SB 0400 Revises motor vehicle franchise practices
LR Number:1583S.02P Fiscal Note:1583-02
Committee:Commerce and Environment
Last Action:04/12/01 - Voted Do Pass H Motor Vehicle & Traffic Regulations Journal page:
Effective Date:August 28, 2001
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Current Bill Summary

SB 400 - This act revises the automobile franchise statutes. Restrictions are placed on establishing or relocating a new motor vehicle dealer within the relevant market area where the same line make is already present. "Relevant market area" is defined as an area within a six mile radius of the intended site in counties with a population greater than 100,000 and within a ten mile radius in counties with a population less than 100,000. In proceedings before the Administrative Hearing Commission parties must file a responsive pleading within 30 days of the order fixing a date, time and place for hearing. The parties are permitted to engage in discovery pursuant to Missouri Supreme Court Rules. If franchisor actions require "good cause" those actions must be put on hold if the Administrative Hearing Commission determines good cause does not exist. The franchisee may seek enforcement of this decision in Circuit Court of Cole County.

The ability of the franchisor to request additional information and documents from a potential buyer or transferee of a dealership is clarified. This act also prohibits franchisors from requiring franchisees to cancel or refrain from acquiring a franchise in another line make of vehicle. Franchisors are also prohibited from refusing to sell franchisees every motor vehicle in a particular line make.

This act will prohibit franchisors from owning or operating new motor vehicle dealerships in this state except under certain circumstances. Franchisors are also prohibited from selling new motor vehicles directly to consumers in most circumstances. Recreational motor vehicle franchisors and franchisees are exempt from the prohibitions of owning dealerships and selling directly to consumers.

This act will require franchisors to provide their franchisees with specific information regarding warranty service, including a schedule of compensation for warranty service. Franchisors are required to compensate franchisees for warranty service and claims for labor and parts must be paid within 30 days after approval. Claims will be deemed approved if not specifically disapproved within 30 days after receipt by the franchisor. Approved claims may not be charged back unless the franchisor can prove the claim fraudulent or unsubstantiated. In any event charge backs may not occur more than two years after payment of the claim. Franchisees must also be compensated for franchisor-sponsored sales or service promotion events. Claims must be approved within 30 days and paid within 10 days after approval.

This act is similar to the TAT version of HB 575 (2001).