Virginia 2023 Regular Session Status: Enacted

HB 1469 — Motor vehicle dealers; franchise agreements, sale or lease of new motor vehicles.

Last action — Acts of Assembly Chapter text (CHAP0310)

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed House of Delegates
  4. ✓
    Passed Senate
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced December 29, 2022. Enacted.

Signed by Governor Glenn Youngkin (Republican) on March 23, 2023.

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Advancing 38% · moderate confidence

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    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

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    Failed 5 recorded votes so far — a real headwind.

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Bill Text

What changed in the latest version

693 added · 662 removed

Plain-language change summary

The amended text clarifies that it is unlawful for various entities involved in the distribution of motor vehicles to conduct certain coercive actions against dealers, especially in relation to the acceptance of unordered vehicles or parts. It specifically prohibits coercion to accept deliveries, enter agreements, or modify participation in incentive programs based on threats or unfair practices. This change matters because it establishes clear legal protections for dealers, aiming to prevent unfair treatment and practices by manufacturers and distributors.

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SESSION ENROLLED VIRGINIA ACTS OF ASSEMBLY –– CHAPTER E An Act to amend and reenact §§ 46.2-1569, 46.2-1571, and 46.2-1572 of the Code of Virginia, relating to motor vehicle dealers;
VIRGINIA ACTS OF ASSEMBLY -- 2023 SESSION CHAPTER 310 An Act to amend and reenact §§ 46.2-1569, 46.2-1571, and 46.2-1572 of the Code of Virginia, relating to motor vehicle dealers;
R O [H 1469] Approved L L Be it enacted by the General Assembly of Virginia:
[H 1469] Approved March 23, 2023 Be it enacted by the General Assembly of Virginia:
That §§ 46.2-1569, 46.2-1571, and 46.2-1572 of the Code of Virginia are amended and reenacteE as follows:
That §§ 46.2-1569, 46.2-1571, and 46.2-1572 of the Code of Virginia are amended and reenacted as follows:
D franchises;
§ 46.2-1569.
delivery of vehicles, parts, and accessories.t, succession to and cancellation of dealer Notwithstanding the terms of any franchise agreement, it shall be unlawful for any manufacturer, factory branch, distributor, distributor branch, or affiliate, or any field representative, officer, agent, or their representatives to do any of the following.
Other coercion of dealers;
It shall further be unlawful for any manufacturer, factory branch, distributor, distributor branch, or any field representative, officer, agent, or their representatives to engage in conduct prohibited under this section through an affiliate.
transfer, grant, succession to and cancellation of dealer franchises;
delivery of vehicles, parts, and accessories.
Notwithstanding the terms of any franchise agreement, it shall be unlawful for any manufacturer, factory branch, distributor, distributor branch, or affiliate, or any field representative, officer, agent, or factory branch, distributor, distributor branch, or any field representative, officer, agent, or their representatives to engage in conduct prohibited under this section through an affiliate.
To coerce or attempt to coerce any dealer to accept delivery of any motor vehicle or vehiHles, parts or accessories therefor, or any other commodities, which have not been ordered by the dea1er.
To coerce or attempt to coerce any dealer to accept delivery of any motor vehicle or vehicles, parts or accessories therefor, or any other commodities, which have not been ordered by the dealer.
factory branch, distributor, or distributor branch, or representative thereof by threat to take or by taking any action in violation of the chapter, or by any other act unfair or injurious to the dealer, including the threat to withhold any incentive payments in whole or in part or to deny the dealer the right to participate in an incentive program in which more than one of the dealers of the line-make in the Commonwealth are eligible to participate and under the same terms as such other dealers.
2.
Nothing contained in this section shall require that a dealer be qualified for or entitled to incentive payments or the right to payments or benefits from an incentive program, nor will a manufacturer, factory branch, distributor, or distributor branch be prohibited from informing a dealer thereof, unless the dealer meets such payments or benefits reasonably established by the manufacturer, factory branch, distributor, or for distributor branch, or as otherwise provided in this article.
To coerce or attempt to coerce any dealer to enter into an agreement with the manufacturer, factory branch, distributor, or distributor branch, or representative thereof by threat to take or by taking any action in violation of the chapter, or by any other act unfair or injurious to the dealer, including the threat to withhold any incentive payments in whole or in part or to deny the dealer the right to participate in an incentive program in which more than one of the dealers of the line-make in the Commonwealth are eligible to participate and under the same terms as such other dealers.
