CLARIFY MOTOR VEHICLE DEALER LAWS.

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View NCGA Bill Details2023-2024 Session
House Bill 447 (Public) Filed Wednesday, March 22, 2023
AN ACT TO CLARIFY VARIOUS MOTOR VEHICLE DEALER LAWS.
Intro. by B. Jones, Ross, Wray.

Status: Ch. SL 2023-116 (Aug 24 2023)

Bill History:

H 447/S.L. 2023-116

Bill Summaries:

  • Summary date: Aug 24 2023 - View Summary

    AN ACT TO CLARIFY VARIOUS MOTOR VEHICLE DEALER LAWS. SL 2023-116. Enacted August 24, 2023. Except as provided in Section 2(b), Sections 1 through 6 are effective September 1, 2023. Effective August 24, 2023, except as otherwise provided.


  • Summary date: Jun 28 2023 - View Summary

    Senate amendment to the 3rd edition makes the following changes.

    Amends GS 20-305(65)b.1. (pertaining to manufacturer websites), so that it now makes it unlawful for any manufacturer or distributor to fail to give, to the extent technologically feasible and practicable (was, practical), substantially equivalent visibility to all of the manufacturer's or distributor's authorized same line-make franchised dealers that are located in this State, on the websites described in the definition, and authorizes the manufacturer or distributor to limit visibility either at the election of the customer or in relation to the distance of the authorized dealer to the customer or the location at which the customer appears to be.

    Amends the title to Section 3.


  • Summary date: Jun 27 2023 - View Summary

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

    Section 1(a).

    Amends GS 20-305(53)b.1., which makes it unlawful for a person to fail or refuse to allow retail customers (was, consumers) the ability to directly purchase from any of its franchised dealers all makes and models of new vehicles its authorized to sell to expand the exceptions to this rule to include when the inability to provide vehicles to the dealer is based on natural disasters, or other factors or events beyond the control of the manufacturer or distributor.  

    Amends GS 20-305(53)b.2., which makes it unlawful for a person to refuse to do or fail to require that all of the new vehicles manufactured or distributed by the manufacturer or distributors that sold or leased to retail customers (was, purchasers or lessees) located in the State be physically delivered by an authorized same line-make franchised dealer (was, just same line-make franchised dealer) either selected by the retail customer or closest to the retail customer (was, same line-make dealer closes to the purchaser or lessee in addition to line-make dealer selected by purchaser or lessee).  Exempts fleet sales to a fleet customer that has a designation as such by the manufacturer or distributor. Makes conforming changes.

    Amends GS 20-305(53)c., which specifies that it is unlawful for a person to fail or refuse to allow all of its franchised dealers located in the State to do any of six listed things, as follows. Amends GS 20-305(53)c.2. so that it pertains to the storage of new and used propulsion batteries (was, new and used batteries). Changes the amount of reimbursement to a dealer from the full cost of storing used batteries more than 30 days after the manufacturer or dealer has been notified of their availability to be picked up to the reasonable pro-rata cost of storing used batteries for that period. Specifies that nothing in the sub-sub-subdivision will be deemed to grant a dealer the right to purchase new or used propulsion batteries from a manufacturer or distributor to maintain in the dealer's inventory. Clarifies that a dealer's right to order propulsion batteries from or through a manufacturer or distributor and maintain a reasonable supply of such batteries in stock is governed by the same provisions, limitations, and availability as the dealer's right to order and stock other parts, as delineated in GS 20-305(53)c.4. (discussed below).

    Amends GS 20-305(53)c.3., so that it now makes it unlawful for a person to fail or refuse to allow its franchised dealers the opportunity to purchase, on the same terms (was, just purchase), used vehicle inventory distributed or made available by that manufacturer or distributor without imposing any unrelated or unreasonable (was, any additional) conditions or requirements on their dealers.

    Amends GS 20-305(53)c.4. which now makes it unlawful for a person to fail or refuse to allow all of its franchised dealers located in the State to, subject to availability, have the opportunity to order from or through the manufacturer or dealer a reasonable supply of parts required for service or repair of the manufacturer or dealer’s vehicles based on the volume of warranty service work performed by the dealer (was, just service work and no subject to availability language). Expands the scope of the exemptions to include failures of the manufacturer or distributor to provide parts due to Acts of God, material shortages, product recalls (was, product recalls beyond the control of the manufacturer or distributor), or other factors beyond the control of the manufacturer or distributor. Permits a manufacturer or distributor to impose reasonable restrictions and limitations on a dealer's ability to order and maintain in inventory certain parts exclusively used for a particular model of motor vehicle, provided that: (1) the model is publicly designated by the manufacturer or distributor as being a specialty or limited production motor vehicle and (2) worldwide production of the motor vehicle model is less than 10,000 vehicles in any given model year.

    Amends GS 20-305(53)c.5., which now makes it which makes it unlawful for a person to fail or refuse to allow all of its franchised dealers located in the State to engage independent advertising if the manufacturer or distributor has not contributed tangible items of property or resources owned or paid for by the manufacturer or distributor towards the dealer’s specific advertising material (was, just dealer’s advertising) in addition to other previously listed contributions. Amends the exemptions so that it now clarifies that GS 20-305(53)c.5. does not authorize a dealer to advertise the products offered by the manufacturer or distributor in a disparaging or misleading manner (was, in a manner that disparages or violates the reasonable brand image requirements of the manufacturer or distributor) in addition to not authorizing interference with intellectual property rights.

    Amends GS 20-305(53)d., which makes it unlawful for a person to engage in any of the following things pertaining to the sale and negotiation of all motor vehicles in the State, as follows. Amends GS 20-305(53)d.1.(making it unlawful for a person to retain ownership of new motor vehicles until they are sold or leased to retail customers in the state, subject to certain exceptions) to allow a manufacturer, factory branch, distributor, or distributor branch to retain ownership of new motor vehicles held in a common supply of new vehicles until such vehicles are sold to its authorized franchised dealers. Makes technical changes.

    Amends GS 20-305(53)d.2. to increase the exceptions to its prohibition on consigning new motor vehicles to its franchised dealers in this State for dealer inventory or for sale or lease to retail customers located in this State to include a sale or lease of a vehicle in connection with a replacement under GS Chapter 20, Article 15A or for display purposes.    

    Amends GS 20-305(53)d.3., (making it unlawful to reserve the right to negotiate binding terms of sale or lease directly with retail customers purchasing or leasing new motor vehicles located in this State) so that it now authorizes a manufacturer or distributor to engage in fleet sales to a fleet customer that has a designation as such by the manufacturer or distributor (previously, specified that displaying a manufacturer’s or distributor's retail price on a manufacturer or distributor-owned or controlled website or other electronic or digital means of communication will not be considered negotiating binding terms of sale or lease).

