The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Michelle Ridge.
DIGEST
SB 126 Engrossed 2018 Regular Session Martiny
Present law provides relative to regulation of vehicle manufacturers and dealers.
Present law provides relative to recall notices.
Proposed law provides relative to compensation for recall repairs.
Proposed law defines the following terms:
(1)"Stop sale order" means a notification issued by a manufacturer, distributor, factory branch,
or distributor branch to its franchised new motor vehicle dealers stating that certain used
vehicles in inventory shall not be sold or leased, at either retail or wholesale, due to a federal
safety recall for a defect or a noncompliance, or a federal emissions recall.
(2)"Do not drive order" means a notification issued by a manufacturer, distributor, factory
branch, or distributor branch stating that certain used vehicles shall not be driven due to a
federal safety recall for a defect or a noncompliance, or a federal emissions recall. Such
notification shall include an unconditional instruction to the recipient to not drive the vehicle
until the remedy for the recall is complete.
Proposed law provides that a manufacturer shall compensate its new motor vehicle dealers for all
labor and parts required by the manufacturer to perform recall repairs.
Proposed law provides if parts or a remedy are not reasonably available to perform a recall service
or repair on an affected used vehicle held for sale by a dealer authorized to sell and service new
vehicles of the same line-make or authorized to perform recall work on an affected vehicle within
45 days of the manufacturer issuing the initial notice of recall and the manufacturer has issued a stop
sale order or do not drive order on the vehicle, the manufacturer shall compensate the dealer at a
prorated rate of at least 1.25% of the value of the vehicle per month. Such compensation shall begin
45 days after the date on which the stop sale order or do not drive order was provided to the dealer
and shall cease when one of the following events occurs:
(1)The date the recall remedy or parts are made available.
(2)The date the stop sale order or do not drive order is withdrawn.
(3)The date the dealer disposes of the affected used vehicle.
Proposed law provides that the value of a used vehicle shall be the average trade-in value for used vehicles as indicated in an independent third-party guide for the year, make, and model of the
recalled vehicle.
Proposed law shall apply only to:
(1)Used vehicles subject to safety or emissions recalls pursuant to and recalled in accordance
with federal law and regulations adopted thereunder and when a stop sale order or do not
drive order has been issued and repair parts or remedy remain unavailable for 45 days or
longer in accordance with proposed law.
(2)New motor vehicle dealers holding an affected used vehicle for sale in inventory at the time
the stop sale order or do not drive order was issued.
(3)New motor vehicle dealers holding an affected used vehicle for sale that is a line-make that
the dealer is franchised to sell or one which the dealer is authorized to perform recall repairs
and that was taken in the used vehicle inventory of the dealer as a consumer trade-in incident
to the purchase of a new vehicle from the dealer after the stop sale order or do not drive order
was issued and when payments shall begin after the forty-fifth day that affected used vehicle
remains in the dealer's inventory and shall cease in accordance with proposed law.
Proposed law provides that it is a violation for a manufacturer to reduce the amount of compensation
otherwise owed to an individual new motor vehicle dealer solely because the new motor vehicle
dealer has submitted a claim for reimbursement under proposed law.
Proposed law shall not apply to an action by a manufacturer to any prospective change, modification,
cancellation, or elimination of any incentive program that is applied uniformly among all dealers of
the same line-make in the state.
Proposed law provides that all reimbursement claims made by new motor vehicle dealers for recall
remedies or repairs, or for compensation where no part or repair is reasonably available and the
vehicle is subject to a stop sale order or do not drive order shall be subject to the same limitations
and requirements as a warranty reimbursement claim made under certain provisions of law.
However, a manufacturer may compensate its franchised dealers under a national recall
compensation program provided the compensation under the program is equal to or greater than the
compensation provided in proposed law, or the manufacturer and dealer otherwise agree.
Proposed law provides that a manufacturer may direct the manner and method in which a dealer shall
demonstrate the inventory status of an affected used motor vehicle to determine eligibility under
proposed law, provided that such manner and method may not be unduly burdensome and may not
require information that is unduly burdensome to provide.
Proposed law provides that nothing shall require a manufacturer to provide total compensation to
a dealer that would exceed the total average trade-in value of the affected used motor vehicle as
originally determined in proposed law. Proposed law provides that any remedy provided to a dealer is exclusive and may not be combined
with any other state or federal recall compensation remedy or other federal law.
Effective August 1, 2018.
(Adds R.S. 32:1264.2)