Nothing contained in this section shall require that a dealer be qualified for or entitled to incentive payments or the right to payments or benefits from an incentive program, nor will a manufacturer, factory branch, distributor, or distributor branch be prohibited from informing a dealer thereof, unless the dealer meets all qualifications and performs all applicable requirements and meets all of the applicable standards for such payments or benefits reasonably established by the manufacturer, factory branch, distributor, or distributor branch, or as otherwise provided in this article.
provided, however, that the described in clauses (i), (ii), and (iii) of this subdivision, mutatis mutandis.
provided, however, that the provisions of § 46.2-1572.3 related to the good faith settlement of disputes shall apply to the agreements described in clauses (i), (ii), and (iii) of this subdivision, mutatis mutandis.
To coerce or require any dealer to establish in connection with the sale of a motor vehicle prices at which the dealer shall sell products or services not manufactured or distributed by the manufacturer, factory branch, distributor, or distributor branch, whether by agreement, program, incentive provision, or oth2c.
To coerce or require any dealer to establish in connection with the sale of a motor vehicle prices at which the dealer shall sell products or services not manufactured or distributed by the manufacturer, factory branch, distributor, or distributor branch, whether by agreement, program, incentive provision, or otherwise.
2c.
If a manufacturer, factory branch, distributor, or distributor branch offers incentives, or other payments under a program offered after the effective date of this subdivision and available to more than one dealer in the Commonwealth that are premised wholly or in part on dealer facility improvements or installation of franchisor signs or other image elements required by or approved by the manufacturer, factory branch, distributor, or distributorr branch and completed within the 10 years preceding the program shall be deemed to be in compliance of 12 with the program requirements pertaining to construction of facilities or installation of signs or other franchisor image elements that would replace or substantially alter those previously constructed or installed within that 10-year period.
If a manufacturer, factory branch, distributor, or distributor branch offers incentives, or other payments under a program offered after the effective date of this subdivision and available to more than one dealer in the Commonwealth that are premised wholly or in part on dealer facility improvements or installation of franchisor signs or other franchisor image elements, a dealer that constructed improvements or installed signs or other franchisor image elements required by or approved by the manufacturer, factory branch, distributor, or distributor branch and completed within the 10 years preceding the program shall be deemed to be in compliance with the program requirements pertaining to construction of facilities or installation of signs or other franchisor image elements that would replace or substantially alter those previously constructed or of 11 installed within that 10-year period.
(v) reserves the right to offer or negotiate directly with the retail buyers or lessees in connection with and at the time of sale of a new of 12 motor vehicle the sale of any service contract, vehicle maintenance agreement, guaranteed asset protection (GAP) agreement or waiver, or other vehicle-related products and services that are oEherwise offered by the dealer;
(v) reserves the right to offer or negotiate directly with the retail buyers or lessees in connection with and at the time of sale of a new motor vehicle the sale of any service contract, vehicle maintenance agreement, guaranteed asset protection (GAP) agreement or waiver, or other vehicle-related products and services that are otherwise offered by the dealer;
however, a manufacturer, factory branch, distributor, or distributor branch may communicate or negotiate and finalize agreements with vehicle owners or lessees directly concerning any accessory or function of a vehicle that may be initiated, updated, changed, or maintained bR the manufacturer, factory branch, distributor, or distributor branch through over-the-air or remote means if subdivision B 10 of § 46.2-1571;
however, a manufacturer, factory branch, distributor, or distributor branch may communicate or negotiate and finalize agreements with vehicle owners or lessees directly concerning any accessory or function of a vehicle that may be initiated, updated, changed, or maintained by the of 11 manufacturer, factory branch, distributor, or distributor branch through over-the-air or remote means if the manufacturer, factory branch, distributor, or distributor branch complies with the requirements of subdivision B 10 of § 46.2-1571;
or (vi) designates dealers to be only delivery agents for new motorof vehicles the binding terms of sale or lease of which are negotiated directly between the manufacturer, factory branch, distributor, or distributor branch and the retail buyers or lessees of the new motor vehicles.
