FIRSTREGULARSESSION
[PERFECTED]
HOUSECOMMITTEESUBSTITUTEFOR
HOUSEBILLNO.894
102NDGENERALASSEMBLY
2041H.02P DANARADEMANMILLER,ChiefClerk
ANACT
Torepealsections144.020,144.070,307.380,407.812,and407.828,RSMo,andtoenactin
lieuthereoffivenewsectionsrelatingtomotorvehicles.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Sections144.020,144.070,307.380,407.812,and407.828,RSMo,are
2repealedandfivenewsectionsenactedinlieuthereof,tobeknownassections144.020,
3144.070,307.380,407.812,and407.828,toreadasfollows:
144.020.1.Ataxisherebyleviedandimposedfortheprivilegeoftitlingnewand
2usedmotorvehicles,trailers,boats,andoutboardmotorspurchasedoracquiredforuseonthe
3highwaysorwatersofthisstatewhicharerequiredtobetitledunderthelawsofthestateof
4Missouriand,exceptasprovidedinsubdivision(9)ofthissubsection,uponallsellersforthe
5privilegeofengaginginthebusinessofsellingtangiblepersonalpropertyorrendering
6taxableserviceatretailinthisstate.Therateoftaxshallbeasfollows:
7 (1)Uponeveryretailsaleinthisstateoftangiblepersonalproperty,excludingmotor
8vehicles,trailers,motorcycles,mopeds,motortricycles,boatsandoutboardmotorsrequiredto
9betitledunderthelawsofthestateofMissouriandsubjecttotaxundersubdivision(9)ofthis
10subsection,ataxequivalenttofourpercentofthepurchasepricepaidorcharged,orincase
11suchsaleinvolvestheexchangeofproperty,ataxequivalenttofourpercentofthe
12considerationpaidorcharged,includingthefairmarketvalueofthepropertyexchangedat
13thetimeandplaceoftheexchange,exceptasotherwiseprovidedinsection144.025;
14 (2)Ataxequivalenttofourpercentoftheamountpaidforadmissionandseating
15accommodations,orfeespaidto,orinanyplaceofamusement,entertainmentorrecreation,
16gamesandathleticevents,exceptamountspaidforanyinstructionalclass;
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 17 (3)Ataxequivalenttofourpercentofthebasicratepaidorchargedonallsalesof
18electricityorelectricalcurrent,waterandgas,naturalorartificial,todomestic,commercialor
19industrialconsumers;
20 (4)(a)Ataxequivalenttofourpercentonthebasicratepaidorchargedonallsales
21oflocalandlongdistancetelecommunicationsservicetotelecommunicationssubscribersand
22toothersthroughequipmentoftelecommunicationssubscribersforthetransmissionof
23messagesandconversationsanduponthesale,rentalorleasingofallequipmentorservices
24pertainingorincidentalthereto;exceptthat,thepaymentmadebytelecommunications
25subscribersorothers,pursuanttosection144.060,andanyamountspaidforaccesstothe
26internetorinteractivecomputerservicesshallnotbeconsideredasamountspaidfor
27telecommunicationsservices;
28 (b)Iflocalandlongdistancetelecommunicationsservicessubjecttotaxunderthis
29subdivisionareaggregatedwithandnotseparatelystatedfromchargesfor
30telecommunicationsserviceorotherservicesnotsubjecttotaxunderthissubdivision,
31including,butnotlimitedto,interstateorinternationaltelecommunicationsservices,thenthe
32chargesfornontaxableservicesmaybesubjecttotaxationunlessthetelecommunications
33providercanidentifybyreasonableandverifiablestandardssuchportionofthechargesnot
34subjecttosuchtaxfromitsbooksandrecordsthatarekeptintheregularcourseofbusiness,
35including,butnotlimitedto,financialstatement,generalledgers,invoiceandbillingsystems
36andreports,andreportsforregulatorytariffsandotherregulatorymatters;
37 (c)Atelecommunicationsprovidershallnotifythedirectorofrevenueofitsintention
38toutilizethestandardsdescribedinparagraph(b)ofthissubdivisiontodeterminethecharges
39thataresubjecttosalestaxunderthissubdivision.Suchnotificationshallbeinwritingand
