STATE OF NEW YORK ________________________________________________________________________ 4066--A 2023-2024 Regular Sessions IN ASSEMBLY February 9, 2023 ___________ Introduced by M. of A. BURGOS, SILLITTI, GALLAGHER, FAHY, BRAUNSTEIN, CLARK, FALL, SEPTIMO, MAMDANI, RIVERA, DURSO, MILLER, LUNSFORD, DARLING, SANTABARBARA, DeSTEFANO, J. A. GIGLIO, SMITH, K. BROWN -- read once and referred to the Committee on Transportation -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the vehicle and traffic law, in relation to requiring motor vehicle dealer franchisors to fully compensate franchised motor vehicle dealers for warranty service agreements The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 1 of section 465 of the vehicle and traffic 2 law, as amended by chapter 26 of the laws of 2014, is amended to read as 3 follows: 4 1. Every franchisor shall properly fulfill any warranty agreement 5 and/or franchisor's service contract, including but not limited to all 6 warranty repairs, extended warranty repairs, factory compensated 7 repairs, recalls, diagnostics, parts and other voluntary stop-sell 8 repairs, and shall compensate each of its franchised motor vehicle deal- 9 ers for all warranty [parts and labor], recall, diagnostic labor oper- 10 ations and parts where applicable in amounts [which reflect reasonable 11 compensation for such work] equal to the applicable labor time guide 12 utilized for retail customer paid labor operations by a franchised motor 13 vehicle dealer. In no event shall such compensation fail to include full 14 compensation for diagnostic work, as well as repair service, labor, and 15 parts. Additionally, if a technician is required to communicate with a 16 technical assistance center, engineering or some external manufacturer 17 source in order to provide a warranty repair, the manufacturer shall pay 18 for the time from start of communications (including hold time) until 19 the communication is complete. All warranty claims and/or claims under a 20 franchisor's service contract made by franchised motor vehicle dealers EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02112-03-3
A. 4066--A 2 1 shall be paid within thirty days following their approval. For diagnosis 2 work, parts reimbursement, other than components, systems, fixtures, 3 appliances, furnishings, accessories and features of a house coach that 4 are designed, used and maintained primarily for nonvehicular residential 5 purposes, and for labor reimbursement, reasonable compensation shall not 6 be less than the price and rate charged by the franchised motor vehicle 7 dealer for like services to non-warranty and/or non-service contract 8 customers. In the event that a time guide has not been agreed to for 9 warranty repairs, or said time guide does not define time for an appli- 10 cable warranty repair, the franchisor's time guide shall be used, multi- 11 plied by one and one-half. For purposes of this section, the price and 12 rate charged by the franchised motor vehicle dealer for parts may be 13 established by submitting to the franchisor one hundred sequential 14 nonwarranty customer-paid service repair orders or the number of sequen- 15 tial nonwarranty customer-paid service repair orders written within a 16 ninety day period, whichever is less, covering repairs made no more than 17 one hundred eighty days before the submission, and declaring the price 18 and rate, including average markup for the franchised motor vehicle 19 dealer as its reimbursement rate. The reimbursement rate so declared 20 shall go into effect thirty days following the declaration and shall be 21 presumed to be reasonable, however a franchisor may rebut such presump- 22 tion by showing that such rate so established is unreasonable in light 23 of the practices of all other franchised motor vehicle dealers in the 24 vicinity offering the same line make. The franchised motor vehicle deal- 25 er shall not request a change in the reimbursement rate more often than 26 once in each calendar year. In establishing the labor reimbursement 27 rate, the franchisor shall not require a franchised motor vehicle dealer 28 to establish said rate by a methodology, or by requiring information, 29 that is unduly burdensome or time consuming to provide, including, but 30 not limited to, a transaction by transaction calculation. For the 31 purposes of this section, the following parts or types of repairs shall 32 be excluded from the parts and/or labor calculations and the 33 franchisor's reimbursement requirements under this section: (a) parts 34 sold at wholesale; (b) tires; (c) routine maintenance not covered under 35 any retail customer warranty such as fluids, filters and belts not 36 provided in the course of repairs; (d) vehicle reconditioning; and (e) 37 batteries replaced as part of a routine maintenance operation. If the 38 franchisor rejects the declaration or attempts to rebut the declaration 39 because of an error in the dealer's submission, the franchisor shall 40 identify with specificity the reason for rejection and identify the 41 error or errors within the submission. In the event the franchisor 42 rejects or rebuts the dealer's initial declaration, the dealer shall 43 have the opportunity, within sixty days to resubmit the full and 44 corrected declaration addressing the alleged error or errors identified 45 by the franchisor. The franchisor shall respond within sixty days. The 46 one hundred eighty day requirement for the repair orders shall be stayed 47 from the date of initial submission. In any action or proceeding held 48 pursuant to this subdivision, the franchisor shall have the burden of 49 proving that the rate declared by the dealer was unreasonable as 50 described in this subdivision and that the proposed adjustment of the 51 average percentage markup or rejection of the submission is reasonable 52 pursuant to the provisions of this subdivision. No debit reduction or 53 charge back of any item on a warranty repair order shall be made absent 54 a finding of fraud or illegal actions by the dealer. No franchisor 55 shall impose any form of cost recovery fees or surcharges against a 56 franchised motor vehicle dealer for payments made in accordance with
A. 4066--A 3 1 this subdivision. There shall be no reduction in payments under this 2 subdivision due to preestablished market norms or market averages. 3 Franchisors are prohibited from establishing restrictions or limitations 4 of customer repair frequency due to failure rate indexes or national 5 failure averages. A warranty claim timely made shall not be deemed 6 invalid solely because unavailable parts cause additional use and mile- 7 age on the vehicle. If a franchisor imposes a recall or stop sale on 8 any new vehicle in a franchised motor vehicle dealer's inventory that 9 prevents the sale of the vehicle, the franchisor shall compensate the 10 motor vehicle dealer for any interest and storage until the vehicle is 11 repaired and made ready for sale. 12 § 2. This act shall take effect immediately.