SB 96

Under current law, each manufacturer, importer, distributor, and dealer of

motor vehicles that wishes to sell motor vehicles in this state must be licensed by the

Department of Transportation (DOT). The manufacturer, importer, or distributor

may have its license revoked and may be liable for pecuniary losses and attorney fees

incurred by the dealer, if the manufacturer, importer, or distributor takes certain

actions with respect to a dealer that have been enumerated as violations.

This bill enumerates several additional actions of a manufacturer, importer, or

distributor with respect to a dealer as violations. These newly designated violations

are: 1) conditioning certain agreements or approvals on the dealer's entry into a

contract that allows the manufacturer, importer, or distributor to control the

disposition or use of the dealer's dealership facilities; 2) unreasonably conditioning

certain agreements or approvals on the dealer's improvement of the dealer's

dealership facilities at a substantial cost to the dealer; 3) unreasonably requiring a

dealer to maintain exclusive facilities for a particular line make of motor vehicles;

4) taking certain adverse actions against a dealer for charging a lawful service fee

to a retail customer; 5) taking certain adverse actions against a dealer because,

without the dealer's knowledge that the purchaser intended to export the motor

vehicle, a motor vehicle purchaser exported a motor vehicle; 6) with certain

exceptions, requiring a dealer to provide the manufacturer, importer, or distributor

with information regarding the dealer's retail customers; 7) transferring nonpublic

customer information obtained from a dealer to another dealer or otherwise using

nonpublic customer information obtained from a dealer for a nonpermitted use; and

8) failing to properly indemnify a dealer.

Under current law, a manufacturer, importer, or distributor must reasonably

compensate a dealer that performs certain motor vehicle service work for the

manufacturer, importer, or distributor. Covered service work is work to rectify

product defects or other defects covered by the warranty provided by the

manufacturer, importer, or distributor, certain motor vehicle delivery or preparation

obligations, and any other work approved by the manufacturer, importer, or

distributor. The manufacturer, importer, or distributor must compensate the dealer,

for service, at the effective labor rate charged to all customers and, for parts,

generally at not less than the amount the dealer charges other retail service

customers for the parts. To be eligible for compensation, a dealer must notify the

manufacturer, importer, or distributor of the amount that the dealer charges other

retail service customers for parts. The manufacturer, importer, or distributor may

require the dealer to provide documentary substantiation of the claimed amount the

dealer charges for parts.

This bill requires a manufacturer, importer, or distributor to compensate a

dealer based on the dealer's "effective nonwarranty labor rate" and "average

percentage markup over dealer cost for parts." To be eligible for compensation, a