40shallmeetstandardizedcriteriaestablishedbythedepartmentregardingtheformandformat
41ofsuchnotice;
42 (d)Thedirectorofrevenuemaypromulgateandenforcereasonablerulesand
43regulationsfortheadministrationandenforcementoftheprovisionsofthissubdivision.Any
44ruleorportionofarule,asthattermisdefinedinsection536.010,thatiscreatedunderthe
45authoritydelegatedinthissectionshallbecomeeffectiveonlyifitcomplieswithandis
46subjecttoalloftheprovisionsofchapter536and,ifapplicable,section536.028.Thissection
47andchapter536arenonseverableandifanyofthepowersvestedwiththegeneralassembly
48pursuanttochapter536toreview,todelaytheeffectivedate,ortodisapproveandannula
49rulearesubsequentlyheldunconstitutional,thenthegrantofrulemakingauthorityandany
50ruleproposedoradoptedafterAugust28,2019,shallbeinvalidandvoid;
51 (5)Ataxequivalenttofourpercentofthebasicratepaidorchargedforallsalesof
52servicesfortransmissionofmessagesoftelegraphcompanies;
HCSHB894 2 53 (6)Ataxequivalenttofourpercentontheamountofsalesorchargesforallrooms,
54mealsanddrinksfurnishedatanyhotel,motel,tavern,inn,restaurant,eatinghouse,
55drugstore,diningcar,touristcabin,touristcamporotherplaceinwhichrooms,mealsor
56drinksareregularlyservedtothepublic.Thetaximposedunderthissubdivisionshallnot
57applytoanyautomaticmandatorygratuityforalargegroupimposedbyarestaurantwhen
58suchgratuityisreportedasemployeetipincomeandtherestaurantwithholdsincometax
59undersection143.191onsuchgratuity;
60 (7)Ataxequivalenttofourpercentoftheamountpaidorchargedforintrastate
61ticketsbyeverypersonoperatingarailroad,sleepingcar,diningcar,expresscar,boat,
62airplaneandsuchbusesandtrucksasarelicensedbythedivisionofmotorcarrierandrailroad
63safetyofthedepartmentofeconomicdevelopmentofMissouri,engagedinthetransportation
64ofpersonsforhire;
65 (8)Ataxequivalenttofourpercentoftheamountpaidorchargedforrentalorlease
66oftangiblepersonalproperty,providedthatifthelessororrenterofanytangiblepersonal
67propertyhadpreviouslypurchasedthepropertyundertheconditionsofsaleatretailorleased
68orrentedthepropertyandthetaxwaspaidatthetimeofpurchase,leaseorrental,thelessor,
69sublessor,renterorsubrentershallnotapplyorcollectthetaxonthesubsequentlease,
70sublease,rentalorsubrentalreceiptsfromthatproperty.Thepurchase,rentalorleaseof
71motorvehicles,trailers,motorcycles,mopeds,motortricycles,boats,andoutboardmotors
72shallbetaxedandthetaxpaidasprovidedinthissectionandsection144.070.Innoevent
73shalltherentalorleaseofboatsandoutboardmotorsbeconsideredasale,charge,orfeeto,
74fororinplacesofamusement,entertainmentorrecreationnorshallanysuchrentalorlease
75besubjecttoanytaximposedto,for,orinsuchplacesofamusement,entertainmentor
76recreation.Rentalandleasedboatsoroutboardmotorsshallbetaxedundertheprovisionsof
77thesalestaxlawsasprovidedundersuchlawsformotorvehiclesandtrailers.Tangible
78personalpropertywhichisexemptfromthesalesorusetaxundersection144.030uponasale
79thereofislikewiseexemptfromthesalesorusetaxupontheleaseorrentalthereof;
80 (9)Ataxequivalenttofourpercentofthepurchaseprice,asdefinedinsection
81144.070,ofnewandusedmotorvehicles,trailers,boats,andoutboardmotorspurchasedor
82acquiredforuseonthehighwaysorwatersofthisstatewhicharerequiredtoberegistered
83underthelawsofthestateofMissouri.Thistaxisimposedonthepersontitlingsuch
84property,andshallbepaidaccordingtotheproceduresinsection144.070or144.440.
85 2.Allticketssoldwhicharesoldundertheprovisionsofthischapterwhichare
86subjecttothesalestaxshallhaveprinted,stampedorotherwiseendorsedthereon,thewords
87"Thisticketissubjecttoasalestax.".
