Bill Text: NY S05085 | 2023-2024 | General Assembly | Amended


Bill Title: Requires motor vehicle dealer franchisors to fully compensate franchised motor vehicle dealers for warranty service agreements.

Spectrum: Slight Partisan Bill (Democrat 30-10)

Status: (Introduced) 2024-04-03 - SUBSTITUTED BY A4066B [S05085 Detail]

Download: New_York-2023-S05085-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         5085--C

                               2023-2024 Regular Sessions

                    IN SENATE

                                    February 22, 2023
                                       ___________

        Introduced by Sens. KENNEDY, ADDABBO, BAILEY, BRISPORT, BROUK, CANZONER-
          I-FITZPATRICK,  CHU,  COMRIE,  COONEY,  FERNANDEZ, GONZALEZ, HARCKHAM,
          HINCHEY, JACKSON, LANZA, MANNION,  MARTINEZ,  MARTINS,  MATTERA,  MAY,
          MAYER,  MURRAY,  MYRIE,  OBERACKER,  PALUMBO,  RAMOS, RIVERA, SALAZAR,
          SCARCELLA-SPANTON, SKOUFIS, STAVISKY, WEBB, WEIK  --  read  twice  and
          ordered  printed, and when printed to be committed to the Committee on
          Transportation  --  committee  discharged,   bill   amended,   ordered
          reprinted  as  amended  and  recommitted to said committee -- reported
          favorably from said  committee  and  committed  to  the  Committee  on
          Finance  --  committee  discharged, bill amended, ordered reprinted as
          amended and recommitted  to  said  committee  --  recommitted  to  the
          Committee  on  Transportation in accordance with Senate Rule 6, sec. 8
          -- committee discharged, bill amended, ordered  reprinted  as  amended
          and recommitted to said committee

        AN  ACT  to  amend the vehicle and traffic law, in relation to requiring
          motor vehicle dealer franchisors to fully compensate franchised  motor
          vehicle dealers for warranty service agreements

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Subdivision 1 of section 465 of  the  vehicle  and  traffic
     2  law, as amended by chapter 26 of the laws of 2014, is amended to read as
     3  follows:
     4    1.  Every  franchisor  shall  properly  fulfill any warranty agreement
     5  and/or franchisor's service contract, including but not limited  to  all
     6  warranty   repairs,   extended  warranty  repairs,  factory  compensated
     7  repairs, recalls,  diagnostics,  parts  and  other  voluntary  stop-sell
     8  repairs, and shall compensate each of its franchised motor vehicle deal-
     9  ers  for  all warranty [parts and labor], recall, diagnostic labor oper-
    10  ations and parts where applicable in amounts  which  reflect  reasonable
    11  compensation  for  such  work.  For purposes of this section, reasonable
    12  compensation shall be the reasonable labor time  allowances  defined  by

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02112-07-4

        S. 5085--C                          2

     1  the  retail  labor  time guide reasonably utilized by a franchised motor
     2  vehicle dealer for non-warranty  customer  paid  labor  operations.  All
     3  warranty claims and/or claims under a franchisor's service contract made
     4  by  franchised  motor  vehicle  dealers shall be paid within thirty days
     5  following their approval. For diagnosis work, parts reimbursement, other
     6  than components, systems, fixtures, appliances, furnishings, accessories
     7  and features of a house coach that are  designed,  used  and  maintained
     8  primarily   for   nonvehicular   residential  purposes,  and  for  labor
     9  reimbursement, reasonable compensation shall not be less than the  price
    10  and  rate  charged  by  the  franchised  motor  vehicle  dealer for like
    11  services to non-warranty and/or non-service  contract  customers.    For
    12  purposes  of  this section, the price and rate charged by the franchised
    13  motor vehicle dealer for parts may be established by submitting  to  the
    14  franchisor  one  hundred  sequential  nonwarranty  customer-paid service
    15  repair orders or the  number  of  sequential  nonwarranty  customer-paid
    16  service  repair  orders written within a ninety day period, whichever is
    17  less, covering repairs made no more than one hundred eighty days  before
    18  the  submission,  and  declaring  the  price and rate, including average
    19  markup for the franchised motor  vehicle  dealer  as  its  reimbursement
    20  rate.  The  reimbursement  rate  so declared shall go into effect thirty
    21  days following the declaration and shall be presumed to  be  reasonable,
    22  however  a  franchisor  may  rebut such presumption by showing that such
    23  rate so established is unreasonable in light of  the  practices  of  all
    24  other franchised motor vehicle dealers in the vicinity offering the same
    25  line  make.  The  franchised  motor  vehicle  dealer shall not request a
    26  change in the reimbursement rate more often than once in  each  calendar
    27  year. In establishing the labor reimbursement rate, the franchisor shall
    28  not  require a franchised motor vehicle dealer to establish said rate by
    29  a methodology, or by requiring information, that is unduly burdensome or
    30  time consuming to provide, including, but not limited to, a  transaction
    31  by  transaction  calculation.  For  the  purposes  of  this section, the
    32  following parts or types of repairs shall be  excluded  from  the  parts
    33  and/or  labor  calculations  and the franchisor's reimbursement require-
    34  ments under this section: (a) parts sold at wholesale;  (b)  tires;  (c)
    35  routine  maintenance not covered under any retail customer warranty such
    36  as fluids, filters and belts not provided in the course of repairs;  (d)
    37  vehicle  reconditioning; and (e) batteries replaced as part of a routine
    38  maintenance operation. If the  franchisor  rejects  the  declaration  or
    39  attempts  to  rebut  the declaration because of an error in the dealer's
    40  submission, the franchisor shall identify with  specificity  the  reason
    41  for rejection and identify the error or errors within the submission. In
    42  the event the franchisor rejects or rebuts the dealer's initial declara-
    43  tion, the dealer shall have the opportunity, within sixty days to resub-
    44  mit  the  full and corrected declaration addressing the alleged error or
    45  errors identified by the franchisor. The franchisor shall respond within
    46  sixty days. The one hundred eighty day requirement for the repair orders
    47  shall be stayed from the date of initial submission. In  any  action  or
    48  proceeding  held pursuant to this subdivision, the franchisor shall have
    49  the burden of proving that the rate declared by the dealer was unreason-
    50  able as described in this subdivision and that the  proposed  adjustment
    51  of  the  average  percentage  markup  or  rejection of the submission is
    52  reasonable pursuant to the provisions of this subdivision.   A  warranty
    53  claim timely made shall not be deemed invalid solely because unavailable
    54  parts cause additional use and mileage on the vehicle.
    55    § 2. This act shall take effect immediately.
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