Introduced

This act prohibits certain entities from engaging in the business of selling motor vehicles, except as permitted by the MVFP Act, and specifies parties that shall have standing to enforce the prohibitions.

The act also modifies how motor vehicle franchisees are compensated for warranty and other factory compensated repairs. Warranty agreements shall be properly fulfilled, and franchisees shall be adequately and fairly compensated for labor and parts as described in the act. In no event shall compensation to a franchisee for labor time and rates be less than the times and rates charged by the franchisee to retail customers for non-warranty service and repairs. Franchisors shall reimburse franchisees for parts at the prevailing retail price charged by that franchisee. The act prohibits reduction in payments due to preestablished market norms or averages, and prohibits franchisors from establishing restrictions or limitations on repair frequency due to failure rate indexes or national failure averages.

The act specifies a timeline for claims and payments under the act, including with regard to appeals of disapproved claims. No debit reduction or charge-back shall be made on any item on a warranty repair order absent a finding of fraud or illegal actions by the franchisee. Franchisors shall not impose any form of cost recovery fees or surcharges against a franchisee for payments made in accordance with the act.

Timely warranty claims shall not be deemed invalid solely because unavailable parts cause additional use and mileage to the vehicle. If a franchisor imposes a recall or stop sale on any new vehicle in a franchisee's inventory which prevents sale of the vehicle, the franchisor shall compensate the franchisee for any interest and storage until the vehicle is repaired and made ready for sale.

Franchisors shall not restrict the nature or extent of services to be rendered or parts to be provided so as to prevent the franchisee from satisfying the warranty by rendering services in a good and workmanlike manner and providing parts that are required in accordance with generally accepted standards.

Franchisors' obligations under the act shall also apply to entities affiliated with the franchisor, as described in the act, if a warranty or service repair plan is issued by that entity instead of or in addition to one issued by the franchisor.

Under the act, a franchisee shall not request a franchisor to approve a different labor or parts rate more than once per calendar year, rather than more than twice per calendar year.

ERIC VANDER WEERD