144.070.1.Atthetimetheownerofanyneworusedmotorvehicle,trailer,boat,or
2outboardmotorwhichwasacquiredinatransactionsubjecttosalestaxundertheMissouri
HCSHB894 3 3salestaxlawmakesapplicationtothedirectorofrevenueforanofficialcertificateoftitleand
4theregistrationofthemotorvehicle,trailer,boat,oroutboardmotorasotherwiseprovidedby
5law,theownershallpresenttothedirectorofrevenueevidencesatisfactorytothedirectorof
6revenueshowingthepurchasepriceexclusiveofanychargeincidenttotheextensionofcredit
7paidbyorchargedtotheapplicantintheacquisitionofthemotorvehicle,trailer,boat,or
8outboardmotor,orthatnosalestaxwasincurredinitsacquisition,andifsalestaxwas
9incurredinitsacquisition,theapplicantshallpayorcausetobepaidtothedirectorofrevenue
10thesalestaxprovidedbytheMissourisalestaxlawinadditiontotheregistrationfeesnowor
11hereafterrequiredaccordingtolaw,andthedirectorofrevenueshallnotissueacertificateof
12titleforanyneworusedmotorvehicle,trailer,boat,oroutboardmotorsubjecttosalestaxas
13providedintheMissourisalestaxlawuntilthetaxleviedforthesaleofthesameunder
14sections144.010to144.510hasbeenpaidasprovidedinthissectionorisregisteredunder
15theprovisionsofsubsection5ofthissection.
16 2.Asusedinsubsection1ofthissection,theterm"purchaseprice"shallmeanthe
17totalamountofthecontractpriceagreeduponbetweenthesellerandtheapplicantinthe
18acquisitionofthemotorvehicle,trailer,boat,oroutboardmotor,regardlessofthemediumof
19paymenttherefor.
20 3.Intheeventthatthepurchasepriceisunknownorundisclosed,orthattheevidence
21thereofisnotsatisfactorytothedirectorofrevenue,thesameshallbefixedbyappraisement
22bythedirector.
23 4.Thedirectorofthedepartmentofrevenueshallendorseupontheofficialcertificate
24oftitleissuedbythedirectoruponsuchapplicationanentryshowingthatsuchsalestaxhas
25beenpaidorthatthemotorvehicle,trailer,boat,oroutboardmotorrepresentedbysuch
26certificateisexemptfromsalestaxandstatethegroundforsuchexemption.
27 5.Anyperson,company,orcorporationengagedinthebusinessofrentingorleasing
28motorvehicles,trailers,boats,oroutboardmotors,whicharetobeusedexclusivelyforrental
29orleasepurposes,andnotforresale,mayapplytothedirectorofrevenueforauthorityto
30operateasaleasingorrentalcompanyandpayanannualfeeoftwohundredfiftydollarsfor
31suchauthority.Anycompanyapprovedbythedirectorofrevenuemaypaythetaxdueon
32anymotorvehicle,trailer,boat,oroutboardmotorasrequiredinsection144.020atthetime
33ofregistrationthereoforinlieuthereofmaypayasalestaxasprovidedinsections144.010,
34144.020,144.070and144.440.Asalestaxshallbechargedtoandpaidbyaleasingcompany
35whichdoesnotexercisetheoptionofpayinginaccordancewithsection144.020,onthe
36amountchargedforeachrentalorleaseagreementwhilethemotorvehicle,trailer,boat,or
37outboardmotorisdomiciledinthisstate.Anymotorvehicle,trailer,boat,oroutboardmotor
38whichisleasedastheresultofacontractexecutedinthisstateshallbepresumedtobe
39domiciledinthisstate.
HCSHB894 4 40 6.Everyapplicanttobearegisteredfleetownerasdescribedinsubsections6to10of
41section301.032shallfurnishwiththeapplicationtooperateasaregisteredfleetownera
42corporatesuretybondorirrevocableletterofcredit,asdefinedinsection400.5-102,issued
43byanystateorfederalfinancialinstitutioninthepenalsumofonehundredthousanddollars,
44onaformapprovedbythedepartment.Thebondorirrevocableletterofcreditshallbe
45conditionedupontheregisteredfleetownercomplyingwiththeprovisionsofanystatutes
46applicabletoregisteredfleetowners,andthebondshallbeanindemnityforanyloss
47sustainedbyreasonoftheactsofthepersonbondedwhensuchactsconstitutegroundsforthe
48suspensionorrevocationoftheregisteredfleetownerlicense.Thebondshallbeexecutedin
49thenameofthestateofMissouriforthebenefitofallaggrievedpartiesortheirrevocable
50letterofcreditshallnamethestateofMissouriasthebeneficiary;exceptthat,theaggregate
51liabilityofthesuretyorfinancialinstitutiontotheaggrievedpartiesshall,innoevent,exceed
52theamountofthebondorirrevocableletterofcredit.Theproceedsofthebondorirrevocable
53letterofcreditshallbepaiduponreceiptbythedepartmentofafinaljudgmentfroma
54Missouricourtofcompetentjurisdictionagainsttheprincipalandinfavorofanaggrieved
55party.