    Amends GS 20-305(53)d.4. (prohibiting a person from designating its franchised dealers in the State to be only delivery agents), as follows. Specifies that nothing in GS 20-305(53)(d)(4) prohibits a manufacturer or distributor from: (1) setting or advertising a suggested retail price, minimum advertised price, employee or supplier discount price, or special finance, lease, or other  promotional offers; (2) stating an estimated trade-in valuation of a customer's vehicle that is designated as such and based on a valuation guide whose identity is conspicuously  disclosed; provided that in close proximity to any such stated estimated trade-in valuation, the manufacturer or distributor conspicuously discloses that the actual valuation of any used vehicle is dependent on many factors and the dealer is not obligated to accept the estimated trade-in valuation; or (3) displaying prices that dealers voluntarily set and choose to display. Makes clarifying change.

    Deletes GS 20-305(53)d.5., which clarified that nothing in GS 20-305(53)d. prohibits a manufacturer or distributor from setting or advertising a suggested retail price or a minimum advertised price.

    Amends GS 20-305(53)d.5. (was, GS 20-305(53)d.6.) which prohibits a person from unreasonably impeding or interfering with the ability of its rural and other franchised dealers in the State to obtain from that manufacturer or distributor certain vehicles for sale in the State, as follows. Clarifies that the prohibition applies only to vehicles with the dealer is authorized to sell. Changes the definition of technologically advanced vehicle (TAV) to mean an electric vehicle (EV) or hydrogen vehicle (was, any vehicle that utilizes an alternative technology other than an internal combustion engine for propulsion, with examples given). Amends defined term unreasonably impede or interfere with so that it no longer includes charging a dealer or no longer requiring that a dealer located in the State invest or spend more than 10% above the minimum TAV investment. Now specifies that if a manufacturer or distributor has established any  training, infrastructure, capital, or equipment requirements as a condition for a dealer to sell TAVs, to fail or refuse to promptly cause, at a dealer's request, a detailed, itemized, individual dealer assessment to determine the minimum TAV investment each dealer would need to make for training, facilities, tools, parts, equipment, and charging stations for vehicle service and for training dealership employees and customers. (Was, If a manufacturer or distributor has established any training, infrastructure, capital, or equipment requirements as a condition for a dealer to sell TAVs, to fail or refuse to promptly cause, at a dealer's request, a detailed, itemized, individual dealer assessment to be performed for each of its franchised dealers located in this State that desires to sell and service that manufacturer's or distributor's TAVs to determine the  minimum TAV investment each dealer would need to make for training, facilities, tools, parts, equipment, and charging stations for vehicle service and for training dealership employees and customers.)

    Amends GS 20-305(53)d.6. (was, GS 20-305(53)d.7.) so that now it is now unlawful for a person to withhold all or any portion of any incentive payment from any of its dealers located in this State on the basis of a dealer's failure to comply with any unlawful or prohibited condition or requirement (was, also contrary or inconsistent with the subdivision).

    Amends GS 20-305(53)d.7. (was, GS 20-305(53)d.8.) so that it is only unlawful for a person to require, coerce, or attempt to coerce a dealer to make expenditures related to achieving or making progress toward achieving CO2 neutrality (was reductions or neutrality) at the dealer’s facility at the expense of the dealer. 

    Makes organizational changes.

    Section 1.(c).

    Amends exceptions to new GS 20-305(55) (unlawful for a person to interfere with the independence and governance of a dealer or dealer applicant having multiple owners by requiring, coercing, or attempting to coerce the dealer or dealer applicant to enact specified measures that would alter its governance, facilities, and finances) to specify that it does not prohibit a manufacturer or distributor from requiring the dealer or dealer applicant to designate a single natural person that the manufacturer or distributor may contact and who will be responsible for all business communications with the manufacturer or distributor (was, just business communications) and day to day business  decisions not identified in GS 20-305(55) (was day-to-day business decisions with the manufacturer or distributor), or from requiring that the designated person be physically present at the dealership premises.

    Section 1.(d).

    Amends the definition of motor vehicle under GS 20-286(10) (definitions of the NC Motor Vehicle Dealers and Manufacturers Licensing Law) so all autonomous vehicles are motor vehicles that are subject to the licensing law, except as otherwise provided in GS 20-286(10)(c). Defines autonomous vehicle as a motor vehicle that utilizes autonomous or self-driving technology rated at Level 0, 1, 2, 3, 4, or 5 by the Society of Automotive Engineers.

    Section 2.(a).

    Amends GS 20-305(56) (setting forth conduct that constitutes the unreasonable interference of the establishment, maintenance, operation, or control of either a single location dealer website or dealer group website) as follows.

    Amends definition of single location dealer website so that it now means a website that is owned or operated by or on behalf of a new motor vehicle dealer that is licensed in this State and that advertises, markets, displays, sells, or leases new and used motor vehicles that are only available for sale or lease at the dealership owned by that dealer. (Was, a website that is owned or operated by a new motor vehicle dealer or an entity that is affiliated with a new motor vehicle dealer licensed in this State and that advertises, markets, displays, sells, or leases new and used motor vehicles that are only available for sale or lease at a single dealership location within this State.)

    Amends definition of dealer group website so that it now means website that is owned or operated by or on behalf of a new motor vehicle dealer licensed in this State and that advertises, markets, displays, sells, or leases new and used motor vehicles that are available for sale or lease at more than one dealership location within this State. (Was, a website that is owned or operated by one or more affiliated new motor vehicle dealers or one or more affiliated entities licensed in this State and that advertises, markets, displays, sells, or leases new and used motor vehicles that are available for sale or lease at more than one dealership location within this State.)

    Narrows the definition of unreasonable interference so it no longer includes bonuses or incentives programs created or sponsored by a manufacturer or distributor. Instead, the definition now includes any contractual or other prohibition or any policy that does any of the list of six non-exhaustive instances of unreasonable interference. Amends provisions of non-exhaustive list pertaining to unlawful restriction of use of manufacturer logos and marks by single location dealer and group dealer website to specify that they cannot advertise the products offered by the manufacturer or distributor in a disparaging or misleading manner.  Makes conforming changes to account for new definitions set forth above. Makes clarifying changes. Further clarifies that nothing in GS 20-305(56)(a) prevents a manufacturer or distributor from preventing ingle location dealer and group dealer website from advertising the products offered by the manufacturer or distributor in a disparaging or misleading manner.   

