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.