House committee substitute to the 2nd edition makes the following changes. Makes organizational changes to account for new content in Section 8, discussion below.

Section 1.

Amends GS 20-305 (concerning coercing a dealer to accept commodities not ordered; threatening to cancel franchise; preventing transfer of ownership; granting additional franchises; terminating franchises without good cause; preventing family succession), as follows. Now prevents the manufacturer when deciding whether to approve a dealer's transfer, sale, assignment or specified management or successor change, from requiring an applicant to provide information about or basing a disapproval (was, manufacturer could not inquire about or consider) on whether any of the described persons had taken adverse action against the applicant’s application or whether the applicant or other specified persons had previously commenced a civil or administrative proceeding against any manufacturer or distributor, under GS 20-305(4)(i). Removes provisions from new GS 20-305(4)(j) that would have required a manufacturer or distributor to reimburse both the dealer and applicant for their respective attorneys' fees if a manufacturer or distributor takes adverse action as described in response to a dealer’s proposed ownership transfer as described and both the dealer and applicant elect not to appeal from or otherwise seek civil or administrative redress from the adverse action. Limits reimbursement of such fees to when the manufacturer or distributor’s adverse action is ultimately overturned by a reviewing court or administrative agency, and after all appellate remedies within this State are exhausted, if it is found that the turndown was unreasonable (previously, no requirement that the turndown be unreasonable). Makes organizational changes. Makes clarifying changes and reduces the number and model mix of new motor vehicles that a manufacturer must have provided the dealer in order to terminate, cancel or opt to not renew a dealer’s franchise agreement for good cause from enough for the dealer to achieve all elements of the manufacturer's performance criteria to enough vehicles for the dealer to have made substantial progress toward compliance with the manufacturer's performance criteria.

Clarifies that only travel trailers, slide-in truck campers, and park models that are part of the franchise between the manufacturer/distributor and the dealer are part of the new types of new and unsold goods that the manufacturer must purchase if cancelling a franchise.

Section 2.

Removes provisions that would have required a manufacturer or distributor to compensate a franchised or new franchised motor vehicle dealer in an amount not less than 20% of the gross compensation that was collected from the customer under the described circumstances in GS 20-305(57)(c) and (d) from GS 20-305(57). Expands the period of time that an itemized statement detailing over-the-air or remotely activated products and services that were sold to the dealer's customers and calculating the fees and commissions to which the dealer is entitled from at least monthly to covering a period of time not to exceed six months, unless otherwise agreed to by the parties. Requires the dealer to submit such a request in writing before the obligation to provide the itemized statement applies. Also requires the described manufacturer or distributer in GS 20-305(57)(f) to provide a dealer with an itemized schedule of compensation the dealer will receive for the sale of all over-the-air or remotely activated permanent or temporary motor vehicle accessories, options, add-ons, services, features, improvements, or upgrades offered by the manufacturer or distributor, including an updated schedule of compensation as described. Makes organizational changes.

Section 3.

Now requires, under GS 20-305(4)(e), that the proposed candidate have supplied reasonably sufficient performance data to the manufacturer upon request as a condition for placing the burden of proof as described, on a manufacturer if they are objecting to a proposed change in the executive management or principal operator of the dealership on the candidate's alleged poor past performance. Replaces references to “national average” with “State or national average, whichever of these standards is customarily employed by the manufacturer.”

Section 4.

Expands what is excluded from a motor vehicle dealer performing warranty or recall work under GS 20-286(11)7 to also encompass any remote transmission of software to a motor vehicle in the course of performing work under a warranty or pursuant to a recall, that is provided at no cost to the vehicle owner or lessee.

Section 5.

