2023 Legislation Highlights
By: Jeremiah M. Hawkes
Many states have completed their legislative sessions and there are a number of bills passed that affect automobile dealers. It has been a busy year for automobile dealer legislation. Bills dealing with electric vehicles, direct sales, warranty reimbursements, over-the-air updates and facility upgrades were a hot topic in many state houses. Some highlights are:
Arkansas- HB 1579 requires dealers be compensated for over the air repairs, adds allocation standards, requires disclosures for over the air upgrades.
Florida- HB 637 requires revenue sharing for over-the-air upgrades, updates allocation standards, prohibits sales using agency model, prohibits ownership of dealership by entity more than 30% owned by manufacturer, requires DHSMV to investigate complaints.
Montana- SB 411 updates Dealer Data provisions and standards, strengthens provisions prohibiting manufacturers from coercing dealers to use certain vendors, prohibits manufacturers from denying Dealers the right to participate in incentive programs, prohibits manufacturers from not suppling parts, prohibits direct sales, prohibits agency model, prohibits setting prices by manufacturer, requires 60 days notice for modifications to franchise agreement, gives dealer right to protest modification, prohibits manufacturer from owning dealerships, including subsidiary more than 25 % owned by manufacturer.
Oklahoma- SB 593 updates data privacy provisions, adds allocation standards, prevents direct sales, provides that dealers can sell over-the-air upgrades, provides a system for warranty reimbursements, allows for designated successors and provides that drivers insurance has primary responsibility if there is an accident involving a loaner vehicle.
Texas- HB 718 will eliminate paper temporary tags. Starting in July 2025, dealers will issue purchasers a set of permanent tags instead.
Utah- SB 90 requires an automobile franchisor to:
- provide a franchisee with certain written disclosures that may be provided to a potential buyer of the new motor vehicle; and
- provide reasonable compensation to a franchisee assisting a customer whose vehicle was subjected to an over the air or remote change, repair, or update;
- amends requirements for changes to a franchisee’s retail labor rate and retail parts markup;
HB 194 prohibits a motor vehicle dealer from charging a fee or charge in addition to the negotiated purchase price as a condition of the sale.
SB 172 allows a licensed vehicle dealer to sell and deliver a vehicle to a buyer at the buyer’s home or place of business.
Virginia- HB 1469 provides that the threat to withhold incentive payments is included in the existing prohibition on any manufacturer coercing a dealer into entering into an agreement. The bill prohibits manufacturers from taking certain listed actions related to direct contact with buyers or lessees. The bill prohibits any provisions of a franchise agreement authorizing a manufacturer to unilaterally amend the franchise agreement. The bill provides that the existing prohibition on a manufacturer owning a motor vehicle dealership includes any dealership of a new line-make established by a manufacturer or a company affiliated through ownership of the manufacturer of at least 25 percent of the equity. The bill provides that the existing requirement that manufacturers provide the cost of initiation, update, change, or maintenance of each accessory or function of the vehicle that may be initiated, updated, changed, or maintained by the manufacturer through over-the-air or remote means shall be the cost at the time of the new motor vehicle sale.