    Amends GS 20-305(65)b.1. (pertaining to manufacturer websites), so that it now makes it unlawful for any manufacturer or distributor to fail to give, to the extent technologically feasible and practical (was, just technologically feasible), substantially equivalent visibility to all of the manufacturer's or distributor's authorized same line-make (was, same franchised) franchised dealers that are located in this State, on the websites described in the definition, but now authorizes the manufacturer or distributor to limit visibility either at the election of the customer or in relation to the distance of the authorized dealer to the customer or the location at which the customer appears to be. Removes reference to prices in GS  20-305(65)b.2. (prohibiting websites or other electronic or digital means of communication for sale or lease of vehicles directly between the manufacturer or distributor and retail customers in the State). Specifies that nothing in GS 20-305(65)b.2. prevents a manufacturer or distributor from engaging in fleet sales to a fleet customer that has a designation as such by the manufacturer or distributor, or establishing or offering employee or supplier discount pricing, provided the dealer is not required to participate in such  program.

    Effective November 1, 2023, and applies to all current and future franchises and other agreements in existence between any new motor vehicle dealer located in this State and a manufacturer or distributor as of that date.

    Section 3.

    Deletes prior Section 3, which amended GS 20-305.2 and replaces it with the following. Amends GS 20-305(14), which makes it unlawful to delay, refuse, or fail to deliver motor vehicles or motor vehicle parts or accessories in reasonable quantities relative to the new motor vehicle dealer's facilities and sales potential in the new motor vehicle dealer's market area as determined in accordance with reasonably applied economic principles, or within a reasonable time, after receipt of an order from a dealer having a franchise for the retail sale of any new motor vehicle sold or distributed by the manufacturer or distributor, any new vehicle, parts or accessories to new vehicles as are covered by such franchise, and such vehicles, parts or accessories as are publicly advertised as being available or actually being delivered in this State (currently, just delivered). Specifies that the delivery to another dealer of a motor vehicle of the same model and similarly equipped as the vehicle ordered by a motor vehicle dealer who has not received delivery thereof, but who has placed his written order for the vehicle prior to the order of the dealer receiving the vehicle, shall be prima facie evidence (currently, just evidence) of a delayed delivery of, or refusal to deliver, a new motor vehicle to a motor vehicle dealer within a reasonable time, without cause. Expands the requirements governing how every manufacturer, factory branch, distributor, or distributor branch must allocate its products within this State by adding the following additional requirements: (1) allocates available vehicle features and options to each of its authorized same line-make dealers in a fair, reasonable, and equitable manner that takes into consideration the dealer's historical experience and success in selling vehicles similarly configured and that contain similar options; (2) discloses to each of its franchised dealers handling the same line-make, both its system of allocation and the dealer's actual new vehicle allocation that occurred during the previous calendar month and during the previous six calendar months, including, but not limited to, a complete breakdown by model, color, equipment, and, to the  extent tracked by the manufacturer or distributor, other available features and an explanation of the derivation of the allocation system, including its mathematical formula or formulae, in a clear and comprehensible form. Specifies uses for the data. Exempts manufacturers or distributors of Class 4 vehicles or above (Gross Vehicle Weight Rating exceeding 14,000 lbs.) as classified by the Federal Highway Administration from the disclosure requirements described above. Deletes reallocation provisions for certain new motor vehicle dealers. 

    Section 4.

    Deletes amendments to GS 20-305 that would have made it illegal for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any of those entity’s representatives to use economic coercion (as defined) to influence a dealer to participate in or comply with any program or policy sponsored, endorsed, or supported by the manufacturer or distributor, in order to sell any model, type, or series of vehicle or other products or services, in addition to other listed prohibited conduct. 

    Now enacts new GS 20-305(58) which makes it illegal for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any of those entity’s representatives to sell, or activate for a fee, any permanent or temporary motor vehicle accessory, option, add-on, service, feature, improvement, or upgrade on or to any motor vehicle owned or leased by a retail customer located in this State, through over-the-air or remote means, unless the manufacturer or distributor complies with six listed requirements, including: (1) the manufacturer or distributor permits all of its franchised same line-make dealers that are located in this State to sell the same motor vehicle accessory, option, add-on, service, upgrade, feature or improvement to retail customers on the same terms offered by the manufacturer or distributor; (2) permanent or temporary motor vehicle accessory, option, add-on, service, upgrade, feature or improvement is activated or installed directly on the retail customer's motor vehicle through remote electronic transmission; and (3) provisions pertaining to reasonable dealer compensation by the manufacturer or distributor when the sale or activation of a permanent or temporary motor vehicle accessory, option, add-on, service, upgrade, feature, or improvement  by either the manufacturer or the direct involvement of the dealer who sells or leases the vehicle to the retail customer occurs at the time of the new motor vehicle sale or lease, or within the 12-month period  immediately following the sale or lease of the new motor vehicle.

    Deletes amendments to GS 20-286 that would have added to the definitions that apply in Article 12, Motor Vehicle Dealers and Manufacturers Licensing Law, of GS Chapter 20 the term sell or selling, so that it would have specified that it applies to retail customers and transactions. Deletes proposed amendments to GS 20-305 that would have made it illegal for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any of those entity’s representatives to (1) engage in this State in any of the activities of a motor vehicle dealer, except as expressly permitted by GS 20-305.2 (unfair methods of competition; protection of car-buying public), or to compete with any of its same line-make dealers in this State with respect to the sale of any products or services that the dealer is authorized to sell pursuant to its franchise, by the manufacturer's or distributor's remote electronic transmission to the retail customer of any motor vehicle accessory, option, add-on, feature, improvement, or upgrade and (2) sell or lease any motor vehicle of a line-make for which it has any in-state franchised dealers directly to an in-state end user or to activate for a fee any vehicle accessory, option, add-on, feature, improvement, or upgrade, on or to any vehicle owned or leased by an in-state end user, in a manner other than through a same line-make dealer within a five-year period subsequent to the sale or lease of the vehicle to the retail customer. Deletes amendments to GS 20-305.2 that would have permitted a manufacturer or distributor to sell certain a motor vehicle accessories, options add-ons, features, improvements, or upgrades for a motor vehicle of a line-make manufactured, imported, or distributed by the manufacturer.

    Section 5.

    Deletes amendments to GS 20-305.1(a1) including amendments to the presumption related to the reasonableness of the average parts makeup rate and the average labor rate and concerning the filing of a protest when a manufacturer or distributor believes the dealer's submission is fraudulent.

    Section 7.

    Amends GS 20-296, concerning notice and hearing requirements when a license of a new motor vehicle dealer, used motor vehicle dealer, motor vehicle sales representative, manufacturer, factory branch, factory representative, distributor, distributor branch, distributor representative, or wholesaler is suspended, revoked, denied, placed on probation, or renewal is refused. Adds that for each alleged violation, the Division of Motor Vehicles must determine whether entering into a settlement agreement or consent order with the licensee or application either before or after the hearing would promote the interests of justice and administrative efficiency; provides that this is unappealable. Makes additional clarifying and technical changes. Applies to violations occurring on or after December 1, 2023.

    Section 8.

