It is enacted by the General Assembly as follows:

SECTION 1. Section 31-5.1-6 of the General Laws in Chapter 31-5.1 entitled "Regulation of Business Practices Among Motor Vehicle Manufacturers, Distributors and Dealers" is hereby amended to read as follows:

{ADD 31-5.1-6. Warranty agreement. -- ADD} {ADD (A) ADD} Every manufacturer shall properly fulfill any warranty agreement and adequately and fairly compensate each of its motor vehicle dealers for labor and parts. In no event shall that compensation fail to include reasonable compensation for diagnostic work, as well as repair service and labor. All claims made by motor vehicle dealers hereunder for labor and parts shall be paid {DEL within thirty (30) days following their approval. All of those claims shall be either approved or disapproved within thirty (30) days after their receipt, and when any claim is disapproved the motor vehicle dealer who submits it shall be notified in writing of its disapproval within that period, and each notice shall state the specific grounds upon which the disapproval is based DEL} {ADD in accordance with the provisions of subsection B hereof ADD} . Any delay in payment after approval or disapproval that is caused by conditions beyond the reasonable control of the manufacturer shall not constitute a violation of this section. Reimbursement for warranty repairs or diagnostic work shall be at the dealer retail rate in effect at the time the warranty repair or diagnostic work is performed.

{ADD (B) A claim filed under this section by a dealer with a manufacturer or distributor shall be:

(1) In the manner and form prescribed by the manufacturer or distributor; and

(2) Approved or disapproved within thirty (30) days of receipt.

(i) A claim not approved or disapproved within thirty (30) days of receipt shall be deemed approved.

(ii) Payment of or credit issued on a claim filed under this section shall be made within thirty (30) days of approval.

(3) If a claim filed under this section is shown by the manufacturer or distributor to be false or unsubstantiated, the manufacturer or distributor may charge back the claim within twelve (12) months from the date the claim was paid or credit issued.

(i) This paragraph does not limit the right of a manufacturer or distributor to charge back for any claim that is proven to be fraudulent. ADD}

SECTION 2. 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:

{ADD 31-5.1-21. Promotional activities. -- ADD} {ADD (A) Upon filing of a claim, a manufacturer, factory branch, or distributor shall compensate a dealer for any incentive or reimbursement program sponsored by the manufacturer, factory branch, or distributor, under the terms of which the dealer is eligible for compensation.

(B)(1) A claim filed under this section shall be:

(i) In the manner and form prescribed by the manufacturer, factory branch, or distributor; and

(ii) Approved or disapproved within thirty (30) days of receipt.

(2) A claim not approved or disapproved within thirty (30) days of receipt shall be deemed approved.

(3) Payment of a claim filed under this section shall be made within thirty (30) days of approval

(C)(1) If a claim filed under this section is shown by the manufacturer, factory branch, or distributor to be false or unsubstantiated, the manufacturer, factory branch, or distributor may charge back the claim within twenty four (24) months from the date the claim was paid or credit issued.

(2) This paragraph does not limit the right of a manufacturer, factory branch, or distributor to charge back for any claim that is proven fraudulent. ADD}

SECTION 3. This act shall take effect upon passage.