AN ACT TO CLARIFY MOTOR VEHICLE DEALERS AND MANUFACTURERS LICENSING LAWS. Enacted June 22, 2018. Effective June 22, 2018.
Summary date: Jun 25 2018 - View summary
Summary date: Jun 13 2018 - View summary
Senate committee substitute makes the following changes to 2nd edition. Deletes amendments to GS 20-288(a1)(2), concerning licensure for used motor vehicle dealers. Amends GS 20-305(50), concerning unlawfulness of coercing a new motor vehicle dealer to change location or make alterations to its dealership facilities. Applies only to dealerships with alterations of facilities within the preceding 10 years costing more than $250,000, indexed to the Consumer Price Index. Previously threshold was $100,000 of alterations. Requires that changes were made toward compliance with a facility initiative or facility program that was sponsored or supported and approved by the manufacturer or distributor. Changes costing less than $250,000 will be governed by the applicable subdivisions of this section. Adds exception that this statute will not apply to any facility change that is voluntarily agreed to by the new motor vehicle dealer and for which the dealer receives facilities-related compensation from the manufacturer or distributor for the alteration equivalent to at least a majority of the cost incurred. Adds new subdivision (51), making it unlawful for manufacturers to use criteria for measuring the sales or service performance of franchised new vehicle dealers for the purpose of terminating a franchise agreement which are unfair and do not consider relevant data of comparable dealers. If a survey is used, it must be based on a valid sample size. Places the burden of proof on the distributor or manufacturer with respect to proceedings under this subsection. Forbids distributors from relying on these criteria to terminate a franchise relationship if the criteria are found to be unfair.
Amends GS 20-305.1, concerning automobile dealer warranty and recall obligations, removing requirement for vehicle manufacturers and distributors to include in the written notice of motor vehicle dealer's obligations the obligations for any service performed under a maintenance plan, extended warranty, certified pre-owned, or service contract issued by the manufacturer or distributor or their agents. Removes requirement for disclosure to include the schedule of compensation for service in connection with any services performed by the dealers under any warranty or service contract issued by the manufacturer, distributor, or their agent. Requires that reasonable compensation for warranty and recall service be competitive with the retail rates charged for parts and labor by other franchised dealers of the same line-make located within the dealer's market. Requires that if there are no other same line-make dealers located in the dealer's market or if they are all owned by the same entity, prices may be compared to competing line-make vehicles. Amends subsection (b), adding back exception for compensation for parts used to repair the living facilities of recreational vehicles. Removes new prohibition making it unlawful for any manufacturer or distributor to fail to fully compensate dealers for warranty work including repair of living facilities of the vehicle and any equipment, appliances, and other options included by the manufacturer. Makes conforming changes with respect to compensation for a qualifying used motor vehicle. Adds new subsection (i), setting out compensation for used motor vehicle recall. Makes it unlawful for any manufacturer or distributor to fail to compensate a franchised motor vehicle dealer for any qualifying used vehicle in the inventory of a dealer authorized to sell new vehicles of the same line-make or by a dealer authorized to perform recall repairs on vehicles of the same line-make. Requires the manufacturer or distributor to compensate the dealer for any qualifying used vehicle in the dealer's inventory at the prorated rate of at least 1.5% per month of the average trade-in value of the vehicle beginning on the date the vehicle is qualified and ending when it is no longer qualifying. Requires distributors to create an efficient process for franchised dealers to submit monthly compensation claims. Adds new subsection (j), defining terms for use with used vehicles. Defines qualifying used motor vehicle as a vehicle of a line-make for which the dealer holds an active franchise to sell and service, subject to a recall notice and subject to a stop-sale or do-not-drive order, for which parts to fully repair the underlying defect were not made available by the dealer within 30 days of the notice of recall, and is owned by the dealer at the time a stop-sale order is issued. Defines a used vehicle as no longer qualifying when either the parts necessary to repair the underlying defect are made available, or the dealer sells or trades the vehicle, or the stop-sale is no longer in effect. Adds subsection (k), which requires that any compensation provided to the dealer pursuant to subsection (i) may not be combined with any other state or federal recall compensation civil remedy for recall of used vehicles.
Removes changes to GS 20-305.5, GS 305.2, and GS 20-101.3.
Amends GS 20-305.7(b) to remove restriction on a third party to whom a dealer's data was provided to charge the dealer a fee to reimburse the third party for fees to access the dealer's data. Removes declaration that the rights conferred under this subsection on a dealer are not waivable and may not be modified by any contract or agreement. Removes clarifying changes.
Amends GS 20-79.02(g), extending deadline for dealers to place LD license plates on loaner vehicles to January 1, 2021.
Extends SL 2015-232, sections 1.1 [amending GS 20-4.01(48a)] and 1.4 [amending GS 20-79(d)], to December 31, 2020.
Summary date: Jun 12 2018 - View summary
Senate committee substitute is to be summarized.
Summary date: Apr 19 2017 - View summary
House committee substitute makes the following changes to the 1st edition.