56 7.Anycorporationmayhaveoneormoreofitsdivisionsseparatelyapplytothe
57directorofrevenueforauthorizationtooperateasaleasingcompany,providedthatthe
58corporation:
59 (1)Hasfiledawrittenconsentwiththedirectorauthorizinganyofitsdivisionsto
60applyforsuchauthority;
61 (2)IsauthorizedtodobusinessinMissouri;
62 (3)Hasagreedtotreatanysaleofamotorvehicle,trailer,boat,oroutboardmotor
63fromoneofitsdivisionstoanotherofitsdivisionsasasaleatretail;
64 (4)Hasregisteredunderthefictitiousnameprovisionsofsections417.200to417.230
65eachofitsdivisionsdoingbusinessinMissouriasaleasingcompany;and
66 (5)Operateseachofitsdivisionsonabasisseparatefromeachofitsotherdivisions.
67However,whenthetransferofamotorvehicle,trailer,boatoroutboardmotoroccurswithina
68corporationwhichholdsalicensetooperateasamotorvehicleorboatdealerpursuantto
69sections301.550to301.573theprovisionsinsubdivision(3)ofthissubsectionshallnot
70apply.
71 8.Iftheownerofanymotorvehicle,trailer,boat,oroutboardmotordesirestocharge
72andcollectsalestaxasprovidedinthissection,theownershallmakeapplicationtothe
73directorofrevenueforapermittooperateasamotorvehicle,trailer,boat,oroutboardmotor
74leasingcompany.Thedirectorofrevenueshallpromulgaterulesandregulationsdetermining
75thequalificationsofsuchacompany,andthemethodofcollectionandreportingofsalestax
76chargedandcollected.Suchregulationsshallapplyonlytoownersofmotorvehicles,trailers,
HCSHB894 5 77boats,oroutboardmotors,electingtoqualifyasmotorvehicle,trailer,boat,oroutboard
78motorleasingcompaniesundertheprovisionsofsubsection5ofthissection,andnomotor
79vehiclerentingorleasing,trailerrentingorleasing,orboatoroutboardmotorrentingor
80leasingcompanycancomeundersections144.010,144.020,144.070and144.440unlessall
81motorvehicles,trailers,boats,andoutboardmotorsheldforrentingandleasingareincluded.
82 9.Anyperson,company,orcorporationengagedinthebusinessofrentingorleasing
83threethousandfivehundredormoremotorvehicleswhicharetobeusedexclusivelyfor
84rentalorleasingpurposesandnotforresale,andthathasappliedtothedirectorofrevenuefor
85authoritytooperateasaleasingcompanymayalsooperateasaregisteredfleetowneras
86prescribedinsection301.032.
87 10.BeginningJuly1,2010,anymotorvehicledealerlicensedundersection301.560
88engagedinthebusinessofsellingmotorvehiclesortrailers[may] shallapplytothedirector
89ofrevenueforauthoritytocollectandremitthesalestaxrequiredunderthissectiononall
90motorvehiclessoldbythemotorvehicledealer.Amotorvehicledealerreceivingauthorityto
91collectandremitthetaxissubjecttoallprovisionsundersections144.010to144.525.Any
92motorvehicledealerauthorizedtocollectandremitsalestaxesonmotorvehiclesunderthis
93subsectionshallbeentitledtodeductandretainanamountequaltotwopercentofthemotor
94vehiclesalestaxpursuanttosection144.140.Anyamountofthetaxcollectedunderthis
95subsectionthatisretainedbyamotorvehicledealerpursuanttosection144.140shallnot
96constitutestaterevenue.Innoeventshallrevenuesfromthegeneralrevenuefundorany
97otherstatefundbeutilizedtocompensatemotorvehicledealersfortheirroleincollectingand
98remittingsalestaxesonmotorvehicles.Intheeventthissubsectionoranyportionthereofis
99heldtoviolateArticleIV,Section30(b)oftheMissouriConstitution,nomotorvehicledealer
100shallbeauthorizedtocollectandremitsalestaxesonmotorvehiclesunderthissection.No
101motorvehicledealershallseekcompensationfromthestateofMissourioritsagenciesifa
102courtofcompetentjurisdictiondeclaresthattheretentionoftwopercentofthemotorvehicle
103salestaxisunconstitutionalandordersthereturnofsuchrevenues.
