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 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))