Bill Summary for H 455 (2019-2020)

Summary date: 

Mar 26 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
House Bill 455 (Public) Filed Tuesday, March 26, 2019
AN ACT TO EXTEND DEADLINES RELATED TO LOANER DEALER REGISTRATION PLATES AND DEALER DATA REQUIREMENTS AND TO INCLUDE OUT-OF-STATE TITLES IN THE TITLE IN TRANSIT PROCESS.
Intro. by Ross, Wray.

View: All Summaries for BillTracking:

Bill summary

Amends the definitions in GS 20-286 that apply to the motor vehicle dealers and manufacturers licensing laws by adding and defining the term special tool or essential tool.

Amends GS 20-305 to make unlawful for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any representative whatsoever of any of them, to require, coerce, or attempt to coerce any new motor vehicle dealer in the state to purchase or lease computer hardware or software used for any purpose other than the maintenance or repair of motor vehicles (was, to purchase nondiagnostic computer equipment or programs). Adds that instead of purchasing or leasing any special tools that are required by a manufacturer, factory branch, distributor, or distributor branch, a dealer may share access to special tools with other dealers if the four specified conditions are met, including that the dealers have franchises with the same manufacturer, factory branch, distributor, or distributor branch, and that sharing tools will not unreasonably delay the completion of repairs. Further amends the statute by amending the definition of goods as used in the prohibition of requiring, coercing, or attempting to coerce a dealer located in this state to purchase goods or services of any nature from a vendor selected, identified, or designated by a manufacturer, distributor, affiliate, or captive finance source when the dealer may obtain goods or services of substantially similar quality and design from a vendor selected by the dealer, provided the dealer obtains prior approval from the manufacturer, distributor, affiliate, or captive finance source, for the use of the dealer's selected vendor. Provides that "goods" does not include parts as reasonably required by the manufacturer to be used in repairs under warranty obligations of a manufacturer or distributor. 

Amends the provisions of GS 20-305 that make it illegal to assign or change a franchised new motor vehicle dealer's area of responsibility under the franchise arbitrarily or without due regard to the present or projected future pattern of motor vehicle sales and registrations within the dealer's market and without having provided the affected dealer with written notice, as specified. Adds that a franchised new motor vehicle dealer who believes that it is unreasonable for a manufacturer, factory branch, distributor, or distributor branch with whom the dealer has entered into a franchise to include one or more portions of the dealer's existing area of responsibility previously unassigned to that dealer may request the elimination of the contested territory from the dealer's area of responsibility by submitting a written request. Sets out additional requirements governing the request. Allows a dealer to file a petition within 60 days of receiving notice of the manufacturer's rejection of the dealer's request to eliminate the contested territory and have an evidentiary hearing. Makes conforming changes. 

Amends the provisions of GS 20-305 that make it illegal to establish, implement, or enforce criteria for measuring the sales or service performance of any of its franchised new motor vehicle dealers in this state that (1) are unfair, unreasonable, arbitrary, or inequitable; (2) do not consider available relevant and material local, State, and regional criteria, data, and facts; relevant and material criteria, data, or facts include those of motor vehicle dealerships of comparable size in comparable markets; and (3) if such performance measurement criteria are based on a survey, the survey must be based on a statistically significant and valid random sample; no longer requires that these actions be taken for the purpose of cancelling, terminating, or nonrenewal of a franchise agreement. Makes conforming changes. Expands upon the types of decisions in which the performance criteria of the manufacture or distributor (which have been found to be faulty in one of the specified ways) may not be used as any part of the determination. Makes additional clarifying changes.

Amends GS 20-305 by making it illegal to prohibit, limit, or restrict a dealer from selling over the Internet parts and accessories obtained by the dealer from the manufacturer, factory branch, distributor, or distributor branch, or from any source recommended or approved by such entities. 

Amends GS 20-305.1 (concerning automobile dealer warranty and recall obligations) to limit conducting the following audits to only one time within a 12-month period: (1) for warranty or recall parts or service compensation, or compensation for a qualifying used motor vehicle; (2) for sales incentives, service incentives, rebates, or other forms in incentive compensation; (3) of a dealer by a manufacturer for sales or leases made to exporters or brokers. Adds that persons or entities employed or contracted by a manufacturer, factory branch, distributor, or distributor branch to conduct an audit of a dealer regulated by the statute must comply with the statue's requirements. Makes it unlawful to contract with or employ any person or other entity to conduct an audit of any motor vehicle dealer in the state regulated under the statute for which the person or entity conducting the audit would be compensated on the bases of the dollar amount, volume, or number of charge backs that would result to the dealer from the audit. 

