| Chapter 471 |
| 2017 -- S 0759 SUBSTITUTE A Enacted 10/11/2017 |
| A N A C T |
| RELATING TO MOTOR AND OTHER VEHICLES -- REGULATIONS OF BUSINESS PRACTICES AMONG MOTOR VEHICLE MANUFACTURERS, DISTRIBUTORS, AND DEALERS |
| Introduced By: Senators Lombardo, Archambault, Lombardi, and McCaffrey |
| Date Introduced: April 12, 2017 |
| It is enacted by the General Assembly as follows: |
| SECTION 1. Chapter 31-5.1 of the General Laws entitled "Regulation of Business |
| Practices Among Motor Vehicle Manufacturers, Distributors, and Dealers" is hereby amended by |
| adding thereto the following section: |
| 31-5.1-6.1. Obligations during recalls. |
| (a) A manufacturer shall compensate its new motor vehicle dealers for all labor and parts |
| required by the manufacturer to perform recall repairs. Compensation for recall repairs shall be at |
| the dealer retail rate in effect at the time the recall repair work is performed. The dealer retail rate |
| for parts and labor shall be at the same rates as those provided for under §31-5.1-6. If parts or a |
| remedy are not reasonably available to perform a recall service or repair on a used vehicle held |
| for sale by the dealer authorized to sell new vehicles of the same line-make within thirty (30) |
| days of the manufacturer issuing the initial notice of recall and the manufacturer has issued a |
| "Stop-Sale", or "Do-Not-Drive", order on the vehicle, the manufacturer shall compensate the |
| dealer at a rate of at least one and one-half percent (1.5%) of the value of the vehicle per month, |
| or portion of a month, while the recall or remedy parts are unavailable and the "Stop-Sale", or |
| "Do-Not-Drive", order remains in effect. A "Stop-Sale" shall be defined as a notification issued |
| by a vehicle manufacturer to its franchised dealerships stating that certain used vehicles in |
| inventory shall not be sold or leased, at retail and/or wholesale, due to a federal safety recall for a |
| defect or a noncompliance, or a federal or California emissions recall. |
| (b) The value of a used vehicle shall be the average trade-in value for used vehicles as |
| indicated in an independent, third-party guide for the year, make, model, and mileage of the |
| recalled vehicle on the later of: |
| (1) The date the "Stop-Sale" or "Do-Not-Drive" order was issued; or |
| (2) The date the vehicle is taken in the used motor vehicle inventory. |
| (c) This section shall apply only to used vehicles subject to safety or emissions recalls |
| pursuant to and recalled in accordance with federal law and regulations adopted thereunder and |
| where a "Stop-Sale", or "Do-Not-Drive", order has been issued; provided, further, that this |
| section shall apply only to new motor vehicle dealers holding used vehicles for sale that are a |
| line-make that the dealer is franchised to sell or on which the dealer is authorized to perform |
| recall repairs. This section further shall apply only to new motor vehicle dealers holding an |
| affected used motor vehicle for sale that was: |
| (1) In inventory at the time the "Stop-Sale" or "Do-Not-Drive" order was issued; |
| (2) Taken in the used motor vehicle inventory of the new motor vehicle dealer as a |
| consumer trade-in incident to the purchase of a new motor vehicle before or after the "Stop-Sale" |
| or "Do-Not-Drive" order was issued; or |
| (3) Properly taken in the used motor vehicle inventory of the new motor vehicle dealer as |
| a lease return vehicle returned to the new motor vehicle dealer before or after the "Stop-Sale" or |
| "Do-Not-Drive" order was issued in accordance with the terms of the applicable contract. |
| (d) It shall be a violation of this section for a manufacturer to reduce the amount of |
| compensation otherwise owed to a new motor vehicle dealer, whether through a chargeback,; |
| removal from an incentive program,; reduction in amount owed under an incentive program,; or |
| any other means, because the new motor vehicle dealer has submitted a claim for reimbursement |
| under this section, or was otherwise compensated for a vehicle subject to a recall where a "Stop- |
| Sale", or "Do-Not-Drive", order has been issued. |
| (e) All reimbursement claims made by new motor vehicle dealers pursuant to this section |
| for recall remedies or repairs, or for compensation where no part or repair is reasonably available |
| and the vehicle is subject to a "Stop-Sale", or "Do-Not-Drive", order, shall be subject to the same |
| limitations and requirements as a warranty reimbursement claim made under §31-5.1-6. Claims |
| shall be either approved or disapproved within thirty (30) days after they are submitted to the |
| manufacturer in the manner and on the forms the manufacturer reasonably prescribes. All claims |
| shall be paid within thirty (30) days of approval of the claim by the manufacturer. Any claim not |
| specifically disapproved in writing within thirty (30) days after the manufacturer receives a |
| properly submitted claim shall be deemed to be approved. In the alternative, a manufacturer may |
| compensate its franchised dealers under a national recall compensation program provided the |
| compensation under the program is equal to or greater than that provided under subsection (a) of |
| this section or the manufacturer and dealer otherwise agree. |
| (f) Nothing in this section shall require a manufacturer to provide total compensation to a |
| new motor vehicle dealer which that would exceed the total average trade-in value of the affected |
| used motor vehicle as determined under §31-5.1-6.1(b) subsection (b) of this section. |
| (g) Any remedy provided to a dealer under this section is exclusive and may not be |
| combined with any other state recall compensation remedy. |
| SECTION 2. This act shall take effect upon passage. |
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| LC002421/SUB A/2 |
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