    Amends GS 20-75.1 (Conditional delivery of motor vehicles) to delete the requirement that a dealer inform the purchaser’s insurance provider on the day of the purchase, or the next business day after the purchaser secures financing and the manufacturer’s certificate of origin or the certificate of title is executed, if the insurer is not open that day. Replaces the deleted requirement with a new procedure where the dealer executes the manufacturer’s certificate of origin or the certificate of title, and the purchaser or lessee is responsible for informing their insurer that the purchaser’s/lessee’s financing has been approved. Clarifies that the purchaser or lessee is solely responsible for paying for insurance on the vehicle and the dealer is not responsible for the purchaser’s/lessee’s failure to obtain insurance.

    Section 9.

    Amends GS 20-288(a)(1) to create new subsubdivision a1., adding to the requirements that must be met before DMV can issue a vehicle dealer license to an applicant who has indicated that the applicant or its parent, subsidiary affiliate, or other related entity is a manufacturer, factory branch, factory representative, distributor, distributor branch, or distributor representative. Now adds the requirement that the DMV to publish notice in the Carolina Register whenever it receives an application for a motor vehicle dealer license from a manufacturer, factory branch, factory representative, distributor, distributor branch, or distributor representative. Establishes the required contents of that notice, including identifying which of the specific exceptions to the prohibition of dealer licenses for those entities that the applicant contends it qualifies under. Also amends the conditions to be met to specify that the hearing held by the DMV on the application must be no earlier than 30 days after the application notice is published in the Carolina Register. Amends subdivision (a)(2) to require notice of the license application be published promptly in the North Carolina Register upon receipt (was, submission) of a license application. Makes conforming changes to GS 20-295.

    Makes organizational changes throughout.


  • Summary date: Apr 26 2023 - View Summary

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

    Section 1

    Amends GS 20-305, which lists certain conduct that is unlawful for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any representative whatsoever of any of them (collectively, a “person”), as follows.  Reorganizes GS 20-305(53) into subparts: subpart (a), which pertains to certain unlawful acts if a motor vehicle dealer with franchised dealers in the State and it permits a retail customer to reserve or request to purchase or lease a vehicle directly from the manufacturer; and new subparts (b)-(d), as follows.

    Deletes provisions of GS 20-305(53)(b) that made it unlawful for a person to fail or refuse to give equal reference and prominence on any website owned, operated, or controlled by the manufacturer or distributor on which consumers are permitted to order, purchase, or lease vehicles, to all of the manufacturer's or distributor's franchised dealers located in this State.

    Amends GS 20-305(53)(c), which specifies that it is unlawful for a person to fail or refuse to allow all of its franchised dealers located in the State to do any of six listed things, as specified. Deletes GS 20-305(53)(c)(6), which specified that it is unlawful for a person to fail or refuse to allow all of its franchised dealers to have the ability to use any digital platform or digital retailing tool selected by the dealer as long as it is capable of performing the essential functions required by the manufacturer or distributor.

    Amends GS 20-305(53)(c)(1) now specifies that it is unlawful for a person to fail or refuse to allow all of its franchised dealers, subject to availability, have the ability to maintain on the ground and in the dealer's stock a reasonable supply of all makes and models of new vehicles the dealer is authorized to sell (only applies to the extent material shortages not caused by other factors and events beyond the control of the manufacturer or distributor, now including unavailability of parts and recalls) (previous version did not have subject to availability language and only listed Acts of God and labor strikes as events).

    GS 20-305(53)(c)(2) now specifies that it is unlawful for a person to fail or refuse to allow all of its franchised dealers to have the right to store new and used batteries at a safe and secure location selected and paid for by the dealer (was, just selected by the dealer) that is separate from the dealership premises, fail or refuse to compensate dealers for the full cost of storing used batteries more than 30 days after the manufacturer or distributor has been notified by the dealer of their availability to be picked up (prior version also made it unlawful for any person to fail or refuse to compensate and indemnify dealers for all loss and damage caused by vehicle batteries supplied by or through the manufacturer or distributor).

    GS 20-305(53)(c)(3) now specifies that it is unlawful for a person to fail or refuse to allow all of its franchised dealers to have the same opportunity to purchase used vehicle inventory distributed or made available by that manufacturer or distributor without imposing any additional conditions or requirements on their dealers; provided that a manufacturer or distributor may uniformly restrict dealers to purchase through such program only used vehicles for which the dealer holds a franchise (prior version did not have uniform restrictions). 

    GS 20-305(53)(c)(4) now specifies that it is unlawful for a person to fail or refuse to allow all of its franchised dealers to have the opportunity to order from or through the manufacturer or distributor, receive and maintain in stock a reasonable supply of parts required for service and repair of the manufacturer's or distributor's vehicles based on the volume of service work performed by the dealer; provided that this sub-sub-subdivision is not violated to the extent that the failure of the manufacturer or distributor to provide parts is caused by the occurrence of product shortages resulting from natural disasters, unavailability of parts, labor strikes, or product  recalls beyond the control of the manufacturer or distributor (prior version did not have language relating to acts beyond the control of the manufacturer or distributor).

    GS 20-305(53)(c)(5) now specifies that it is unlawful for a person to fail or refuse to allow all of its franchised dealers to have, if the manufacturer or distributor has not contributed money or content towards the dealer's advertising, the right to independently determine the types of physical and digital advertising media the dealer chooses to advertise, including content and format, so long as it does not interfere with intellectual property rights of manufacturers and distributers (prior version did not contain exemption for when manufacturer or dealer contributes money towards dealer’s advertising); provided that nothing in this sub-sub-subdivision allows a  dealer to advertise the products offered by the manufacturer or distributor in a manner that disparages or violates the reasonable brand image requirements of the manufacturer or distributor (prior version did not contain language pertaining to brand image).

    Amends GS 20-305(53)(d), which makes it unlawful for a person to engage in any of the following things pertaining to the sale and negotiation of all motor vehicles in the State, as follows. Deletes provision making it unlawful for a person to maintain a website or other electronic or digital means of communication for negotiating prices or other binding terms of sale of new vehicles directly between the manufacturer or distributor and end users located in this State, including, but not limited to, agreements between the manufacturer or distributor and the end user on prices or other substantive terms of sale or leasing of new vehicles. Now makes it unlawful for a person to retain ownership of new motor vehicles until they are sold to end users located in this State except for fleet sales to a fleet customer that has a designation as such by the manufacturer or distributor (exception not in prior version).  Now makes it unlawful for a person to consign new motor vehicles to its franchised dealers in this State for dealer inventory or for sale or lease to retail customers (was, just sale to end users) located in this State except for the sale or lease of a vehicle in connection with a repurchase under Article 15A of GS Chapter 20.