104 11.(1)Everymotorvehicledealerlicensedundersection301.560,assoonas
105technologicallypossiblefollowingthedevelopmentandmaintenanceofamodernized,
106integratedsystemforthetitlingofvehicles,issuanceandrenewalofvehicle
107registrations,issuanceandrenewalofdriver'slicensesandidentificationcards,and
108perfectionandreleaseofliensandencumbrancesonvehicles,tobefundedbytheMotor
109VehicleAdministrationTechnologyFundascreatedinsection301.558,shallcollectand
110remitthesalestaxrequiredunderthissectiononallmotorvehiclesthatsuchdealer
111sells.Incollectingandremittingthissalestax,motorvehicledealersshallbesubjectto
112allapplicableprovisionsundersections144.010to144.527.
HCSHB894 6 113 (2)Thedirectorofrevenuemaypromulgateallnecessaryrulesandregulations
114fortheadministrationofthissubsection.Anyruleorportionofarule,asthattermis
115definedinsection536.010,thatiscreatedundertheauthoritydelegatedinthis
116subsectionshallbecomeeffectiveonlyifitcomplieswithandissubjecttoallofthe
117provisionsofchapter536and,ifapplicable,section536.028.Thissubsectionand
118chapter536arenonseverableandifanyofthepowersvestedwiththegeneralassembly
119pursuanttochapter536toreview,todelaytheeffectivedate,ortodisapproveandannul
120arulearesubsequentlyheldunconstitutional,thenthegrantofrulemakingauthority
121andanyruleproposedoradoptedafterAugust28,2023,shallbeinvalidandvoid.
307.380.1.Everyvehicleofthetyperequiredtobeinspecteduponhavingbeen
2involvedinanaccidentandwhensodirectedbyapoliceofficermustbeinspectedandan
3officialcertificateofinspectionandapproval,sticker,sealorotherdevicebeobtainedfor
4suchvehiclebeforeitisagainoperatedonthehighwaysofthisstate.
5 2.Attheseller'sexpenseeveryusedmotorvehicleofthetyperequiredtobe
6inspectedbysection307.350shallimmediatelypriortosalebefullyinspectedregardlessof
7anycurrentcertificateofinspectionandapproval,andanappropriatenewcertificateof
8inspectionandapproval,sticker,sealorotherdeviceshallbeobtainednomorethansixty
9dayspriortothedateofsale.Suchinspectionshallnotberequiredforamotorvehicle
10havinglessthanfortythousandmilesforthethree-yearperiodfollowingthemodelyear
11ofmanufacture.Thesellershallpresentthecertificateofinspectionandapprovaltothe
12buyeratthepointofsaleandthebuyershallberequiredtosubmitthecertificateof
13inspectionwhenapplyingforregistrationofthevehicle.
14 [2.]3.Nothingcontainedintheprovisionsofthissectionshallbeconstruedto
15prohibitadealeroranyotherpersonfromsellingavehiclewithoutacertificateofinspection
16andapprovalifthevehicleissoldforjunk,salvage,orforrebuilding,orforvehiclessoldat
17publicauctionorfromdealertodealer.Thepurchaserofanyvehiclewhichispurchasedfor
18junk,salvage,orforrebuildingshallgivetotheselleranaffidavit,onaformprescribedbythe
19superintendentoftheMissouristatehighwaypatrol,statingthatthevehicleisbeing
20purchasedforoneofthereasonsstatedherein.Novehicleofthetyperequiredtobeinspected
21bysection307.350whichispurchasedasjunk,salvage,orforrebuildingshallagainbe
22registeredinthisstateuntiltheownerhassubmittedthevehicleforinspectionandobtained
23anofficialcertificateofinspectionandapproval,sticker,sealorotherdeviceforsuchvehicle.
24 [3.]4.Notwithstandingtheprovisionsofsection307.390,violationofthissection
25shallbedeemedaninfraction.