Makes the following changes to the definition of the term sell added to GS 20-286, applicable to Article 12 (Motor Vehicle Dealers and Manufacturers Licensing Law). Removes “exchange” as one of the alternatives terms encompassed by the definition. Specifies that “selling” does not include: (1) a repurchase, replacement, or exchange of a motor vehicle with a consumer under Article 15A; or (2) setting a manufacturer's or distributor's suggested retail price, advertising generally available finance or lease terms, or offering generally available customer incentives. Removes advertising from the act of directly or indirectly offering a motor vehicle for sale as specified. Exempts receiving payment under a retail installment contract or lease from the act of offering a vehicle for sale. Modifies the act of accepting reservation for a specific motor vehicle identified by Vehicle Identification Number or other product identifier if the manufacturer or distributor promptly assigns the reservation to a franchised dealer in the State that is authorized to sell the vehicle being reserved. Removes exchange of a motor vehicle from the act of offering or negotiation terms with a retail consumer. Excludes setting a manufacturer or distributor’s suggested retail price or offering incentives. Incorporates the authorization in GS 20-305(53) pertaining to negotiation directly with a retail customer as an exception the described negotiations constituting one of the acts of sale. Removes reference to exchange from the act of offering or negotiating directly with a retail customer for service contacts or other related products. Excludes taking assignments of leases, performing required actions pursuant to such leases, or receiving payments under a lease agreement from the act of any retail lease transaction where a retail consumer leases a vehicle for a period of at least months.

Section 7.

Amends GS 20-305(58) so that it is now unlawful to require a dealer to accept ownership or possession of, or fail to refund and take back from the dealer within 30 days of the dealer's written request, a new and unused motor vehicle that either (1) cannot be sold at retail due to the existence of an open recall that cannot be repaired within 30 days of the later of the issuance of the recall notice or the dealer taking possession of the vehicle, missing or inoperable parts or components that have not been accounted for on the vehicle invoice, or a stop sale order that cannot be resolved within the later of 30 days of the issuance of the recall notice or the dealer taking possession of the vehicle; or (2) has not actually been delivered to a dealer within 120 days after the manufacturer or distributor has represented to the dealer that the vehicle was shipped to the dealer. (Was, unlawful trade practice to sell, transfer to floor plan, assign a certificate of origin, or otherwise require a dealer to accept ownership or possession of a new motor vehicle that either (1) cannot be immediately sold at retail due to the existence of an open recall, missing or inoperable part or component, or stop sale order or (2) has not actually been delivered to a dealer within 90 days after the manufacturer or distributor has represented to the dealer that the vehicle was shipped.)

Section 8.

Adds the following content.

Modifies the information that a motor vehicle manufacturer, factory branch, distributor or distributor branch must specify in writing to each of its motor vehicle dealers under GS 20-305.1(a) (automobile dealer warranty and recall obligations) to now include obligations related to pre-sale maintenance, manufacturer-directed component installation or assembly, and schedule of compensation related to defective airbag shipping, storage, and disposal if the airbag is removed from a consumer’s motor vehicle as party of a described repair, for shipping, storage, or disposal of any other parts, fluids, or vehicle components.  Removes requirement that time allowances for the performance of preparation, delivery, warranty, and recall work and service must be reasonable and adequate for the work to be performed. Removes provisions pertaining to retail rates charged for parts and labor by other franchised dealers of the same line-make located within the dealer's market. Specifies that the average of the parts markup rate and the average labor rate are both be presumed to be accurate (was, reasonable). Makes conforming changes.  

Prevents a manufacturer or distributor from unreasonably denying a written request submitted by a dealer for modification of a manufacturer's or distributor's uniform time allowance for a specific warranty repair, or a request submitted by a dealer for an additional time allowance for either diagnostic or repair work on a specific vehicle covered under warranty, provided the request includes any information and documentation reasonably required by the manufacturer or distributor to assess the merits of the dealer's request. Removes audits based on statistical evidence that the dealer's claims are unreasonably high and audits based on the dealer’s claims submission violating reasonable claims documentation or other requirements from, the term audit conducted for cause.

Section 9 (was, Section 8).

Specifies, in GS 20-305(33), that in the event that a manufacturer has its own loaner vehicle program in which a dealer has elected not to participate, the manufacturer may limit the dealer's daily reimbursement amount to the same daily reimbursement amount as the manufacturer would have paid the dealer for a vehicle of similar size and class provided by the dealer under the manufacturer's loaner program, plus applicable taxes and third-party fees. Permits a manufacturer to establish policies consistent with the provisions of the statute for dealers to submit claims for loaner vehicle cost reimbursement.