Bill clarifying motor vehicle manufacturer/dealer agreements passes

Lawmakers passed a bill April 20 affecting agreements between motor vehicle manufacturers and dealers.

LB477, introduced by Valentine Sen. Deb Fischer, prohibits motor vehicle manufacturers from requiring new motor vehicle dealers in the state to:

• retain parts or accessories that were not obtained through a specific order and not sold within 12 months;
• maintain exclusive sales facilities or display space, personnel, service, parts or administrative facilities for a line-make, unless it is justified by reasonable business considerations; or
• enter into any agreement with a manufacturer, factory branch, distributor, distributor branch or one of its affiliates that gives site control of the dealer premise and does not terminate under certain conditions.

Manufacturers are required to compensate new dealers for warranty and recall obligations related to repair, service and installation. A dealer’s claim for warranty compensation may be denied only if:

• it is based on a nonwarranty repair;
• the dealer lacks documentation for the claim; or
• the dealer fails to comply with specific substantive evidence that the claim is intentionally false, fraudulent or misrepresented.

The bill prohibits franchisors from sharing or selling private customer information obtained by dealers unless agreed to by the originating dealers. Franchisors also may not prohibit a dealer from acquiring a line-make of new vehicles solely because the dealer owns another dealership of the same line-make in a contiguous market.

The bill passed 46-0.