Bill Summary for H 848 (2019-2020)

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Summary date: 

Apr 22 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
House Bill 848 (Public) Filed Tuesday, April 16, 2019
Intro. by Torbett.

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Bill summary

Makes changes to Article 12, Motor Vehicle Dealers and Manufacturer Licensing Law, of GS Chapter 20 to remove all references to and provisions regarding recreational vehicles. Further, amends the definitions set out in GS 20-4.01 as follows. Now defines motor home (was motor home or house car) to mean a motorized vehicle designed to provide temporary living quarters for recreational, camping, or travel use which contains at least four of the six enumerated independent life support systems. Now defines recreational vehicle (RV) to mean a vehicle that is either self-propelled or towed by a consumer-owned tow vehicle and designed to provide temporary living quarters for recreational, camping, or travel use that complies with all applicable federal vehicle regulations and does not require a special-movement permit to legally use the highways; excludes manufactured homes. Sets forth definitions for the basic types (was entities) of RVs, including a folding camping trailer (was camping trailer), fifth-wheel trailer, motor home, travel trailer, truck camper, and now includes a park model RV, defined as a vehicle that is designed and marketed for temporary living quarters for recreational camping, travel, or seasonal use; not permanently affixed to real property for use as a permanent dwelling; and built on a single chassis mounted on wheels with a gross trailer areas not exceeding 400 square feet in the set up mode. 

Enacts Article 19, Regulation of Recreational Vehicle Dealers and Manufacturers, to GS Chapter 20. Sets forth defined terms applicable to the Article. Establishes licensing requirements for any new RV dealer, used RV dealer, RV sales representative, manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler to engage in business in the State. Requires RV dealers acting as RV sales representatives to additionally obtain an RV sales representative's license. Allows the following license holders to operate as an RV dealer without obtaining an RV dealer's license or paying an additional fee, but limits sales to retail only at an established salesroom: a manufacturer, factory branch, a distributor, and distributor branch. Provides for a civil penalties of no more than $1,000 for licensees, and no more than $5,000 for persons required to be but not licensed, for each violation relating to the sale of RVs, vehicle titling, or vehicle registration, as specified. Details licensure application requirements, including an annual licensing course. Provides exceptions to the licensing course requirements. Requires the Division of Motor Vehicles (DMV) to provide grounds for refusal and other disciplinary action as specified in the Article, all to be considered in the licensing application. Requires certification of familiarity with the Article and other relevant state laws and regulations. Establishes license validity for a period of one year, staggered as specified. Requires an established office, established showroom, or place of business in the State for a wholesaler, RV dealer, or certain trailer dealer, respectively, as specified. Requires separate licenses for each established office, established salesroom, or other place of business in the State for manufacturers, factory branches, distributors, distributor branches, wholesalers, and RV dealers. Establishes requirements for corporate surety bonds or cash bonds in specified amounts. Provides for licensing fees set at $90 for RV dealers, distributors, distributor branches, and wholesalers for each place of business; $195 for manufacturers; $130 for each factory branch; $20 for RV sales representatives; and $20 for factory representatives or distributor representatives. Details requirements of licensees regarding license specifications, its display, advertising, and carrying the license while engaged in business for display on request. Provides special rules regarding license display by new or used RV dealers.

Establishes requirements for licensed RV dealers to obtain a supplemental temporary license to sell antique or specialty RVs, as defined, off-premises. Limits the supplemental license to a period of no more than 10 calendar days. Excludes nonselling RV shows and public displays of new RVs from the supplemental temporary license requirements. 

Sets forth 13 grounds for disciplinary action, including making a material misstatement in a license application, using unfair methods of competition or unfair deceptive acts or practices, conviction of any felony involving moral turpitude.  Requires the DMV to grant or deny an application within 30 days of receipt. Provides for a public hearing upon request for denied applications. Establishes parameters for 10 days' written notice and public hearing prior to denial, suspension, revocation, placing on probation, or refusal to renew a license.

Establishes record retention and inspection requirements for dealers. 

Details requirements, restrictions and limitations for all franchise-related form agreements, as defined, offered to an RV dealer in the State. Provides for a franchised dealer to file a protest and have a protest hearing on any proposed initial offering, modification, or replacement of certain franchise-related form agreements, as specified. Authorizes the Commissioner of Motor Vehicles (Commissioner) to investigate and prevent violations of these provisions. 

Makes it unlawful for any dealer or salesman, or their employee, to coerce or offer anything of value to any RV purchaser to provide any type of insurance coverage on the RV. Also prohibits any dealer, salesman, or representative to accept any policy as collateral on any vehicle sold by the dealer or salesman to secure an interest in a vehicle in any company not qualified under the state insurance laws.

Provides for acts of officers, directors, partners, salesmen and other representatives to be the responsibility of the licensed copartnership or corporation, and grounds for disciplinary action against the licenses if an individual. Provides that licensed manufacturers and factory branches are responsible for their agents or representatives acting within the conduct of the licensee's business.