    Now makes it unlawful for a person to reserve the right to negotiate binding terms of sale or lease (was, just sale) directly with retail customers purchasing or leasing new motor vehicles (was just buyers of new motor vehicles located in this State); provided that displaying a manufacturer's or distributor's retail price on a manufacturer or distributor-owned or controlled website or other electronic or digital means of communication shall not be considered negotiating binding terms of sale or lease in violation of this sub-sub-subdivision. Now makes it unlawful for a person to designate its franchised dealers in this State to be only delivery agents for new motor vehicles and service and parts outlets, reserving for the respective manufacturer or distributor the right to establish the binding terms of vehicle sales or the right to negotiate the binding terms of sale or lease directly with retail customers located in this State (was, just sale to end users); provided that a manufacturer or distributor may engage in fleet sales with a fleet customer that has a designation as such by the manufacturer or distributor (prior version did not have exception for fleet sales). Now specifies that nothing in GS 20-305(53)(d) prohibits a manufacturer or distributor from setting or advertising a suggested retail price or a minimum advertised price. Amends the three non-exhaustive instances of what "unreasonably impede or interfere with" includes under GS 20-305(53)(d)’s provisions pertaining to rural and other franchised dealers’ ability to obtain technologically advanced vehicles (TAV).  Now makes it unlawful for a person to require, coerce, or attempt to coerce a dealer to make expenditures related to achieving CO2 reductions or neutrality at the dealer's facility at the expense of the dealer. Makes organizational changes.

    Amends GS 20-305(44), amending new subsection GS 20-305(44)b, which makes it unlawful for a person to require, coerce, or attempt to coerce any new motor vehicle dealer located in this State to refrain from using all or part of the name of a dealer's founder, owner, existing trade name, or dealer principal in the dealer's trade name; provided the name the dealer proposes to use for its trade name would not disparage the manufacturer's or distributor's brand or be confusing to the consuming public (prior version did not have disparagement/confusion language).

    Amends new GS 20-305(55) (unlawful for a person to interfere with the independence and governance of a dealer or dealer applicant having multiple owners by requiring, coercing, or attempting to coerce the dealer or dealer applicant to enact specified measures that would alter its governance, facilities, and finances) to specify that it does not prohibit a manufacturer or distributor from requiring the dealer or dealer applicant to designate a single natural person that the manufacturer or distributor may contact and who will be responsible for all business communications and day-to-day business  decisions with the manufacturer or distributor, or from requiring that the  designated person own a minimum percentage of ownership reasonably determined by the manufacturer or distributor.

    Section 2

    Makes organizational changes to GS 20-305(56) (setting forth conduct that constitutes the unreasonable interference of the establishment, maintenance, operation, or control of either a single location dealer website or dealer group website). Amends definition of dealer group website. Amends list of six non-exhaustive instances of unreasonable interference. Now specifies in GS 20-305(56)(b), pertaining to manufacturer websites, it is unlawful for any manufacturer or distributor to do either of the following: (1) fail to give, to the extent technologically feasible, substantially equivalent visibility to all of the manufacturer's or distributor's franchised dealers located in this State, on any website owned, operated, or controlled by the manufacturer or distributor on which customers are permitted to order or reserve vehicles for purchase or lease and (2) maintain a website or other electronic or digital means of  communication for negotiating or otherwise establishing prices or other binding terms of sale or lease of new vehicles directly between the manufacturer or distributor and retail customers located in this State, provided that a manufacturer, factory branch, distributor, or distributor branch may maintain a website or other electronic or digital means of communication if the final selling or lease price of the new vehicles is determined by eligible dealers, and provided further that a dealer may not be required to set a non-negotiable price as a condition for the dealer's inclusion on any website owned, controlled, or maintained by a manufacturer or distributor.

    Section 3

    Amends GS 20-305.2 as follows. Now makes it unlawful for any manufacturer or distributor that has any franchised dealers in this State to sell, lease, or otherwise distribute one or more models, brands, or series of motor vehicles in this State that are propelled solely or primarily by electric or hydrogen, or vehicles that utilize autonomous self-driving technology rated at Level 3, 4, or 5 by the Society of Automotive Engineers (was, just electric or hydrogen vehicles), without making some vehicles utilizing the same or substantially similar  advanced technology functionally available for purchase by all of its franchised dealers located in this State within 12 months of the date vehicles possessing such advanced technology are first delivered to any of the manufacturer's or distributor's dealers in this State or at such time as the manufacturer or distributor has sold at least 2,500 vehicles utilizing such advanced technology in this State, whichever date occurs first. Now requires the Commissioner to promptly investigate any complaint brought by a franchised dealer that a manufacturer or distributor with whom the dealer holds a franchise or any affiliated entity has violated this subsection, and, if the Commissioner determines that this subsection has been violated, the Commissioner must take appropriate action against the subject manufacturer or distributor. Deletes language specifying that it is not a violation if the manufacturer or distributor: (1) makes a reasonable quantity of vehicles using the same electric, hydrogen, or other new technology available on some models, brands, or series of vehicles available for all of its existing franchised dealers located within this State to purchase at no additional charge other than the minimum costs necessary for these dealers to sell and service the electric, hydrogen, or other new technology vehicles or (2) is selling, leasing, or otherwise distributing new electric, hydrogen, or other new technology vehicles in this State as part of a trial or introductory program where fewer than 2,000 of the vehicles are sold, leased, or distributed in this State during any 12-month period.

    Section 4

    Amends GS 20-305(14), which makes it illegal for any manufacturer, factory branch, distributor, or distributor branch; or any field representative, officer, agent, or representatives of these entities, to delay, refuse, or fail to deliver motor vehicles or motor vehicle parts or accessories in reasonable quantities relative to the new motor vehicle dealer's facilities and sales potential in the new motor vehicle dealer's market area, or within a reasonable time, after receipt of an order (was, bona fine sold retail customer order) from a dealer that has a franchise for the retail sale of any new motor vehicle sold or distributed by the manufacturer or distributor, any new vehicle, parts or accessories to new vehicles as are covered by such franchise, and such vehicles, parts or accessories as are publicly advertised as being available or actually being delivered. Deletes requirements that the manufacturer or distributor fill each bona fide retail customer order from one of its in-state franchised dealers in the chronological sequence in which the order is received without regard for or consideration of the dealer’s previously earned allocation of vehicles and requires the orders to be filled before the manufacturer or distributor allocates vehicles similarly configured and have similar options to dealers based on any other allocation system, program, policy, or criteria, except for those allocated in new sub-subdivision g, and be filled from the entire allocation of all new motor vehicles that has been designated for distribution in the state.

