reduction" means the sum, at the time of
11inception of the consumer lease, of any payments made by cash, check, rebates or the
12like that constitute a downpayment made by the lessee and the net amount credited
13by the lessor for any trade-in. The term does not include any base lease periodic
14payments due at the inception of the consumer lease.
AB433, s. 14 15Section 14. 429.104 (16) of the statutes is renumbered 429.104 (23m) and
16amended to read:
AB433,5,1917 429.104 (23m) "Lease Rent charge" means the sum of all charges payable by
18the lessee for the privilege of making the scheduled lease payments under a
19consumer lease. The term does not include gross capitalized cost.
AB433, s. 15 20Section 15. 429.104 (24) of the statutes is amended to read:
AB433,5,2321 429.104 (24) "Residual value" means the estimated value of the leased vehicle
22at the expiration of the lease term that is used in the consumer lease to determine
23the depreciation portion of the base lease periodic payment.
AB433, s. 16 24Section 16. 429.203 (2m) (form) (d) of the statutes is repealed.
AB433, s. 17
1Section 17. 429.203 (2m) (form) (e) of the statutes is renumbered 429.203 (2m)
2(form) (d).
AB433, s. 18 3Section 18. 429.203 (3) (a) of the statutes is amended to read:
AB433,6,114 429.203 (3) (a) The gross capitalized cost, using the term "gross capitalized
5cost", and an explanation of the term in substantially the following language: "The
6gross capitalized cost is the agreed-upon amount determined at the inception of the
7consumer lease for all items and services included in the lease other than the charges
8you pay for the privilege of making the scheduled lease payments
value of the vehicle
9($.... [insert the agreed-upon value of the vehicle]) and any items that you pay over
10the lease term (such as service contracts, insurance and any outstanding prior loan
11or lease balance)
."
AB433, s. 19 12Section 19. 429.203 (3) (b) of the statutes is amended to read:
AB433,6,1713 429.203 (3) (b) Any capitalized cost reduction, using the term "capitalized cost
14reduction", and an explanation of the term in substantially the following language:
15"The capitalized cost reduction is any cash, check, rebate or the like and, if
16applicable, net trade-in allowance
the amount of any net trade-in allowance, rebate,
17noncash credit or cash that you pay
that reduces the gross capitalized cost."
AB433, s. 20 18Section 20. 429.203 (3) (c) of the statutes is amended to read:
AB433,6,2519 429.203 (3) (c) The adjusted capitalized cost, using the term "adjusted
20capitalized cost", and an explanation of the term, as applicable, in substantially the
21following language: "The adjusted capitalized cost is the agreed-upon amount that
22serves as the basis for determining the base lease payment. If you are not in default
23on the consumer lease, this amount (plus any applicable early termination charges)
24determines your maximum early termination obligation
is used in calculating your
25base periodic payment
."
AB433, s. 21
1Section 21. 429.203 (3) (d) of the statutes is amended to read:
AB433,7,72 429.203 (3) (d) The residual value of the leased vehicle, using the term
3"residual value", and an explanation of the term in substantially the following
4language: "The residual value is the estimated value of the leased vehicle at the end
5of the lease term that is used in determining the depreciation portion of the base lease
6payment. Your purchase option price, if any, may be a different amount
value of the
7vehicle at the end of the lease used in calculating your base periodic payment
."
AB433, s. 22 8Section 22. 429.203 (3) (e) 1. of the statutes is amended to read:
AB433,7,119 429.203 (3) (e) 1. With respect to a single-payment lease, a statement of the
10lease rent charge included in the single payment and a separate statement of the
11depreciation portion of the single payment.
AB433, s. 23 12Section 23. 429.203 (3) (e) 2. of the statutes is amended to read:
AB433,7,1513 429.203 (3) (e) 2. With respect to a lease other than a single-payment lease, a
14statement of the lease rent charge included in the total of the periodic payments and
15a separate statement of the depreciation portion of the total of the periodic payments.
AB433, s. 24 16Section 24. 429.203 (3) (f) of the statutes is repealed.
AB433, s. 25 17Section 25. 429.203 (6) (c) of the statutes is amended to read:
AB433,7,2418 429.203 (6) (c) If the lessee does not purchase, maintain in force and provide
19satisfactory proof of insurance against loss of or damage to the leased vehicle and
20against liability arising out of the ownership, maintenance or use of the leased
21vehicle, the lessor may purchase motor vehicle insurance to protect the lessor's
22interest in the leased vehicle and against the lessor's liability arising out of the
23ownership, maintenance or use of the leased vehicle. The lessor may include the cost
24of such insurance in the lease rent charge.
AB433, s. 26 25Section 26. 429.207 (2) (f) 1. of the statutes is amended to read:
AB433,8,4
1429.207 (2) (f) 1. The sum of the balance subject to a lease rent charge and the
2lease rent charge earned in advance for the computational period in which the early
3termination occurs, calculated in accordance with the constant yield method or any
4other generally accepted accounting principle.
AB433, s. 27 5Section 27. 429.207 (2) (f) 2. of the statutes is amended to read:
AB433,8,86 429.207 (2) (f) 2. An amount determined in accordance with generally accepted
7actuarial principles under which the lease rent charge is calculated on the adjusted
8capitalized cost for the time outstanding.
AB433, s. 28 9Section 28. Nonstatutory provisions.
AB433,8,1510 (1) Notwithstanding the treatment of sections 218.01 (1) (ar), (3) (a) 18. and (6x)
11(e), 429.104 (1), (3), (3m) (intro.), (a) and (b), (4) (intro.), (a) and (b), (5), (6), (16) and
12(24), 429.203 (2m) (form) (d) and (e), (3) (a), (b), (c), (d), (e) 1. and 2. and (f) and (6)
13(c) and 429.207 (2) (f) 1. and 2. of the statutes by this act, prior to October 1, 1997,
14a person is in compliance with those sections if the person complies with those
15sections as they appeared in the 1995 Wisconsin Statutes.
AB433, s. 29 16Section 29. Initial applicability.
AB433,8,1817 (1) This act first applies to leases entered into on the effective date of this
18subsection.
AB433,8,1919 (End)
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