407.812.1.AnyfranchisorobtainingorrenewingitslicenseafterAugust28,2010,
2shallbeboundbytheprovisionsoftheMVFPactandshallcomplywithit,andnofranchise
3agreementmade,entered,modified,orrenewedafterAugust28,2010,shallavoidthe
HCSHB894 7 4requirementsoftheMVFPact,orviolateitsprovisions,andnofranchiseagreementshallbe
5performedafterthedatethefranchisor'slicenseisissuedorrenewedinsuchamannerthatthe
6franchisoravoidsorotherwisedoesnotconformorcomplywiththerequirementsofthe
7MVFPact.Notwithstandingtheeffectivedateofanyfranchiseagreement,allfranchisor
8licensesandrenewalsthereofareissuedsubjecttoallprovisionsoftheMVFPactandchapter
9301andanyregulationsineffectuponthedateofissuance,aswellasallfutureprovisionsof
10theMVFPactandchapter301andanyregulationswhichmaybecomeeffectiveduringthe
11termofthelicense.
12 2.TheprovisionsoftheMVFPactshallapplytoeachfranchisethatafranchisor,
13manufacturer,importer,ordistributorhaswithafranchiseeandallagreementsbetweena
14franchiseeandacommonentityoranypersonthatiscontrolledbyafranchisor.
15 3.Nodealerormanufacturerlicensedinthisstatepursuanttotheprovisionsof
16sections301.550to301.573shallallowanysubsidiaryorrelatedentitytoengageinthe
17businessofsellingmotorvehicles,exceptasotherwisepermittedbylaw.Anydealeror
18manufacturerlicensedinthisstateshallhavestandingtoenforcetheprovisionsofthis
19subsectionprovidedthatafranchiserelationshipexistsbetweentheparties.
20 4.Noentitycontrolling,controlledby,orsharingacommonparententityor
21siblingentitywithalicenseddealerormanufacturer,shallengageinthebusinessof
22sellingmotorvehiclestoretailconsumersinthisstate,exceptaspermittedbysections
23301.550to301.575andtheMVFPact.Anydealerormanufacturerlicensedinthisstate
24shallhavestandingtoenforcetheprovisionsofthissubsection.
25 5.Nodealerormanufacturer,thatisnotlicensedinthisstatepursuantto
26sections301.550to301.575shallengageinthebusinessofsellingmotorvehiclestoretail
27consumersinthisstate,exceptaspermittedbysections301.550to301.575andthe
28MVFPact.Anydealerormanufacturerlicensedinthisstateshallhavestandingto
29enforcetheprovisionsofthissubsection,providedthatafranchiserelationshipexists
30betweentheparties.
31 6.Amanufacturer,importer,ordistributormayengageinthebusinessofselling
32motorvehiclestoretailconsumersinthisstatefromadealershipifthemanufacturer,
33importer,ordistributorownedthedealershipandheldalicenseforthedealershiponor
34beforeJanuary1,2024,providedthattheownershiporcontrollinginterestofsuch
35dealershipisnottransferred,sold,orconveyedtoanotherpersonorentityrequiredto
36belicensedunderthischapter.
407.828.1.Notwithstandinganyprovisioninafranchisetothecontrary,each
2franchisorshallspecifyinwritingtoeachofitsfranchiseesinthisstatethefranchisee's
3obligationsforpreparation,delivery,andwarrantyserviceonitsproducts.Thefranchisor
4shallfairlyandreasonablycompensatethefranchiseeforpreparation,delivery,andwarranty
HCSHB894 8 5servicerequiredofthefranchiseebythefranchisor.Thefranchisorshallprovidethe
6franchiseewiththescheduleofcompensationtobepaidtothefranchiseeforparts,labor,and
7service,andthetimeallowancefortheperformanceofthelaborandserviceforthe
8franchisee'sobligationsforpreparation,delivery,andwarrantyservice.
9 2.Thescheduleofcompensationshallincludereasonablecompensationfor
10diagnosticwork,aswellasrepairserviceandlaborforthefranchiseetomeetitsobligations
11forpreparation,delivery,andwarrantyservice.Thescheduleshallalsoincludereasonable
12andadequatetimeallowancesforthediagnosisandperformanceofpreparation,delivery,and
13warrantyservicetobeperformedinacarefulandprofessionalmanner.Inthedetermination
14ofwhatconstitutesreasonablecompensationforlaborandservicepursuanttothissection,the
15principalfactortobegivenconsiderationshallbetheprevailingwageratesbeingchargedfor
16similarlaborandserviceby[franchiseesinthemarketinwhichthefranchiseeisdoing
17business,andinnoeventshallthecompensationofafranchiseeforlaborandservicebeless
18thantherateschargedby]thefranchiseeforsimilarlaborandservicetoretailcustomersfor
19nonwarrantylaborandservice[, providedthatsuchratesarereasonable]. Theprimaryfactor
20indetermining[afairand]reasonablecompensationforpartsunderthissectionshallbethe
21[prevailingamountchargedforsimilarpartsbyothersameline-makefranchiseesinthe
22marketinwhichthefranchiseeisdoingbusinessandthefairandreasonablecompensationfor
23partsshallnotbelessthanthe]amountchargedbythefranchiseeforsimilarpartstoretail
24customersfornonwarrantyparts[, providedthatsuchratesarereasonable.Ifanothersame
25line-makefranchiseeisnotavailablewithinthemarket,thentheprevailingamountcharged
26forsimilarpartsbyotherfranchiseesinthemarketshallbeusedastheprimaryfactor].