    Amends GS 20-305(14)’s requirement that any sales objectives which a manufacturer, factory branch, distributor, or distributor branch establishes for any of its franchised dealers in this State must be reasonable, and every manufacturer, factory branch, distributor, or distributor branch must allocate its products within this State in a manner that, in addition to other listed requirements, also discloses to all of its franchised dealers handling the same line-make both its system of allocation and the actual new vehicle allocation that occurred during the previous calendar month and during the previous calendar months, including, but not limited to: a complete breakdown by model, color, equipment, and other items or terms; a concise listing of same line-make dealerships broken down by same line-make dealers within each dealer's area of responsibility, district, region, and the State; and an explanation of the derivation of the allocation system, including its mathematical formula or formulae, in a clear and comprehensible form. The data provided by the manufacturer or distributor is required to reflect all new vehicles allocated to its franchised dealers in this State pursuant to a mathematical formula or on a discretionary basis. All of the allocation data that a manufacturer or distributor is required to provide to each of its same line-make dealers in this State pursuant to this sub-subdivision shall either be made available for its dealers to review online at their discretion or be provided to dealers regularly, at least on a quarterly basis, as well as promptly upon the email, online, or other written request of a dealer or in the event a manufacturer or distributor has changed its allocation formula, process, or policies. Exempts any model or series of vehicle for which a manufacturer or distributor has sold fewer than 1,000 units in this State within the previous 12 months from the minimum vehicle allocation rights of dealers under GS 20-305(14)(h) (was, GS 20-305(14)(g)). Makes organizational changes. 

    Section 5

    Deletes proposed amendments to GS 20-305(14a) that were in Section 5. Makes organizational changes to act to account for deleted section text.   

    Further amends GS 20-305 by making it illegal for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any of those entity’s representatives to use economic coercion (as defined) to influence a dealer to participate in or comply with any program or policy sponsored, endorsed, or supported by the manufacturer or distributor, in order to sell any model, type, or series of vehicle or other products or services (prior version did not have “in order”), in addition to other listed prohibited conduct. Now specifies that for purposes of GS Chapter 20 the terms economic coercion, coerce, and attempt to coerce include the manufacturer's or distributor's use of rebates, credits, incentive payments, or other consideration that has the effect of causing a variance in the price of new motor vehicles offered to its franchised dealers located in the State or that offers participating or compliant dealers the ability to sell or receive any model, type, or series of vehicle or other products or services offered by or through the manufacturer or distributor (previously, just applied to the subdivision).

    Section 6

    Amends GS 20-286 by adding to the definitions that apply in Article 12, Motor Vehicle Dealers and Manufacturers Licensing Law, of GS Chapter 20, the term sell or selling, to specify that it applies to retail customers and transactions. Makes technical changes.

    Section 7

    Amends GS 20-305(58) by replacing references to "end user" with "retail customer." Amends GS 20-305(59) by adding requirement that the specified illegal sales to an end user occur within a five-year period subsequent to the sale or lease of the vehicle to the retail customer.   

    Amends GS 20-305.2 by changing references to the end user to the retail customer. Now permits the manufacturer or distributor to, on the same terms offered to the dealer, also sell to the retail customer or activate for a fee a permanent or temporary motor vehicle accessory, option, add-on, feature, improvement, or upgrade for a motor vehicle of a line-make manufactured, imported, or distributed by the manufacturer or distributor (was just imported or distributed by the manufacturer). Makes conforming changes to also refer to the distributor in reference to the manufacturer’s obligations to certain dealers. Makes technical change. Specifies that when providing a new motor vehicle to a dealer for offer or sale to the public, it is unlawful for the manufacturer or distributor to fail to provide to the dealer a written disclosure that may be provided to a potential buyer of the new motor vehicle of each accessory or function of the vehicle that may be initiated, updated, changed, or maintained by the manufacturer or distributor through over the air or remote means, and the charge to the customer for initiation, update, change, or maintenance. Specifies that a manufacturer or distributor may comply with this subdivision by notifying the dealer that the information is available  on a website or by other digital means.

    Section 8

    Amends GS 20-305.1, which allows the retail rate a motor vehicle dealer customarily charges for parts and labor to be established at the dealer’s election by submitting to the manufacturer or distributor 100 sequential non-warranty customer-paid service repair orders containing warranty-like parts, or 60 consecutive days of non-warranty customer-paid service repair orders which contain warranty-like parts, whichever is less, covering repairs made no more than 180 days before the submission and declaring the average percentage markup. Amends the presumption related to the average of the parts makeup rate and the average labor rates, so that they are now both presumed to be accurate (was, reasonable). Now specifies that the presumption can be rebutted by reasonably substantiating that that the rate requested is either: (1) not supported by the submission and by declaring the accurate rate based upon the submission repair orders or (2) fraudulent.  Now provides that if the manufacturer or distributor believes the dealer's submission is fraudulent, the manufacturer or distributor may file a protest with the Commissioner not later than 30 days following the dealer's rejection of the rebuttal rate.  Makes conforming changes.

    Section 9

    Amends GS 20-305(30) to extend the period for manufacturers operating a program as of October 1, 1999, that varied the price charged to its franchised dealers in this State in a manner that would violate this subdivision, or had in effect a documented policy that had been conveyed to its franchised dealers in this State and that varied the price charged to its franchised dealers in this State in a manner that would violate this subdivision, it is lawful for that program or policy, including amendments to that program or policy that are consistent with the  purpose and provisions of the existing program or policy, or a program or  policy similar thereto implemented after October 1, 1999, to continue in effect as to the manufacturer's franchised dealers located in this State from June 30, 2025 to June 30, 2028.  Similarly extends the period for manufacturers operating as of June 30, 2001, from June 30, 2025, to June 30, 2028.


  • Summary date: Mar 22 2023 - View Summary

    Identical to S 356, filed 3/22/23.

    Section 1

    Amends GS 20-305, which lists certain conduct that is unlawful for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any representative whatsoever of any of them (collectively, a “person”), as follows.  Reorganizes GS 20-305(53) into two subparts: subpart (a), which pertains to certain unlawful acts if a motor vehicle dealer with franchised dealers in the State and it permits a retail customer to reserve or request to purchase or lease a vehicle directly from the manufacturer and new subparts (b)-(d), as follows.

    GS 20-305(53)(b) specifies that it is unlawful for a person to fail or refuse to allow consumers located in this State the ability to directly purchase from any of its franchised dealers in this State, either at the dealer's dealership or online, all makes and models of new vehicles the dealer is authorized to sell. It also makes it unlawful for a person to fail or refuse to give equal reference and prominence on any website owned, operated, or controlled by the manufacturer or distributor on which consumers are permitted to order, purchase, or lease vehicles, to all of the manufacturer's or distributor's franchised dealers that are located in this State. Finally, it is unlawful for a person to fail or refuse to require that all of the new vehicles manufactured or distributed by the manufacturer or distributor that are sold or leased to purchasers or lessees located in this State be physically delivered to the ultimate purchaser or lessee by the same line-make franchised dealer selected by the purchaser or lessee, or in the absence of such selection, by the same line-make dealer from whom the vehicle was purchased or leased, or by the same line-make dealer that is located in closest proximity to the purchaser or lessee.

