FIRSTREGULARSESSION
HOUSEBILLNO.412
103RDGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVECASTEEL.
1492H.01I DANARADEMANMILLER,ChiefClerk
ANACT
Torepealsection407.828,RSMo,andtoenactinlieuthereofonenewsectionrelatingto
franchisorwarrantyduties.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Section407.828,RSMo,isrepealedandonenewsectionenactedinlieu
2thereof,tobeknownassection407.828,toreadasfollows:
407.828.1.Notwithstandinganyprovisioninafranchisetothecontrary,each
2franchisorshallspecifyinwritingtoeachofitsfranchiseesinthisstatethefranchisee's
3obligationsfor[preparation,delivery,and]warrantyserviceonitsproducts.Thefranchisor
4shallfairlyandreasonablycompensatethefranchiseeforpreparation,delivery,andwarranty
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
16similarlaborandservicebythefranchiseeforsimilarlaborandservicetoretailcustomersfor
17nonwarrantylaborandservice.] Thefranchisorshallcompensatethefranchiseefor
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 18warrantyservicepartsandlaborrequiredofthefranchiseebythefranchisorpursuant
19totheprovisionsofthissection.
20 2.Compensationforpartsusedinwarrantyserviceshallbereasonable.For
21purposesofthissection,theprimaryfactorindeterminingreasonablecompensationforparts
22[underthissection] shallbetheamountchargedbythefranchiseeforsimilarpartstoretail
23customersfornonwarrantyrepairparts.Afranchisormayrequestsuchdocumentationas
24isreasonablefromthefranchiseetosubstantiatetheamountchargedbythefranchisee
25forpartsusedinnonwarrantyrepairs,butafranchisorshallnotrequestdocumentation
26ofatypeoramountthatisundulyorunnecessarilyburdensometothefranchisee.
27Compensationforlaborusedinwarrantyserviceshallbereasonableandmaybe
28determinedattheelectionofthedealerasdescribedinsubsection3ofthissection,in
29lieuofanylaborcompensationscheduleprescribedbythefranchisor.
30 3.Compensationforwarrantylaborshallequalthedealer'slaborratefor
31nonwarrantyrepairsmultipliedbythetimeprovidedinwhichevergenerallyaccepted
32industrylabortimeguideisusedbythedealerfornonwarrantycustomer-paidservice
33repairorders.Ifnotimeguideexistsforawarrantyrepair,compensationforwarranty
34laborshallequalthedealer'snonwarrantylaborratebeingchargedatthetimethe
35repairiscompleted,multipliedbythetimeactuallyspenttocompletetherepairorder
36andshallnotbelessthanthetimechargedtoretailcustomersforthesameorsimilar
37workperformed.Compensationforwarrantylaborshallincludealldiagnostictimefor
38repairsperformedunderthissectionincluding,butnotlimitedto,alltimespent
39communicatingwiththemanufacturer'stechnicalassistantsorexternalmanufacturer
40sourceinordertoprovideawarrantyrepair,andshallnotbelessthanthetimecharged
41toretailcustomersforthesameorsimilarworkperformed.
42 4.Afranchisorshallperformallwarrantyobligations,includingrecallnotices;
43includeinwrittennoticesoffranchisorrecallstonewmotorvehicleownersandfranchisees
44theexpecteddatebywhichnecessarypartsandequipmentwillbeavailabletofranchiseesfor
45thecorrectionofthedefects;andcompensateanyofthefranchiseesinthisstateforrepairs
46requiredbytherecall.Compensationforpartsandlaborforrecallrepairsshallbedetermined
47under[subsection2]theprovisionsofthissection.
48 [4.]5.Nofranchisorshallrequireafranchiseetosubmitaclaimauthorizedunderthis
49sectionsoonerthanthirtydaysafterthefranchiseecompletesthe[preparation,delivery,or]
50warrantyservice[authorizingtheclaimforpreparation,delivery,orwarrantyservice]. All
51claimsmadebyafranchiseeunderthissectionshallbepaidwithinthirtydaysaftertheir
52approval.Allclaimsshallbeeitherapprovedordisapprovedbythefranchisorwithinthirty
53daysaftertheirreceiptonaproperformgenerallyusedbythefranchisorandcontainingthe
54usuallyrequiredinformationtherein.Anyclaimsnotspecificallydisapprovedinwriting
HB412 2 55withinthirtydaysafterthereceiptoftheformshallbeconsidered[tobe]approvedand
56paymentshallbemadebythefranchisorwithinfifteendaysthereafter.Afranchiseeshall
57notberequiredtomaintaindefectivepartsformorethanthirtydaysaftersubmissionofa
58claim.
59 [5.]6.Afranchisorshallcompensatethefranchiseeforfranchisor-sponsoredsalesor
60servicepromotionevents,includingbutnotlimitedto,rebates,programs,oractivitiesin
61accordancewithestablishedwrittenguidelinesforsuchevents,programs,oractivities,which
62guidelinesshallbeprovidedtoeachfranchisee.
63 [6.]7.Nofranchisorshallrequireafranchiseetosubmitaclaimauthorizedunder
64[subsection5of]thissectionsoonerthanthirtydaysafterthefranchiseebecomeseligibleto
65submittheclaim.Allclaimsmadebyafranchisee[pursuanttosubsection5ofthissection]
66underthissubsectionforpromotionevents,includingbutnotlimitedtorebates,programs,
67oractivitiesshallbepaidwithintendaysaftertheirapproval.Allclaimsshallbeeither
68approvedordisapprovedbythefranchisorwithinthirtydaysaftertheirreceiptonaproper
69formgenerallyusedbythefranchisorandcontainingtheusuallyrequiredinformationtherein.
