- Introduced -

SB 826 - This act makes several changes to the relationship of automobile dealers and manufacturers within the motor vehicle franchise law.

ADMINISTRATIVE PROCESS

Expands time limits for the process within the Administrative Hearing Commission (AHC). Setting a hearing date is now 30 days instead of 10, hearings are now within 180 days instead of 45, and continuances are now up to 90 days instead of 45. (407.822.1) The act places a hold on any franchisor action requiring "good cause" when the action is protested by a franchisee, and the administrative law judge determines that good cause does not exist. Appeals are provided for, and jurisdiction is Cole County.

This act also requires that new cases filed to enforce an administrative finding in circuit court be held in abeyance if the underlying judgment is on appeal. (407.822.2)

CONTRACTUAL ISSUES

This act establishes protections for a dealer's relevant market area (RMA). RMA is defined as either a 12 or 20 mile radius depending on whether the population of the county is over or under 300,000. Any dealer can follow an administrative complaint process when the factory wants to establish or move another dealership within his or her area. (407.817) The AHC uses a list of factors to weigh the benefits of the proposed dealership. The AHC must find 7 of the 10 factors in favor of adding a dealership before it can approve.

This act also requires the manufacturer to compensate the dealership parts used in preparation or in warranty defects within 30 days. (407.825.1(17)) Audits by manufacturers for warranty compensation shall not be done more than 12 months after a claim. (407.825.1(18)) This act also clarifies, in section 407.822.4(2), that manufacturers must approve or deny the sale of a dealership within 60 days.

Manufacturers can only deny reimbursement for warranty work and incentives based on their written guidelines. (407.825.1(19)) Dealers may not be restricted from selling multiple line-makes of cars, and may not be required to be exclusive to selling one brand. This is also known as "dualing" and "exclusivity". (407.825.1(20))

ISSUES OUTSIDE OF CONTRACT

Section 407.923 prohibits, until otherwise prescribed in law, the ownership of a dealership by a manufacturer. Ownership would be currently allowed in two circumstances: temporary holding while the dealership is for sale; and assisting a person who is economically disadvantaged in buying a dealership. This section would also prohibit "factory financing", where a consumer borrows from a subsidiary of the manufacturer.

CHARLES HATCHER