Bill Summary for H 619 (2017-2018)

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Summary date: 

Jun 13 2018

Bill Information:

View NCGA Bill Details2017-2018 Session
House Bill 619 (Public) Filed Wednesday, April 5, 2017
AN ACT TO CLARIFY MOTOR VEHICLE DEALERS AND MANUFACTURERS LICENSING LAWS.
Intro. by Brawley, Ross, Johnson, Clampitt.

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Bill 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.