    GS 20-305(53)(c) specifies that it is unlawful for a person to fail or refuse to allow all of its franchised dealers located in the State to do any of the following six things: (1) have the ability to maintain on the ground and in the dealer's stock a reasonable supply of all makes and models of new vehicles the dealer is authorized to sell (only applies when material shortages not caused by acts beyond the control of the manufacturer or distributor); (2) have the right to store new and used batteries at a safe and secure location selected by the dealer that is separate from the dealership premises, fail or refuse to compensate dealers for the full cost of storing used batteries more than 30 days after the manufacturer or distributor has been notified by the dealer of their availability to be picked up, or fail or refuse to compensate and indemnify dealers for all loss and damage caused by vehicle batteries supplied by or through the manufacturer or distributor; (3) have the same opportunity to purchase used vehicle inventory distributed or made available by that manufacturer or distributor without imposing any additional conditions or requirements on their dealers; (4) have the opportunity to order from or through the manufacturer or distributor, receive, and maintain in stock a reasonable supply of parts required for service and repair of the manufacturer's or distributor's vehicles based on the volume of service work performed by the dealer; (5) have the right to independently determine the types of physical and digital advertising media the dealer chooses to advertise, including content and format, so long as it does not interfere with intellectual property rights of manufacturers and distributers; and (6) have the ability to use any digital platform or digital retailing tool selected by the dealer as long as it is capable of performing the essential functions required by the manufacturer or distributor.

    GS 20-305(53)(d) makes it unlawful for a person to engage in any of the following five things pertaining to the sale and negotiation of all motor vehicles in the State: (1) maintain a website or other electronic or digital means of communication for negotiating prices or other binding terms of sale of new vehicles directly between the manufacturer or distributor and end users located in this State, including, but not limited to, agreements between the manufacturer or distributor and the end user on prices or other substantive terms of sale or leasing of new vehicles; (2) retain ownership of new motor vehicles until they are sold to end users located in this State; (3) consign new motor vehicles to its franchised dealers in this State for dealer inventory or for sale to end users located in this State; (4) reserve the right to negotiate binding terms of sale directly with buyers of new motor vehicles located in this State; (5) designate its franchised dealers in this State to be only delivery agents for new motor vehicles and service and parts outlets, reserving for the respective manufacturer or distributor the right to establish the binding terms of vehicle sales or the right to negotiate the binding terms of sale directly with end users located in this State.

    GS 20-305(53)(d) also makes it unlawful for a person to unreasonably impede or interfere with the ability of its rural and other franchised dealers located in the State to obtain from that manufacturer or distributor and sell or lease any series or models of technologically advanced vehicles (TAV) that the manufacturer or distributor makes available for sale or lease in this State by or through its same line-make dealers. Defines TAV and electronic vehicle (EV). Sets forth three non-exhaustive instances of what "unreasonably impede or interfere with" includes.  

    GS 20-305(53)(e) makes it unlawful to withhold all or any portion of any incentive payment from any of its dealers located in this State on the basis of a dealer's failure to comply with any condition or requirement that is unlawful, prohibited, contrary, or inconsistent with any of the provisions of GS 20-305(53).

    Specifies that the provisions of GS 20-305(53) clarifying the subsection does not require manufacturers or distributors to do certain things only applies to GS 20-305(53)(a).

    Makes organizational changes.

    Amends GS 20-305(44), to add new subsection GS 20-305(44)b, which makes it unlawful for a person to require, coerce, or attempt to coerce any new motor vehicle dealer located in this State to refrain from using all or part of the name of a dealer's founder, owner, existing trade name, or dealer principal in the dealer's trade name. Makes organizational changes.

    Enacts GS 20-305(55) which makes it unlawful for a person to interfere with the independence and governance of a dealer or dealer applicant having multiple owners by requiring, coercing, or attempting to coerce the dealer or dealer applicant to enact specified measures that would alter its governance, facilities, and finances.

    Section 2

    Further amends GS 20-305, as amended by the act, to enact GS 20-305(56), which sets forth conduct that constitutes the unreasonable interference of the establishment, maintenance, operation, or control of either a single location dealer website or dealer group website. Defines both single location dealer website and dealer group website. Specifies that unreasonable interferences includes but is not limited to any contractual prohibition or any policy or any bonus or incentive program created or sponsored by a manufacturer or distributor that includes six non-exhaustive instances.

    Section 3

    Amends GS 20-305.2 by making it illegal for a manufacturer or distributor that has any franchised dealers in this State to sell, lease, or otherwise distribute one or more models, brands, or series of motor vehicles in this State that are solely or primarily electric or hydrogen vehicles or that use technology not available for purchase by all of its in-state franchised dealers. Specifies that it is not a violation if the manufacturer or distributor: (1) makes a reasonable quantity of vehicles using the same electric, hydrogen, or other new technology available on some models, brands, or series of vehicles available for all of its existing franchised dealers located within this State to purchase at no additional charge other than the minimum costs necessary for these dealers to sell and service the electric, hydrogen, or other new technology vehicles or (2) is selling, leasing, or otherwise distributing new electric, hydrogen, or other new technology vehicles in this State as part of a trial or introductory program where fewer than 2,000 of the vehicles are sold, leased, or distributed in this State during any 12-month period. Requires the denial of any new or renewal application for a manufacturer or distributor license or revocation of a previously issued license for violations of this provision.

    Section 4

    Amends GS 20-305(14), which makes it illegal for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or representatives of these entities, to delay, refuse, or fail to deliver motor vehicles or motor vehicle parts or accessories in reasonable quantities relative to the new motor vehicle dealer's facilities and sales potential in the new motor vehicle dealer's market area, or within a reasonable time, after receipt of a bona fide sold retail customer order (was, order) from a dealer that has a franchise for the retail sale of any new motor vehicle sold or distributed by the manufacturer or distributor, any new vehicle, parts or accessories to new vehicles as are covered by such franchise, and such vehicles, parts or accessories as are publicly advertised as being available or actually being delivered. Adds the requirement that the manufacturer or distributor fill each bona fide retail customer order from one of its in-state franchised dealers in the chronological sequence in which the order is received without regard for or consideration of the dealer’s previously earned allocation of vehicles. Requires the orders to be filled before the manufacturer or distributor allocates vehicles that are similarly configured and have similar options to dealers based on any other allocation system, program, policy, or criteria, except for those allocated in new sub-subdivision g, and be filled from the entire allocation of all new motor vehicles that has been designated for distribution in the state. Adds the following new requirements for the allocation of products by a manufacturer, factory branch, distributor, or distributor branch. New sub-subdivision b1 requires vehicles to be allocated to each of its dealers that are configured in a way that includes options that take into consideration the dealer’s historical experience and success in selling vehicles that are similarly configured and have similar options. New sub-subdivision g provides that if, during the immediately preceding 12 calendar months, a new motor vehicle dealer in the state sold 250 or fewer new vehicles manufactured or distributed by a particular manufacturer or distributor, that manufacturer or distributor must timely allocate and deliver to the dealer monthly and on a model-by-model or series basis, no fewer than the number of new motor vehicles of each such model or series that dealer sold at retail during the immediately previous calendar month, capped at 20 vehicles per month of any given model. Sets out requirements for filling the dealer's minimum vehicle allocation rights. Adds that if there are temporary shortages caused by factors and events beyond the manufacturer’s control, manufacturers or distributors are required to allocate and distribute all available new motor vehicles to its franchised dealers in the state according to the allocation priorities and in a fair, equitable, and nondiscriminatory manner.