27 3.Afranchisorshallperformallwarrantyobligations,includingrecallnotices;
28includeinwrittennoticesoffranchisorrecallstonewmotorvehicleownersandfranchisees
29theexpecteddatebywhichnecessarypartsandequipmentwillbeavailabletofranchiseesfor
30thecorrectionofthedefects;and[reasonably] compensateanyofthefranchiseesinthisstate
31forrepairsrequiredbytherecall.[Reasonable] Compensationforparts[,] andlabor[, and
32service] forrecallrepairsshallbedeterminedundersubsection2ofthissection.
33 4.Nofranchisorshallrequireafranchiseetosubmitaclaimauthorizedunderthis
34sectionsoonerthanthirtydaysafterthefranchiseecompletesthepreparation,delivery,or
35warrantyserviceauthorizingtheclaimforpreparation,delivery,orwarrantyservice.All
36claimsmadebyafranchiseeunderthissectionshallbepaidwithinthirtydaysaftertheir
37approval.Allclaimsshallbeeitherapprovedordisapprovedbythefranchisorwithinthirty
38daysaftertheirreceiptonaproperformgenerallyusedbythefranchisorandcontainingthe
39usuallyrequiredinformationtherein.Anyclaimsnotspecificallydisapprovedinwriting
40withinthirtydaysafterthereceiptoftheformshallbeconsideredtobeapprovedand
HCSHB894 9 41paymentshallbemadewithinfifteendaysthereafter.Afranchiseeshallnotberequiredto
42maintaindefectivepartsformorethanthirtydaysaftersubmissionofaclaim.
43 5.Afranchisorshallcompensatethefranchiseeforfranchisor-sponsoredsalesor
44servicepromotionevents,includingbutnotlimitedto,rebates,programs,oractivitiesin
45accordancewithestablishedwrittenguidelinesforsuchevents,programs,oractivities,which
46guidelinesshallbeprovidedtoeachfranchisee.
47 6.Nofranchisorshallrequireafranchiseetosubmitaclaimauthorizedunder
48subsection5ofthissectionsoonerthanthirtydaysafterthefranchiseebecomeseligibleto
49submittheclaim.Allclaimsmadebyafranchiseepursuanttosubsection5ofthissectionfor
50promotionevents,includingbutnotlimitedtorebates,programs,oractivitiesshallbepaid
51withintendaysaftertheirapproval.Allclaimsshallbeeitherapprovedordisapprovedbythe
52franchisorwithinthirtydaysaftertheirreceiptonaproperformgenerallyusedbythe
53franchisorandcontainingtheusuallyrequiredinformationtherein.Anyclaimnot
54specificallydisapprovedinwritingwithinthirtydaysafterthereceiptofthisformshallbe
55consideredtobeapprovedandpaymentshallbemadewithin[ten]fifteendays.
56 7.Incalculatingtheretailratecustomarilychargedbythefranchiseeforparts,
57service,andlabor,thefollowingworkshallnotbeincludedinthecalculation:
58 (1)Repairsforfranchisor,manufacturer,ordistributorspecialevents,specials,or
59promotionaldiscountsforretailcustomerrepairs;
60 (2)Partssoldatwholesale;
61 (3)Engineassembliesandtransmissionassemblies;
62 (4)Routinemaintenancenotcoveredunderanyretailcustomerwarranty,suchas
63fluids,filters,andbeltsnotprovidedinthecourseofrepairs;
64 (5)Nuts,bolts,fasteners,andsimilaritemsthatdonothaveanindividualpart
65number;
66 (6)Tires;and
67 (7)Vehiclereconditioning.
