SLS 20RS-853 ORIGINAL
2020 Regular Session
SENATE BILL NO. 470
BY SENATOR MORRIS
MOTOR VEHICLES. Provides relative to warranty agreements and claims involving the
transfer recreational vehicles. (8/1/20)
1 AN ACT
2 To amend and reenact R.S. 32:1270.23(A)(5) and (B)(6), relative to recreational vehicles,
3 to provide with respect to warranty agreements involving recreational vehicle
4 transfers; to provide for the rejection of claims; and to provide for related matters.
5 Be it enacted by the Legislature of Louisiana:
6 Section 1. R.S. 32:1270.23(A)(5) and (B)(6) are hereby amended and reenacted to
7 ยง1270.23. Warranty; compensation; audits of recreational vehicle dealer records
8 A. * * *
9 (5) The Notwithstanding any other laws to the contrary, the obligations
10 in this Subsection may not be modified by contract.
11 B. * * *
12 (6) No claim may be rejected as late if it has been submitted within sixty
13 days of the date the repair order was written completed.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 470
SLS 20RS-853 ORIGINAL
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Jerry J. Guillot.
DIGEST
SB 470 Original 2020 Regular Session Morris
Present law, relative to recreational vehicles, provides that it is a violation for a
manufacturer, a distributor, a wholesaler, or factory branch, or officer, agent or other
representative thereof, to fail to adequately and fairly compensate its recreational vehicle
dealers for labor, parts, and other expenses incurred by such dealer to perform under and
comply with a manufacturer's or a distributor's warranty agreement. Present law provides
that in no event shall any manufacturer or distributor pay its recreational vehicle dealers at
a price or rate for warranty work that is less than that charged by the recreational vehicle
dealer to the retail customers of the recreational vehicle dealer for nonwarranty work of like
kind. Provides that warranty work includes parts and labor performed. Requires that all
claims made by the recreational vehicle dealer for compensation be paid within 30 days after
approval and be approved or denied within 30 days after receipt. Requires that when any
claim is denied, the recreational vehicle dealer be notified in writing of the grounds for
denial. Present law provides that the obligations above may be modified by contract.
Proposed law provides that these obligations may not be modified by contract. Otherwise
retains present law.
Present law provides that notwithstanding the terms of any franchise agreement, warranty,
and sales incentive, audits of recreational vehicle dealer records may be conducted by the
manufacturer, distributor, or factory branch. Requires that any audit for warranty parts or
service compensation be for the 12-month period immediately following the date of the
payment of the claim by the manufacturer or distributor. However, provides that a
recreational vehicle dealer shall not be held liable by virtue of an audit for failure to retain
parts for a period in excess of six months. Provides that any audit for sales incentives,
service incentives, rebates, or other forms of incentive compensation shall be only for the
12-month period immediately following the date of the final payment to the recreational
vehicle dealer under a promotion, event, program, or activity. Provides that in no event shall
the manufacturer, distributor, or factory branch fail to allow the recreational vehicle dealer
to make corrections to the sales data in less than 120 days from the program period. Further,
no penalty other than amounts advanced on a recreational vehicle reported incorrectly shall
be due in connection with the audit. Provides that with respect to recreational vehicles sold
during the time period subject to the audit, but submitted incorrectly to the manufacturer,
distributor, or wholesale distributor branch or factory branch, the recreational vehicle dealer
shall be charged back for the amount reported incorrectly and credited with the amount due,
if anything, on the actual sale date. Provides that no claim which has been approved and paid
may be charged back to the recreational vehicle dealer unless it can be shown that the claim
was false or fraudulent, the repairs were not properly made, the repairs were unnecessary to
correct the defective condition under generally accepted standards of workmanship, the
recreational vehicle dealer failed to reasonably substantiate the repair in accordance with
reasonable written requirements of the manufacturer or distributor, or if the recreational
vehicle dealer was notified of the requirements prior to the time the claim arose and if the
requirements were in effect at the time the claim arose.
Present law provides that a manufacturer or distributor shall not deny a claim solely based
on a recreational vehicle dealer's incidental failure to comply with a specific claim
processing requirement, or a clerical error, or other administrative technicality.
Present law provides that limitations on warranty parts or service compensation, sales
incentive audits, rebates, or other forms of incentive compensation, chargebacks for warranty
parts or service compensation, and service incentives and chargebacks for sales
compensation only shall not be effective in the case of intentionally false or fraudulent
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 470
SLS 20RS-853 ORIGINAL
claims.
Present law provides that it shall be deemed an unfair act relative to the distribution and sale
of motor vehicles, to audit a recreational vehicle dealer more frequently than two
sales-related and two service-related audits in a 12-month period. Provides that nothing shall
limit a manufacturer's or distributor's ability to perform routine claim reviews in the normal
course of business.
Present law provides that no claim may be rejected as late if it has been submitted within 60
days of the date the repair order was written.
Proposed law provides that no claim may be rejected as late if it has been submitted within
60 days of the date the repair order was written completed. Otherwise retains present law.
Effective August 1, 2020.
Amends R.S. 32:1270.23(A)(5) and (B)(6))
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.