    Section 5

    Further amends GS 20-305 by making it illegal for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any of those entity’s representatives to establish a motor vehicle allocation or distribution system or implement a system of allocation or distribution of motor vehicles to one or more of its franchised motor vehicle dealers which reduces or alters allocations or supplies of new motor vehicles to the dealer to achieve a purpose prohibited by this Article; or which reserves a specific motor vehicle for a specifically named person; or which requires or incentivizes motor vehicle dealers to sell or lease, or to negotiate the sale or lease of, a specific motor vehicle to a specifically named person; or which requires or incentivizes motor vehicle dealers to sell or lease a motor vehicle at a specified price or profit margin; or which otherwise is unfair (as defined), inequitable, unreasonably discriminatory, or not supportable by reason and good cause. Sets out related record keeping requirements.

    Section 6

    Further amends GS 20-305 by making it illegal for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any of those entity’s representatives to use economic coercion (as defined) to influence a dealer to participate in or comply with any program or policy sponsored, endorsed, or supported by the manufacturer or distributor, to sell any model, type, or series of vehicle or other products or services, or to take or refuse to take any action or to engage in or refuse to engage in any conduct. Entitles each of the manufacturer's or distributor's in-state franchised dealers to the maximum rebate, credit, incentive payment, or other consideration the manufacturer or distributor is offering under its program or policy, or to sell or receive any model, type, or series of vehicle or other products or services offered by or through the manufacturer or distributor, whether or not the dealer has complied with any or all of the conditions or requirements of the manufacturer's program or policy. Specifies that this does not prohibit a manufacturer or distributor from establishing for each dealer reasonable requirements for training, facilities, parts, and equipment necessary to sell and service any model, type, or series of vehicle or other products or services offered by or through the manufacturer or distributor, if the requirements take into consideration that dealer's reasonably anticipated sales volumes of these products or services over the following three-year period.

    Section 7

    Amends GS 20-286 by adding to the definitions that apply in Article 12, Motor Vehicle Dealers and Manufacturers Licensing Law, of GS Chapter 20 the term sell or selling, which is defined as: taking deposits or receiving payment for the purchase, lease, exchange, subscription, or use of a motor vehicle; accepting a reservation for a specific motor vehicle identified by Vehicle Identification Number or other product identifier from a retail consumer; setting the retail price for the purchase, lease, or exchange of a motor vehicle; offering or negotiating terms for the purchase, lease, finance, or exchange of a motor vehicle with a retail consumer; negotiating directly with a retail consumer the value of a motor vehicle being traded in as part of the purchase, lease, exchange, subscription, or use of a motor vehicle; offering or negotiating directly with a retail consumer any service contract, extended warranty, vehicle maintenance contract, guaranteed asset protection agreement, or any other vehicle-related products and services in connection with the purchase, lease, or exchange of a motor vehicle; any transaction where the title of a motor vehicle or a used motor vehicle is transferred to a retail consumer; and also any retail lease transaction where a retail customer leases a vehicle for a period of at least 12 months. Specifies that the following terms are synonymous: "sell," "selling," "sold," "exchange," "retail sales," "selling activities," and "leases."

    Section 8

    Further amends GS 20-305 by making it illegal for any manufacturer, factory branch, distributor, or distributor branch, or any field representative, officer, agent, or any of those entity’s representatives to (1) engage in this State in any of the activities of a motor vehicle dealer, except as expressly permitted by GS 20-305.2 (unfair methods of competition; protection of car-buying public), or to compete with any of its same line-make dealers in this State with respect to the sale of any products or services that the dealer is authorized to sell pursuant to its franchise, by the manufacturer's or distributor's remote electronic transmission to the end user of any motor vehicle accessory, option, add-on, feature, improvement, or upgrade and (2) sell or lease any motor vehicle of a line-make for which it has any in-state franchised dealers directly to an in-state end user or to activate for a fee any vehicle accessory, option, add-on, feature, improvement, or upgrade, on or to any vehicle owned or leased by an in-state end user, in a manner other than through a same line-make dealer.

    Amends GS 20-305.2 by adding that if the new motor vehicle dealers of the line-make located in this State are allowed to sell end users the same motor vehicle accessory, option, add-on, feature,  improvement, or upgrade for a motor vehicle of the line-make manufactured, imported, or distributed by the manufacturer or distributor, then a manufacturer or distributor may, on the same terms offered to the dealer, also sell to the end user or activate for a fee a motor vehicle accessory, option, add-on, feature, improvement, or upgrade for a motor vehicle of a line-make manufactured, imported, or distributed by the manufacturer. Sets out conditions under which the manufacturer must pay the franchised new motor vehicle dealer at least 25% of the gross revenue received by the manufacturer agent or common entity for the sale or activation.

    Section 9

    Amends GS 20-305.1, which allows the retail rate a motor vehicle dealer customarily charges for parts and labor to be established at the dealer’s election by submitting to the manufacturer or distributor 100 sequential non-warranty customer-paid service repair orders containing warranty-like parts, or 60 consecutive days of non-warranty customer-paid service repair orders which contain warranty-like parts, whichever is less, covering repairs made no more than 180 days before the submission and declaring the average percentage markup. Amends the presumption related to the average of the parts makeup rate and the average labor rates, so that they are now both presumed to be accurate (was, reasonable). Makes changes to the way in which the presumption can be rebutted by the manufacturer or dealer. Removes the provision requiring the manufacturer or dealer, if the declared rate is rebutted, to propose an adjustment within the specified time frame. Under current law, a dealer that does not agree with the proposed average percentage markup may file a protest and a hearing must be held. Places upon the manufacturer or distributor the burden of proving at the hearing that the rate declared by the dealer was inaccurate (was, unreasonable) and that the proposed adjustment of the average percentage markup is correct (was, reasonable). Excludes work on transmission assemblies from the calculation of the retail rate customarily charged by the dealer for parts and labor.

    Section 10

    Includes a severability clause.