HB 2410
Initials JB Page 1 Transportation & Infrastructure
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
HB 2410: motor vehicle dealers; franchises
Sponsor: Representative Cook, LD 7
Committee on Transportation & Infrastructure
Overview
Outlines an indemnification process for motor vehicle dealer franchisees against vehicle
manufacturers, importers, distributors, factory branches or franchisors and establishes
various other requirements and restrictions for vehicle manufacturers, importers,
distributors, factory branches or franchisors relating to motor vehicle dealers.
History
A manufacturer of new motor vehicles, factory branch, distributor, distributor branch, field
representative, officer or agent of these entities is prohibited from coercing or attempting to
coerce a new motor vehicle dealer to:
1) accept delivery of a new motor vehicle or vehicles, parts or accessories for the vehicle
or vehicles or any other commodities that the dealer has not ordered;
2) enter into an agreement with the manufacturer, factory branch, distributor or
distributor branch;
3) do any other act unfair to the dealer by threatening to cancel or not renew a franchise
existing between the manufacturer, factory branch, distributor or distributor branch;
4) construct, renovate or make substantial alterations to the dealer's facilities unless the
manufacturer, factory branch, distributor or distributor branch demonstrate that the
changes are reasonable and justifiable or unless the alteration is reasonably required
to effectively display and service a vehicle based on its technology;
5) enter a real property use or site control agreement as a condition of awarding a
franchise, adding a line-make or dealer agreement to an existing new motor vehicle
dealer, renewing a dealer agreement, approving the sale or transfer of the ownership
of a dealership or approving the relocation of a dealership; or
6) in connection with the sale of a used motor vehicle, other than a used vehicle sold
under a factory's certified pre-owned program, require the use of only parts and
accessories manufactured by the manufacturer, factory branch, distributor,
distributor branch or importer (A.R.S. § 28-4458).
A factory is prohibited from directly or indirectly competing with or unfairly discriminating
amongst its dealers. Statute outlines what consists of competition or unfair discrimination
(A.R.S. § 28-4460).
Provisions
Franchisee Indemnification
1. Prohibits a licensed manufacturer, importer, distributor, distributor branch, factory
branch or franchisor from directly or indirectly failing or refusing to indemnify an existing
or former franchisee or franchisee's successors if a franchisee demands indemnification.
(Sec. 1) HB 2410
Initials JB Page 2 Transportation & Infrastructure
2. Assigns any sustained damages, attorney fees and other expenses reasonably incurred by
a franchisee to a licensed manufacturer, importer, distributor, distributor branch, factory
branch or franchisor if the damages result from or relate to a claim made by a third party
against the franchisee that result from:
a) the condition, characteristic, manufacture, assembly or design of any vehicle, parts or
accessories, tools or equipment or the selection or combination of components or parts
that are manufactured or distributed by the manufacturer, importer, distributor,
distributor branch, factory branch or franchisor;
b) service systems, procedures or methods that the manufacturer, importer, distributor,
distributor branch, factory branch or franchisor recommends or requires the
franchisee to use if the franchisee properly used the system, procedure or method;
c) the improper use or disclosure by a manufacturer, importer, distributor, distributor
branch, factory branch or franchisor of nonpublic personal information obtained from
a franchisee relating to a consumer, customer or employee of the franchisee;
d) an act or omission of the manufacturer, importer, distributor, distributor branch,
factory branch or franchisor for which the franchisee would have a claim for
contribution or indemnity under law or the franchise, notwithstanding any prior
termination or expiration of the franchise; or
e) an act or omission of the franchisee that results from the franchisee's use of a service
provided by a digital vender preselected by the manufacturer, importer, distributor,
distributor branch, factory branch or franchisor if the use of the service violates state
or federal law. (Sec. 1)
Direct Current Fast Charging Stations
3. Prohibits a manufacturer of new motor vehicles, factory branch, distributor, distributor
branch, field representative, office or agent or any representative of these entities from
coercing or attempting to coerce a new motor vehicle dealer to install a direct current fast-
charging station (charging station) unless:
a) the manufacturer, factory branch, distributor or distributor branch requires public
access to the charging station and reimburses the dealer for one-half of all costs to
install and maintain the charging station and the dealer pays them one-half of the net
income that is generated by the charging station. This requirement does not apply to
a manufacturer, factory branch, distributor or distributor branch program or policy
that encourages a dealer to install public charging stations if the program or policy
reimburses the dealer for at least one-half the cost of all charging stations under the
program or policy;
b) the dealer is allowed to use all available incentives or utility rate plans or incentives
to minimize the total cost of installing the charging station;
c) the number and type of electric vehicle charging stations that are required to be
installed is reasonably necessary to conduct service and for sales operations; and
d) the requirements placed by the manufacturer, factory branch, distributor or
distributor branch are reasonable for the supply constraints, time constraints,
advancements in vehicular technology and electric grid integration. (Sec. 2)
Competition and Unfair Discrimination
4. Declares that a factory is competing with or discriminating against its dealers if the
factory implements or modifies a vehicle reservation system for the sale or lease of motor
vehicles unless:
a) the vehicle reservation system uses customer dealer selection or other objective
criteria to allocate the vehicles; and HB 2410
Initials JB Page 3 Transportation & Infrastructure
b) at least 30 days before implementing the vehicle reservation system a factory makes
available to its dealers a description of the reservation program rules and
requirements through the system. Notice of a change to the rules and requirements
must be provided by the factory to its dealers at least 30 days before the change
becomes effective. (Sec. 4)
5. Prohibits a factory from selling or offering to sell, lease or provide to any retail consumer
or lead a subscription service for a motor vehicle feature that uses components and
hardware that is already installed on the motor vehicle at the time of purchase or lease
and would function after activation without ongoing cost to or support by the dealer,
manufacturer, factory, distributor or third-party service provider. (Sec. 4)
6. Clarifies that the previous provision does not prohibit a factory from renewing or charging
any subscription or connection fees for any in-vehicle electronic wireless communication,
information or entertainment systems such as navigation system updates, satellite radio,
roadside assistance, software-dependent driver assistance or driver automation features
and vehicle-connected services that rely on cellular or other data networks for continued
operation. (Sec. 4)
Miscellaneous
7. Specifies that a manufacturer, importer or distributor cannot adopt, change, establish or
implement a plan or system for the allocation, scheduling or delivery of new motor
vehicles, parts or accessories to its motor vehicle dealers that is not fair, reasonable or
equitable to dealers of the manufacturer's, importer's or distributor's line-make. (Sec. 2)
8. Prohibits a manufacturer or distributor from using or threatening to use the exercise of
the right of first refusal in bad faith. (Sec. 3)
9. Defines terms. (Sec. 1, 2, 4)
10. Makes technical and conforming changes. (Sec. 1, 3, 4)