CLARIFY MOTOR VEHICLE LICENSING LAW.

View NCGA Bill Details2013-2014 Session
Senate Bill 327 (Public) Filed Thursday, March 14, 2013
A BILL TO BE ENTITLED AN ACT TO CLARIFY THE MOTOR VEHICLE DEALERS AND MANUFACTURERS LICENSING LAW.
Intro. by Apodaca.

Status: Ref to the Com on Transportation, if favorable, Commerce and Job Development (House Action) (May 15 2013)
S 327

Bill Summaries:

  • Summary date: May 9 2013 - More information

    Senate committee substitute makes the following changes to the 1st edition.

    Amends new sub-sub-subdivision (6)to the definition for Motor vehicle dealer or dealer, providing that the terms apply to a person who engages in any of the activities listed in sub-sub-divisions one through five of GS 20-286(11)a using a computer or other electronic communications means to transmit applications, contracts, or orders for motor vehicles purchased or leased by retail purchasers or lessees located in this state.

    Clarifies that the licensing requirements of GS 20-287(a) apply to a license holder as defined in the new definition added in GS 20-286(11)a.

    Amends GS 20-305(30), extending the deadlinefor certain established manufacturer programs that vary the price charged to its franchised dealers in the state, although the programs would otherwise be unlawful under GS 20-305, to continue in effect until June 30, 2018 (was, June 30, 2016). Deletes changes to GS 20-305(33) and (34). Makes technical changes to new subdivisions (44) and (45) of GS 20-305 and provides that (44) also applies to the display of sports memorabilia. Expands the provisions of subdivisions (45), (46) and (47) to clarifythe types ofunlawful acts of coercion and discrimination prohibited under this section.

    Amends new GS 20-305.2(e)to providethat an unfair method of competition includes any physical or mechanical warranty repair(was, any warrantyor nonwarranty fix, repair, update, or adjustment) made or provided directly by a manufacturer or distributor to anymotor vehicle in this state requiring direct participation of a dealer franchised by the manufacturer or distributor and without such dealer receivingreasonable compensation. Adds new subsection (f) to declare that no claim or cause of action may be brought against a dealer in this state arising out of any warranty repair, fix, repair, or update that was provided by the manufacturer or distributor without the direct participation of the dealer. Requires any manufacturer or distributor who violates this provision to fully indemnify and hold harmless any dealer in this state for claims, judgments, damages, attorney's fees, litigation expenses and all other costs arising out of the actual or attempted fix, repair, update or adjustment.

    Makes clarifying and conforming changes to GS 20-305.7(g2). Amends GS 20-305.1 (automobile dealer warranty obligations) to amend the phrase "fair and reasonable" to read "reasonable " wherever it occurs and to amend the phrase "unfair and unreasonable" to read "unreasonable" wherever it occurs. Adds that if the manufacturer or distributor prevails at a protest hearing, the proposed rate is effective beginning 30 days following issuance of the final order.


  • Summary date: Mar 14 2013 - More information

    Section 1

    Amends GS 20-286(11)a., adding a new sub-sub-subdivision to the definition for Motor vehicle dealer or dealer, adding language that provides that any person that engages in the purchase, sale, lease, or exchange of motor vehicles by providing any computer or other communications facilities, hardware, or equipment, anywhere in this state, that uses the computer or other communications facilities, hardware, or equipment for transmitting applications, contracts, or orders for motor vehicles purchased or leased by retail purchasers or lessees in this state, can be considered a motor vehicle dealer or dealer for the purposes of this section.

    Section 2

    Amends GS 20-287(a) (Licenses required; penalties), including the above new definition language for motor vehicle dealer, clarifying that the requirement to have a license applies to people that are considered "dealers" under the new language.

    Section 3

    Amends GS 20-305(30), extending the deadline for certain established manufacturer programs that vary the price charged to its franchised dealers in the state, although the programs would otherwise be unlawful under GS 20-305, to continue in effect until June 30, 2016 (was, June 30, 2014).

