This Bill requires that franchised dealers performing warranty work on behalf of their manufacturer be compensated at commercial pay rates for any qualifying work completed.  This bill creates a petition process for dealers to request either a labor rate review,  a parts rate review, or a combined labor/parts rate review, annually.  If the review shows that the commercial pay rate exceeds the warranty reimbursement rate, the OEM must match the commercial pay rate, effective on the date of submission.  Note:  certain types of ordinary work is excluded from "qualifying warranty work" and the increase in rate is subject to a reasonableness standard.

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On average, this change has amounted to a per dealership uplift of $210,000 on parts and $110,000 on labor.  The overall average uplift is approximately $330,000 per dealership.

This comprehensive legislation helped redefine the dealer/manufacturer relationships in the following ways:

• Recall Reimbursement - if an OEM issues a stop sale on used vehicles subject to recall, they must reimburse dealer at 1.5%/month starting 30 days after order.

• Performance Standards - adoption of the Beck Chevrolet standard preventing use of unreasonable or unfair performance standards.

• Two-Tiered Pricing - OEM cannot sell a vehicle to a same line-make dealer at a lower price than any other dealer.  Incentive programs must be reasonably available to all.

• Facility Upgrades - If a dealer spends $250,000 on upgrades, an OEM must wait 10 years before demanding another upgrade.  Exception for new technologies, like EV or Autonomous.

• Rights of First Refusal - Prohibits OEM from exercising ROFR for a sale of dealership to immediate family member.  Preserves family ownership.

• Add Points/Relocation - OEM must provide 60 days notice, may not add or relocate within 10 miles from existing dealer, or in any location where dealer can show 25% market penetration.  Allows protest to Department of Revenue for violations.

• Termination Appeals - If Department of Revenue does not reply to a termination appeal within 60 days, allows dealer access to courts without awaiting a DOR decision.

Senate Bill 140 provides a safe harbor for dealers who, through no fault of their own, cannot procure title on a vehicle sale within the statutorily required 30 days.  If all requirements of this provision are met, the dealership is permitted to issue a second 60 day temporary permit to allow time for processing by the county or financing company to re-issue title.

House Bill 1296 increases the financial penalties on those individuals selling motor vehicles without a motor vehicle salesperson license.  It also directs 50% of the penalties to go to the Auto Dealer License Fund.