Amends GS 20-305 to make it illegal for a motor vehicle manufacturer, factory branch, distributor, distributor branch, or subsidiary thereof to own any ownership interest in, operate, or control any motor vehicle dealership in this state that offers motor vehicles for sale, lease, or subscription (was, any motor vehicle dealership in this state). 

Amends GS 20-305.7 to void (was, voidable at the option of the dealer) any requirement that a new motor vehicle dealer provide its customer lists, customer information, consumer contact information, transaction data, or service files to the manufacturer, factory branch, distributor, or distributor branch, or to a third party as a condition to the dealer's participation in any incentive program or contest. Amends one of the three conditions that must be met in order to avoid voiding the requirement to include that the dealer is either permitted to restrict the data fields that may be accessed in the dealers's computer system, or the dealer is allowed to provide the same data or information by furnishing the data in a widely accepted file format. Makes additional clarifying changes. Adds that it is unlawful for any manufacturer, factory branch, distributor, or distributor branch to fail or refuse to a provide dealer notice, in a standalone written document, at least 60 days before making any changes in any of the dealer or customer data the dealer is required to share. The changes in the data is void unless the applicable manufacturer, factory branch, distributor, or distributor branch complies with the notice requirements. Makes it unlawful for any manufacturer, factory branch, distributor, distributor branch, dealer management computer system vendor, or any third party with access to a dealer management computer system to (1) take any action that would prohibit or limit a dealer's ability to protect, store, copy, share, or use any customer or dealer information maintained in a dealer management computer system used by a new motor vehicle dealer located in the state and sets out an inclusive list of examples of such prohibited conduct and (2) engage in cyber ransom. Makes it illegal for any dealer management computer system vendor or other third party who has access to any dealer or management computer system to fail or refuse to (1) adopt and make available a standardized framework for the exchange, integration, and sharing of data from dealer management computer systems with any party authorized to access a dealer management computer system; (2) provide access to open application programming interfaces to any party authorized to access a dealer management computer system; (3) access, use, store, or share any data from a dealer management computer system only to the extent permitted in its written agreement with the dealer; (4) make any agreement regarding access to, sharing or selling of, copying, using, or transmitting data on any dealer management computer system terminable upon no more than 90 days' notice from the dealer; (5) upon receipt of notice of the dealer's intent to terminate its contract, work to ensure a secure transition to a successor dealer management computer system vendor or any other party authorized to access a dealer management computer system; (6) promptly provide a dealer, upon request, with a list of entities with whom it is sharing any data from the dealer management computer system, or to whom it has allowed access to any data from the dealer management computer system; and (7) allow and facilitate a dealer to audit the dealer management computer system vendor's access and use of its dealer management computer system and any data obtained or obtainable from its dealer management computer system.

Amends GS 20-308.1 to give any association comprised of at least 400 new motor vehicle dealers, or at least 10 motorcycle dealers, substantially all of whom are new motor vehicle dealers located within the state and which represents the collective interests of its members, standing to initiate an action or participate as a party to any civil or administrative proceeding in any of the courts or administrative agencies of this state. Removes the requirement of initiating mediation before the association and manufacturer, factory branch, distributor, or distributor branch brings an action. Amends when a  cognizable injury to the collective interest of the members of the association is deemed to have occurred to when a manufacturer, factory branch, distributor, or distributor branch doing business in this state engages in any conduct or takes action that has harmed or would harm or which has or would affect all or a substantial number of franchised new motor vehicle dealers in the state. 

Includes a severability clause.

 

© 2020 School of Government The University of North Carolina at Chapel Hill

This work is copyrighted and subject to "fair use" as permitted by federal copyright law. No portion of this publication may be reproduced or transmitted in any form or by any means without the express written permission of the publisher. Distribution by third parties is prohibited. Prohibited distribution includes, but is not limited to, posting, e-mailing, faxing, archiving in a public database, installing on intranets or servers, and redistributing via a computer network or in printed form. Unauthorized use or reproduction may result in legal action against the unauthorized user.

Printer-friendly: Click to view