House committee substitute to the 2nd edition makes the following changes.

Further amends GS 20-305 to limit the proposed exception to now provide that instead of purchasing or leasing any special tools required by a manufacturer, factory branch, distributor, or distributor branch, a franchised dealer that sells fewer than 250 new motor vehicles (was, 350 new motor vehicles) per year may request approval from the manufacturer to enter into a local tool loaner agreement with another dealer if the eight conditions are met. Among the conditions that must be satisfied for a local tool loaner agreement is that eligible special tools exceed $2,000 (was, $1,500) per special tool. 

Adds to the proposed changes to GS 20-305, which (1) allows franchised new motor vehicle dealers who believe 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 assigned to that dealer to request the elimination of the contested territory from the dealer's area of responsibility by submitting a written request and (2) 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. No longer qualifies the petition right on the basis of a belief by the dealer at any time that area assignment is unreasonable. Specifies the method of submitting the written request for elimination of the contested territory. Adds information the request must contain, including that the dealer must describe the territory the dealer is seeking to remove from its area of responsibility and a factual explanation for the dealer's contention of the changed factors warranting modification of the dealer's area of responsibility. Now deems the dealer's request accepted if notice of objection of the request is not sent within 90 days of request (was, within 60 days). Adds a new provision allowing for either party to request mediation within 30 days of the dealer's receipt of notice of the manufacturer's rejection. Requires mediation to begin within 60 days after the request for mediation is made and conclude within 120 days after the manufacturer, factory branch, distributor, or distributor branch objected to the dealer's proposed changes in its area of responsibility. Now allows a dealer to file a petition and have an evidentiary hearing within 60 days of the conclusion of mediation or within 60 days of receipt of the manufacturer's objection of the dealer's request for elimination of the contested territory. At the evidentiary hearing, places the burden of proof on the franchised new motor vehicle dealer that it would be unreasonable to continue to include the contested territory in the dealer's area of responsibility due to changes in specified relevant circumstances that are beyond the control of the dealer (previously, alternatively allowed for the dealer to show that the contested territory was arbitrarily assigned based on sales and registrations within the dealer's market, which is incorporated in the specified related circumstances to be considered).

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 for any of the three specified purposes 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). 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. Allows a manufacturer, factory branch, distributor, or distributor branch  to present local criteria, data, and facts in any petition or hearing before the Commissioner of Motor Vehicles (Commissioner) requested by the dealer in the event the dealer's current or past performance in sales or service constitutes any part of the basis of the decision as specified. Makes additional conforming and clarifying changes.

Amends GS 20-305.1 regarding automobile dealer warranty and recall obligations. Now includes in the definition of audit conducted for cause audits based on (1) the dealer's claim history; (2) a follow up to an earlier audit in which the dealer was notified of a claim documentation procedure violation that occurred within the prior 12-month period, as specified; or (3) reasonable evidence of malfeasance or fraud. Also amends the definition of for cause concerning audits of dealers relating to exporters or brokers to include reasonable evidence that the dealer knew or should have known that the customer intended to export or resell the motor vehicle. 

Eliminates the proposed changes to GS 20-305.2 regarding unfair methods of competition and motor vehicle subscriptions. 

Eliminates the proposed changes to GS 20-305.7 and instead provides the following. Amends GS 20-305.7 to make 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. Adds that in the instance a dealer elects to void the requirement, the dealer is automatically entitled to all benefits earned under the applicable incentive program or contest or any other contract or agreement. 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 dealer management 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 provide a dealer notice, in a standalone written document, at least 30 days before making any changes in any of the dealer or customer data the dealer is required to share (as proposed in the previous edition). The changes in the data are void unless the applicable manufacturer, factory branch, distributor, or distributor branch complies with the notice requirements. Establishes that the dealer's data contained in or on a dealer management computer system owned, leased, or licensed by a dealer located in the state is the property of the dealer. Defines dealer data and dealer's data to mean information or other data that has been entered or stored on the dealer's dealer management computer system, as specified, that relates to one of the 14 subjects; makes explicit exclusions, including proprietary software, intellectual property, data, or information of a dealer management computer system. 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) unreasonably interfere with a dealer's ability to protect, store, copy, share, or use any dealer data downloaded from a dealer management computer system used by a new motor vehicle dealer located in the state; sets out an inclusive list of examples of such prohibited conduct; (2) access, use, store, or share any dealer data from a dealer management computer system in any manner other than by express written agreement; (3) fail to provide the dealer with the option and ability to securely obtain and push or otherwise distribute dealer data to third parties; (4) fail to provide access to any SOC 2 audit within seven days of receiving a dealer's written request; (5) fail to promptly provide a dealer a written listing of all entities with whom the dealer's data is shared currently and over the preceding 12 months upon request, including the dates the data was shared and the extent that information can be reasonably stored by the vendor; and (6) fail to promptly provide a copy of the dealer's data maintained on its dealer management computer system to the dealer in a secure, usable manner upon the dealer's written request to terminate any contract or agreement regarding the hardware or software related to the dealer's dealer management computer system. Specifies that the statute does not prevent charging a fee so long as fees are disclosed to and approved by the dealer prior to the time the dealer incurs the charges. Specifies that the statute does not prevent any dealer or third party from discharging legal obligations to protect and secure protected dealer data. Allows a dealer to condition a party's access to or integration with a dealer management computer system upon compliance with reasonable security standards or other operational protocols that the vendor specifies. Excludes from the term third party any manufacturer, factory branch, distributor, distributor branch, or subsidiary or affiliate thereof. Deems dealer rights under the statute not waivable or able to be modified. Effective October 1, 2020, and applies to all current and future franchises and other agreements in existence between any new motor vehicle dealer located in the state and a manufacturer, distributor, dealer management computer system vendor, or third party as of that date.