70Anyclaimnotspecificallydisapprovedinwritingwithinthirtydaysafterthereceiptofthis
71formshallbe[consideredtobe]deemedapprovedandpaymentshallbemadewithinfifteen
72days.
73 [7.]8.Incalculatingtheretailratecustomarilychargedbythefranchiseeforparts,
74service,andlabor,thefollowingworkshallnotbeincludedinthecalculation:
75 (1)Repairsforfranchisor,manufacturer,ordistributorspecialevents,specials,or
76promotionaldiscountsforretailcustomerrepairs;
77 (2)Partssoldatwholesale;
78 (3)Engineassembliesandtransmissionassemblies;
79 (4)Routinemaintenancenotcoveredunderanyretailcustomerwarranty,suchas
80fluids,filters,andbeltsnotprovidedinthecourseofrepairs;
81 (5)Nuts,bolts,fasteners,andsimilaritemsthatdonothaveanindividualpart
82number;
83 (6)Tires;and
84 (7)Vehiclereconditioning.
85 [8.]9.Ifafranchisor,manufacturer,importer,ordistributorfurnishesapartor
86componenttoafranchisee,atnocost,touseinperformingrepairsunderarecall,campaign
87serviceaction,orwarrantyrepair,thefranchisorshallcompensatethefranchiseeforthepart
88orcomponentin[thesamemanneraswarrantypartscompensationunderthissectionby
89compensatingthefranchiseeattheaveragemarkuponthecostforthepartorcomponentas
90listedinthepricescheduleofthefranchisor,manufacturer,importer,ordistributor,lessthe
91costforthepartorcomponent] anamountthatisreasonable,andtheprimaryfactorin
HB412 3 92determiningreasonablecompensationforpartsunderthissubsectionshallbethe
93amountchargedbythefranchiseeforsimilarpartstoretailcustomersfornonwarranty
94repairparts. Thissubsectionshallnotapplytoentireengineassemblies,propulsionengine
95assemblies,includingelectricvehiclebatteries,orentiretransmissionassemblies.
96 [9.]10.Afranchisorshallnotrequireafranchiseetoestablishtheretailrate
97customarilychargedbythefranchiseeforparts,service,orlaborbyanundulyburdensomeor
98time-consumingmethodorbyrequiringinformationthatisundulyburdensomeortime
99consumingtoprovide,including,butnotlimitedto,part-by-partortransaction-by-transaction
100calculations.Afranchiseeshallnotrequestafranchisortoapproveadifferentlaborrateor
101partsratemorethantwiceinonecalendaryear.
102 [10.]11.Ifafranchiseesubmitsanyclaimunderthissectiontoafranchisorthatis
103incomplete,inaccurate,orlackinganyinformationusuallyrequiredbythefranchisor,thenthe
104franchisorshallpromptlynotifythefranchisee,andthetimelimittosubmittheclaimshallbe
105extendedforareasonablelengthoftime,notlessthanfivebusinessdaysfollowingnoticeby
106thefranchisortothefranchisee,forthefranchiseetoprovidethecomplete,accurate,or
107lackinginformationtothefranchisor.
108 [11.]12.(1)Afranchisormayonlyauditwarranty,sales,orincentiveclaimsand
109charge-backtothefranchiseeunsubstantiatedclaimsforaperiodoftwelvemonthsfollowing
110payment,subjecttoalloftheprovisionsofthissection.Furthermore,ifthefranchisorhas
111goodcausetobelievethatafranchiseehassubmittedfraudulentclaims,thenthefranchisor
112mayonlyauditsuspectedfraudulentwarranty,sales,orincentiveclaimsandcharge-backto
113thefranchiseefraudulentclaimsforaperiodoftwoyearsfollowingpayment,subjecttoall
114provisionsofthissection.
115 (2)Afranchisorshallnotrequiredocumentationforwarranty,sales,orincentive
116claimsmorethantwelvemonthsaftertheclaimwaspaid.
117 (3)Priortorequiringanycharge-back,reimbursement,orcreditagainstafuture
118transactionarisingoutofanaudit,thefranchisorshallsubmitwrittennoticetothefranchisee
119alongwithacopyofitsauditandthedetailedreasonforeachintendedcharge-back,
120reimbursement,orcredit.
121 [12.] 13.Afranchiseemayfileacomplaintwiththeadministrativehearing
122commissionpursuanttosection407.822withinsixtydaysafterreceiptofanywrittennotice
123byafranchisorofanyadversedecisiononanyclaimforreimbursementsubmittedpursuantto
124thissection,including,butnotlimitedto,specificclaimsforreimbursementinindividual
125warrantyrepairtransactions,andrequestsforanincreaseinlabororpartsrate.Ifacomplaint
126isfiledwithinthesixtydays,thenthedenialorreductionofreimbursement,denialofa
127requestforanincreaseinlabororpartsrate,charge-back,orotherdeterminationbya
128franchisorwhichisadversetoafranchiseeshallbestayedpendingahearingand
HB412 4 129determinationofthematterundersection407.822.Thefranchisorshallfileananswertothe
130complaintwithinthirtydaysafterserviceofthecomplaint.If,followingahearingwhich
131shallbeheldwithinsixtydaysfollowingserviceofthefranchisor'sanswer,theadministrative
132hearingcommissiondeterminesthatafranchisorhasviolatedanyrequirementsofthis
133section,thenthedenialorreductionofreimbursement,denialofarequestforanincreasein
134labororpartsrate,orcharge-backshallbevoidandthefranchisorshall,withinfifteendaysof
135thecommission'sorder,fairlycompensatethefranchiseeasrequiredbytheprovisionsofthis
136section.Section407.835shallapplytoproceedingspursuanttothissection.
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