    Amends GS 20-305(33), expanding the situations involving loaner vehicles that are illegal under this section to include requiring a dealer to purchase, lease, or title one or more new vehicles for use as a loaner vehicle in order to participate in or qualify for any incentive program offered or sponsored by a manufacturer or distributor, or to receive discounts, credit, rebates, or incentives of any kind that are calculated or paid on a per vehicle basis.

    Amends GS 20-305(34), clarifying the prohibition on requiring, coercing, or attempting to coerce a new motor vehicle dealer in the state to participate in any unreasonable session, meeting, training, or certification program for any purpose. Expounds and gives examples of specific situations where such actions would be considered unlawful.

    Amends GS 20-305 by adding new subsections GS 20-305(44-48), adding to the conduct considered unlawful on the part of any manufacturer, factory branch, distributor, distributor branch, field representative, officer agent, or any other representative as follows:

    (1) GS 20-305(44), providing it is unlawful, aside from other conditions or agreements, to require, coerce, or attempt to coerce any new motor vehicle dealer to refrain from displaying any honors, awards, photos, display, or other artifacts related to the dealership, dealer principal, or any owners or other officials of the business.

    (2) GS 20-305(45), providing it is unlawful, aside from other conditions or agreements, to discriminate against any new motor vehicle dealer for offering service contracts or other products that are not approved, endorsed, or offered by the manufacturer or affiliates. This discrimination includes, but is not limited to the following: requiring or coercing a dealer to exclusively offer their service contracts or similar products, taking or threatening adverse action against a dealer for offering such unendorsed products, measuring performance of a franchise in any part based on the sale of the endorsed or approved products of the manufacturer, requiring a dealer to promote the sale of the manufacturer's products,  or considering the dealer's sale of the approved or endorsed products in determining eligibility to purchase vehicles or parts, the volume of vehicles or parts the dealer can purchase, the price of anything bought from the manufacturer, and the availability of vehicle discounts, credits, special pricing, or rebates.

    Includes language stating examples of actions by a manufacturer which are not considered discrimination.

    (3) GS 20-305(46), providing it is unlawful to require, coerce, or attempt to coerce a dealer to purchase goods or services from a vendor specified, selected, identified, or designated by a manufacturer or affiliate. Allows dealers to file a protest with the Commissioner of Motor Vehicles (Commissioner) in certain circumstances.

    (4) GS 20-305(47), providing it is unlawful to fail to provide to a dealer the right to purchase or lease signs or other franchisor image elements of like kind and quality from a vendor selected by the dealer.

    (5) GS 20-305(48), providing it is unlawful to unreasonably interfere with a dealer's independence in staffing the dealership by requiring the hiring of specific individuals, for specific positions, or by requiring the approval of the manufacturer or affiliate.

    Section 4

    Amends GS 20-305.2 (Unfair methods of competition), creating a new subsection GS 20-305.2(e), stating that an unfair method of competition includes any warranty or nonwarranty fix, repair, update, or adjustment made or provided directly by a manufacturer or distributor to any vehicle in the state without the direct participation of a dealer franchised by the manufacturer or distributor and without such dealer receiving reasonable compensation.

    Section 5

    Amends 20-305.7 (Protecting dealership data and consent to access dealership information), making conforming, technical, and clarifying changes. Extends the provisions concerning direct access to a dealer's computer system so that it also applies to a third party approved, referred, endorsed, authorized, certified, granted preferred status, or recommended by a relevant party. Extends the hold harmless provision in (g2) to also include costs related to the disclosure of security breaches and computer system costs.

    Section 6

    Amends GS 20-305.1 (Automobile dealer warrant obligations), making clarifying and technical changes. Amends GS 20-305.1(a1), stating any reasonable rate determined at a hearing conducted pursuant to this section will be effective as of 60 days after the date of the dealer's initial submission of the customer-paid service orders to the manufacturer or distributor.

    Includes "batteries and light bulbs" in the list included in GS 20-305.1(a2) of work that is excluded when calculating the retail rate customarily charged by the dealer for parts and labor, for purposes of this section.

    Section 7

    Provides that terms and provisions of this act are applicable to all current and future franchises and other agreements in existence between any new motor vehicle dealer in this state and a manufacturer or distributor as of the effective date of this act.

    Section 8

    Severability clause.


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