68 8.Ifafranchisor,manufacturer,importer,ordistributorfurnishesapartorcomponent
69toafranchisee,atnocost,touseinperformingrepairsunderarecall,campaignservice
70action,orwarrantyrepair,thefranchisorshallcompensatethefranchiseeforthepartor
71componentinthesamemanneraswarrantypartscompensationunderthissectionby
72compensatingthefranchiseeattheaveragemarkuponthecostforthepartorcomponentas
73listedinthepricescheduleofthefranchisor,manufacturer,importer,ordistributor,lessthe
74costforthepartorcomponent.Thissubsectionshallnotapplytoentireengine
75assemblies,propulsionengineassemblies,includingelectricvehiclebatteries,orentire
76transmissionassemblies.
HCSHB894 10 77 9.Afranchisorshallnotrequireafranchiseetoestablishtheretailratecustomarily
78chargedbythefranchiseeforparts,service,orlaborbyanundulyburdensomeortime-
79consumingmethodorbyrequiringinformationthatisundulyburdensomeortimeconsuming
80toprovide,including,butnotlimitedto,part-by-partortransaction-by-transaction
81calculations.Afranchiseeshallnotrequestafranchisortoapproveadifferentlaborrate
82orpartsratemorethantwiceinonecalendaryear.
83 10.Ifafranchiseesubmitsanyclaimunderthissectiontoafranchisorthatis
84incomplete,inaccurate,orlackinganyinformationusuallyrequiredbythefranchisor,thenthe
85franchisorshallpromptlynotifythefranchisee,andthetimelimittosubmittheclaimshallbe
86extendedforareasonablelengthoftime,notlessthanfivebusinessdaysfollowingnoticeby
87thefranchisortothefranchisee,forthefranchiseetoprovidethecomplete,accurate,or
88lackinginformationtothefranchisor.
89 11.(1)Afranchisormayonlyauditwarranty,sales,orincentiveclaimsandcharge-
90backtothefranchiseeunsubstantiatedclaimsforaperiodoftwelvemonthsfollowing
91payment,subjecttoalloftheprovisionsofthissection.Furthermore,ifthefranchisorhas
92goodcausetobelievethatafranchiseehassubmittedfraudulentclaims,thenthefranchisor
93mayonlyauditsuspectedfraudulentwarranty,sales,orincentiveclaimsandcharge-backto
94thefranchiseefraudulentclaimsforaperiodoftwoyearsfollowingpayment,subjecttoall
95provisionsofthissection.
96 (2)Afranchisorshallnotrequiredocumentationforwarranty,sales,orincentive
97claimsmorethantwelvemonthsaftertheclaimwaspaid.
98 (3)Priortorequiringanycharge-back,reimbursement,orcreditagainstafuture
99transactionarisingoutofanaudit,thefranchisorshallsubmitwrittennoticetothefranchisee
100alongwithacopyofitsauditandthedetailedreasonforeachintendedcharge-back,
101reimbursement,orcredit.
102 12.Afranchiseemayfileacomplaintwiththeadministrativehearingcommission
103pursuanttosection407.822within[thirty] sixtydaysafterreceiptofany[such] written
104notice[challengingsuchaction] byafranchisorofanyadversedecisiononanyclaimfor
105reimbursementsubmittedpursuanttothissection,includingbutnotlimitedtospecific
106claimsforreimbursementinindividualwarrantyrepairtransactions,andrequestsfor
107anincreaseinlabororpartsrate.Ifacomplaintisfiledwithinthe[thirty] sixtydays,then
108the[charge-back,reimbursement,orcredit] denialorreductionofreimbursement,denial
109ofarequestforanincreaseinlabororpartsrate,charge-back,orotherdetermination
110byafranchisorwhichisadversetoafranchiseeshallbestayedpendingahearingand
111determinationofthematterundersection407.822.Thefranchisorshallfileananswerto
112thecomplaintwithinthirtydaysafterserviceofthecomplaint.If,followingahearing
113whichshallbeheldwithinsixtydaysfollowingserviceofthefranchisor'sanswer,the
HCSHB894 11 114administrativehearingcommissiondeterminesthat[anyportionofthecharge-back,
115reimbursement,orcreditisimproper,thenthatportionofthecharge-back,reimbursement,
116orcreditshallbevoidandnotallowed] afranchisorhasviolatedanyrequirementsofthis
117section,thenthedenialorreductionofreimbursement,denialofarequestforan
118increaseinlabororpartsrate,orcharge-backshallbevoidandthefranchisorshall,
119withinfifteendaysofthecommission'sorder,fairlycompensatethefranchiseeas
120requiredbytheprovisionsofthissection.Section407.835shallapplytoproceedings
121pursuanttothissection.
âś”
HCSHB894 12