Establishes that appeals of the Commissioner's actions are governed by GS Chapter 150B, the APA. Details powers and duties of the Commissioner under the Article, including preventing unfair method of competition and unfair or deceptive acts or practices, conducting and governing hearings under the Article, bringing actions against persons in violation of the Article, issuing rules and regulations to implement and establish procedures of the Article, and making determinations in certain dispute resolutions. Requires internal grievance procedures, if elected, to reach completion before filing notice, protest or petition with the Commissioner, as specified. 

Establishes notice requirements of additional charges against a franchised dealer or a franchised dealer's account for merchandise, tools, or equipment, or other charges or amounts totaling more than $5,000, other than specified published costs. Provides for a franchised dealer to dispute actual or proposed additional charges by filing a petition with the Commissioner or filing a civil action, as specified. Establishes parameters for an informal mediated settlement conference for proposed or actual additional charges totaling $10,000 or less against a franchised new RV dealer if the charge is in violation of the Article or contrary to the terms of the franchise. Prohibits filing a petition or civil action prior to electing to participate in the informal appeal, and allows the franchised new RV dealer to proceed with filing a petition or civil action if mediation fails to result in a resolution of the dispute.

Grants rule making authority to the Commissioner and requires publishing rules on the DMV or Department of Transportation (DOT) website 30 days' prior to their effective date.

Establishes requirements for retail installment sales contacts, including delivery of a written statement to the buyer which must be signed by the buyer.

Prohibits coercion of retail dealers by manufacturers and distributors in connection with installment sales contracts, as specified. Declares any such acts with the possible effect of lessening or eliminating competition, or tending to create a monopoly, to be an unfair trade practice and unfair method of competition.

Requires manufacturers and distributors to contract with dealers in order to sell through dealers. Details contractual requirements, including specifying the areas of sales responsibility exclusive to a dealer, criteria for altering the designated territory.

Establishes procedures for a manufacturer or distributor, or a dealer, to terminate, cancel, or file to renew a manufacturer and dealer agreement with or without good cause. Provides for mandatory repurchase of inventory, at the dealer's option, by the manufacturer in certain situations following the termination, cancellation, or nonrenewal of the manufacturer and dealer agreement. Establishes procedures and restrictions for the transfer or change of dealer ownership under an agreement.  

Establishes warranty and indemnification obligations for manufacturers and distributors concerning warranty and recall work performed by dealers and judgments or settlements against manufacturers (incorporating much of the language from GS 20-305.5, as repealed). Concerning indemnification, allows denial of indemnification if the new RV dealer fails to remedy a known and announced defect in accordance with the written instructions of a warrantor for whom the new RV dealer is obligated to perform warranty service, and requires the new RV dealer to indemnify the warrantor to the extent that any losses or damages are caused by the dealer's negligence or willful misconduct. Requires new RV dealers to provide a warrantor a copy of any pending law suit in which allegations are made under the indemnification provisions of the Article within 10 days after receiving the suit.

Establishes requirements for inspection and rejection of new RVs by dealers. Prohibits manufacturers and distributors from coercing a dealer to purchase a product the dealer did not order, enter into an agreement, or enter into an agreement that requires the dealer to submit disputes to binding arbitration or otherwise waives rights and responsibilities provided under the Article. 

Provides for civil actions for actual damages to be brought by a dealer, manufacture or warrantor injured by violations of the Article. Allows for the court to award the prevailing party attorneys' fees and costs. Sets venue parameters. Alternatively provides for mediation prior to bringing a civil suit. Also additionally allows for application to the court for a temporary or permanent injunction.

Provides that the Article is applicable to all franchises and contracts existing between RV dealers and manufacturers, factory branches, and distributors at the time of the Article's ratification, and all future franchises and contracts. 

Establishes jurisdiction in courts with proper venue in the State for any franchisee who is substantially and primarily engaged in the sale of RVs or parts, material or components of RVs, including tune-ups, to bring suit against any franchisor engaged in commerce.

Establishes that any person violating the Article is guilty of a Class 1 misdemeanor. 

Authorizes civil actions for damages and equitable relief for violations of the Article, as specified. Allows for the award of punitive damages for violations shown to be willful, malicious, wanton, or continued multiple violations. Allows for certain RV dealer associations to petition the Commissioner or file for declaratory or injunctive relief on behalf of the association or a member, as provided. 

Subjects to the Article's provisions and State jurisdiction any person who engaged directly or indirectly in purposeful contacts within the State in connection with the offering or advertising for sale, or has business dealings, with respect to a new RV sale within the State. Deems the Article's provisions to be unaffected by choice of law provisions in any written instrument. Deems void and unenforceable any provision of any agreement inconsistent with the Article. Makes it unlawful to use subsidiaries to accomplish wha would otherwise be illegal conduct under the Article by manufacturers and distributors. Subjects to the Article's provisions all written agreements between a manufacturer, wholesaler, or distributor with RV dealers, including but not limited to those specified.

Adds references to new Article 19 to GS 20-52.1, GS 20-72, GS 20-72.1, GS 20-75, GS 20-79, GS 20-79.01, GS 20-79.02, and GS 20-79.1A, concerning title transfer, dealer license plates, and limited registration plates.

Applies to all agreements entered into honor after the date 12 months after the date the act becomes law.