O F F I C E O F L E G I S L A T I V E R E S E A R C H
P U B L I C A C T S U M M A R Y
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PA 21-127—SB 264
General Law Committee
AN ACT CONCERNING RE IMBURSEMENT FOR WARR ANTY
CLAIMS TO RETAIL DEA LERS OF POWER EQUIPM ENT
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 act 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 act, “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 act, 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 act 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.
EFFECTIVE DATE: January 1, 2022