Researcher: DC Page 1 4/29/21
OLR Bill Analysis
SB 264 (File 7, as amended by Senate “A”)*
AN ACT CONCERNING FAIR REIMBURSEMENT TO RETAIL
DEALERS OF POWER EQUIPMENT.
SUMMARY
By law, for outdoor (i.e., farm, forestry, yard, and garden)
equipment warranties contractually serviced by an authorized dealer,
the supplier must approve or deny claims for parts and services within
30 days. Suppliers must then pay the claims within 30 days after
approving them. This bill requires equipment suppliers to compensate
their authorized dealers for repairs performed under these warranties
at the (1) current net price plus 18% for any parts and (2) dealer’s
posted hourly labor rate charged for non-warranty repair work. It
requires the dealer to give the supplier prior notice of the labor rate,
which must be reasonable in comparison to other similarly sized brand
dealers in their geographic area. Under the bill, “current net price”
means the price listed in a supplier’s price list or catalog in effect at the
time a warranty claim is made, minus any applicable discounts
allowed.
Under the bill, a supplier who denies or charges back certain dealer
warranty claims because of certain minor errors must allow the dealer
to resubmit the claim, according the supplier’s reasonable guidelines,
within 30 days after the initial denial or charge-back. Specifically,
suppliers must allow such resubmissions when they deny or charge
back a claim following a timely audit based solely on (1) the dealer’s
failure to comply with a claim processing procedure, so long as the
failure does not challenge the claim’s legitimacy; (2) a clerical error; or
(3) other administrative technicalities. The bill specifies that a
reasonable deadline to submit claims or supporting materials required
by the supplier must not be considered a claim processing procedure
or an administrative technicality. 2021SB-00264-R01-BA.DOCX
Researcher: DC Page 2 4/29/21
*Senate Amendment “A” (1) defines “current net price” and (2)
eliminates the underlying bill’s prohibition on the supplier denying
certain warranty claims with minor errors.
EFFECTIVE DATE: January 1, 2022
COMMITTEE ACTION
General Law Committee
Joint Favorable
Yea 19 Nay 0 (02/02/2021)