Modifies the proposed changes to GS 20-308.1(d) concerning standing for dealer associations. Now provides standing requirements for any association comprised of a minimum of 400 new motor vehicles, or a minimum of 10 motorcycle dealers or recreational vehicle dealers to intervene as a party in any civil or administrative proceeding in order to prevent injury or harm to all or a substantial number of its members or to prevent injury or harm to the franchise distribution system of new motor vehicles in the state, including the right to file a civil action (previously, did not include recreation vehicle dealer associations, and did not include the right to file a civil action). Modifies and adds to what constitutes a cognizable injury to the collective interest of association members; specifically excludes denial of a license renewal, license revocation, or other enforcement actions initiated by the DMV. Limits association intervention to seeking declaratory relief and/or injunctive relief. Expands the provisions regarding collateral estoppel to include the same distributor(s) as well. Clarifies that the collateral estoppel provisions comply with state law. Exempts from the dealer association provisions dealer motor vehicle licenses issued to a manufacturer pursuant to specified state law, as amended, so long as the exclusion from association standing is not applicable in the event the manufacturer applies for or is issued more than the maximum licenses permitted or upon the occurrence of any of the specified events. 

Amends GS 20-305.1, concerning truck dealer cost reimbursement when a dealer sells a truck directly to converters and other nondealer retailers, to increase the cap from $900 to $1,500 on what a manufacturer, manufacturer branch, distributor, or distributor branch can be paid per vehicle registered in the state whose chassis has a gross vehicle weight rating of 16,000 pounds or more. 

Amends GS 20-305.2 to make the unfair competition provisions which prohibit manufacturers from having any ownership, operation, or control of motor vehicle dealers in the state applicable to manufacturers also applicable to affiliates of manufacturers. Expands the prohibitions to prohibit owning, operating, or controlling any entity in the state that provides warranty service or repairs at retail, filing a dealer application, or being licensed. Eliminates the existing fourth exception from the prohibition following a determination by the Commissioner at a hearing that there is no independent dealer available in the relevant market area to own and operate the franchise as specified. Instead, creates an exception for the ownership, operation, or control of up to five motor vehicle dealership locations within the state prior to December 31, 2020, or up to six on or after January 1, 2021, by a manufacturer that manufactures and sells only plug-in electric vehicles, limited to only manufacturers that had at least one motor vehicle dealership licensed in the state as of December 1, 2019. Sets parameters for the DMV to deny licenses in excess of the limits provided, and revoke licenses upon the occurrence of any of the four specified events, including the manufacturer entering into a franchise with any dealer located in the state. Additionally, creates an exception for a manufacturer that manufactures and distributes low-speed vehicles that meet applicable NHTSA standards; limited to a manufacturer that had at least one motor vehicle dealership licensed in the state as of March 1, 2019.

Amends GS 20-288, adding new requirements for applications for new motor vehicle dealer licenses, including requiring the application be accompanied by an application for a dealer license plate, and for the applicant to certify whether the applicant or any parent, subsidiary, affiliate, or any other entity related to the applicant is a manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler. Prohibits license issuance unless the applicant states on the application the specific exception for which it contends to qualify or the Commissioner determines the applicant qualifies for an exception after an evidentiary hearing. Requires the DMV to publish at least 15 days' notice of initial license applications in the NC Register, as specified. Adds a similar certification requirement for applications for used motor vehicle dealer licenses, requiring the applicant to certify whether the applicant or any entity having common ownership or affiliation with the applicant is a motor vehicle manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler, and if so, whether the applicant contends it qualifies for a motor vehicle dealer license under any exception to the prohibition on issuance of the license to any manufacturer and the like under GS 20-305.2(a).