Deletes proposed language in GS 20-305.1(b), making it unlawful for any motor vehicle manufacturer, factory branch, distributor, or distributor branch to fail to fully compensate its motor vehicle dealers licensed in the state for a qualifying used motor vehicle. Deletes proposed subsections (i) and (j) in GS 20-305.1, requiring manufacturers, distributors, or branches to compensate a franchised motor vehicle dealer for any qualifying used motor vehicle subject to a notice of recall and stop-sale or do-not-drive order issued by the manufacturer or the National Highway Traffic Safety Administration and whose parts to repair the underlying defect are not received by the dealer within 15 days of the notice of recall. Further, eliminates changes to subsection (b1) in GS 20-305.1, which required a manufacturer to pay compensation for a qualifying motor vehicle within 30 days after receipt of the claim. Makes conforming changes to subsection (c) of the statute.
Summary date: Apr 5 2017 - View summary
Substantively identical to S 413, filed 3/28/17.
Amends GS 20-288(a1)(2) to extend the licensing-course exemption for used motor vehicle dealer applicants who operate a new motor vehicle showroom to include all applicants whose new motor vehicle showroom is within 30 miles (currently, 20 miles) of the proposed used motor vehicle showroom.
Amends GS 20-305 to prohibit manufacturers, distributors, or their branches, from requiring, coercing, or attempting to coerce, any new motor vehicle dealer to change the location of its dealership, or to make any substantial alterations to their dealership premises or facilities, if the dealer has done so within the preceding 10 years at a cost of more than $100,000, and the change was made at the request of, or with the knowledge, acquiescence, or approval of, the manufacturer, distributor, or branch. Any dealer not covered by this provision is governed by specified existing subdivisions of this statute.
Amends GS 20-305.1 to further require the motor vehicle manufacturers', distributors', and branches' written notice to their dealers to also include the dealers' obligations for recall service on the products, including service under listed preparation, delivery, and warranty agreements or contracts issued by the manufacturer, distributor, or branch, and the schedule for compensation and time allowances for the expanded list of required services. Makes conforming changes. Requires a manufacturer or distributor to further compensate a dealer for parts and components provided at reduced cost (currently only at no cost) for repairs under a recall, campaign service action, or warranty repair, as specified, and clarifies that the compensation is on the basis of the dealer's average markup on the cost for the part or component, less the cost for the part or component. Makes it further unlawful for manufacturers, distributors, and branches to fail to perform their recall obligations, or to fail to fully compensate their motor vehicle dealers for qualifying used vehicles or recall parts or to recover their costs for compensating their dealers for recall parts (currently only applies to warranty obligations and parts). Eliminates the provision exempting the living facilities of recreational vehicles from this prohibition, and specifies that the prohibition applies to the living facilities of recreational vehicles. Clarifies that claims by dealers concerning compensation for qualifying used motor vehicles under new GS 20-305.1(i) shall be paid by the manufacturer within 30 days. Makes conforming and technical changes. Clarifies that the chargebacks or payments required by a manufacturer from a dealer, which are stayed during a petition to the Commissioner, include compensation for services specified by the earlier amendments.
Enacts new GS 20-305.1(i) and (j), requiring manufacturers, distributors, or branches to compensate a franchised motor vehicle dealer for any motor vehicle subject to a notice of recall and stop-sale or do-not-drive order issued by the manufacturer or the National Highway Traffic Safety Administration and whose parts to repair the underlying defect are not received by the dealer within 15 days of the notice of recall. Specifies the rate of monthly compensation (1.75% of the vehicle's value).
Makes a conforming change to GS 20-305.5.
Amends GS 20-305.2 to prohibit manufacturers, distributors, or branches with franchised motor vehicle dealers to own any interest in, operate, or control any entity that leases or rents motor vehicles to the general public in competition with any of their franchised dealers.
Amends GS 20-305.7 to clarify that the limits in subsection (b) do not apply to customers that meet any of the listed exemption qualifications (currently does not specify whether a customer must satisfy any or all of the qualifications). Clarifies that the lists of third parties to which a manufacturer and so forth provide dealers' data must include each and every such third party. Further requires the list to specify what data was provided to each party and that the lists must be specific to each dealer. Requires the list to show third parties that actually received, not that may have received, data. Prohibits third parties from charging the dealer any fee for access to the dealer's data. Provides that the rights of subsection (b) are not waivable and may not be modified by contract.
Enacts new GS 20-101.3 (Conspicuous disclosure of dealer shop and other service-related fees). Requires motor vehicle dealers to conspicuously display notices of shop fees for service work and other discretionary fees and disclose fees on a customer's invoice prior to charging such fees. Does not require dealers to charge a shop or other service-related fee. Effective January 1, 2018.
Contains a severability clause.
Except as otherwise specified, the act is effective when it becomes law, and applies to all current and future franchises and other agreements in existence between any new motor vehicle dealer in the State and a manufacturer or distributor as of the effective date of this act.