or (vi) designates dealers to be only delivery agents for new motor vehicles the binding terms of sale or lease of which are negotiated directly between the manufacturer, factory branch, distributor, or distributor branch and the retail buyers or lessees of the new motor vehicles.
Notwithstanding the foregoing provisions of thisEsubsection, a manufacturer, factory branch, distributor, or distributor branch may engage in fleet sales with a fleet customer that has a designation as such by the manufacturer, factory branch, distributor, or distributor branch because it has purchased or leased or has committed to purchase or lease five or more vehicles under the fleet program.
Notwithstanding the foregoing provisions of this subsection, a manufacturer, factory branch, distributor, or distributor branch may engage in fleet sales with a fleet customer that has a designation as such by the manufacturer, factory branch, distributor, or distributor branch because it has purchased or leased or has committed to purchase or lease five or more vehicles under the fleet program.
Nothing in this section shall limit a manufacturer, factory branch, distributor, or 3.
Nothing in this section shall limit a manufacturer, factory branch, distributor, or distributor branch from setting or advertising a manufacturer's suggested retail price.
To prevent or refuse to approve the sale or transfer of the ownership of a dealership by the sale of the business, stock transfer, or otherwise, or the transfer, sale, or assignment of a dealer franchise, or a change in the executive management or principal operator of the dealership, unless the franchisor provides written notice to the dealer of its objection and the reasons therefor by certified maHl or overnight delivery or other method designed to ensure delivery to the dealer at least 30 days prior to the proposed effective date of the transfer, sale, assignment, or change.
3.
No such objection shall b4 sufficient unless the failure to approve is reasonable.
To prevent or refuse to approve the sale or transfer of the ownership of a dealership by the sale of the business, stock transfer, or otherwise, or the transfer, sale, or assignment of a dealer franchise, or a change in the executive management or principal operator of the dealership, unless the franchisor provides written notice to the dealer of its objection and the reasons therefor by certified mail or overnight delivery or other method designed to ensure delivery to the dealer at least 30 days prior to the proposed effective date of the transfer, sale, assignment, or change.
Notwithstanding the provisions of subsection D of 9 § 46.2-1573, the only grounds that may be considered reasonable for a failure to approve are thRt an individual who is the applicant or is in control of an entity that is an applicant (i) lacks good moral character, (ii) lacks reasonable motor vehicle dealership management experience and qualifications, (iii) title to be a dealer.
No such objection shall be sufficient unless the failure to approve is reasonable.
No such objection shall be effective to prevent the sale, transfer, assignment, orhis change if the Commissioner has determined, if requested in writing by the dealer within 30 days after receipt of an objection to the proposed sale, transfer, or change, and after a hearing on the matter, that the failure to permit or honor the sale, transfer, assignment, or change is unreasonable under the circumstances.
Notwithstanding the provisions of subsection D of § 46.2-1573, the only grounds that may be considered reasonable for a failure to approve are that an individual who is the applicant or is in control of an entity that is an applicant (i) lacks good moral character, (ii) lacks reasonable motor vehicle dealership management experience and qualifications, (iii) lacks financial ability to be the dealer, or (iv) fails to meet the standards otherwise established by this title to be a dealer.
No such objection shall be effective to prevent the sale, transfer, assignment, or change if the Commissioner has determined, if requested in writing by the dealer within 30 days after receipt of an objection to the proposed sale, transfer, or change, and after a hearing on the matter, that the failure to permit or honor the sale, transfer, assignment, or change is unreasonable under the circumstances.
the sale of the business, stock transfer, or otherwise if the condition would violate the provisions of this title if imposed on the existing dealer.
3a.
To impose a condition on the approval of the sale or transfer of the ownership of a dealership by the sale of the business, stock transfer, or otherwise if the condition would violate the provisions of this title if imposed on the existing dealer.
If the Commissioner may order that the sale or transfer be approved by the manufacturer, factory branch,tion, the distributor, or distributor branch, without imposition of the condition.
If the Commissioner finds that the action or the imposition of the condition was a violation of this section, the Commissioner may order that the sale or transfer be approved by the manufacturer, factory branch, distributor, or distributor branch, without imposition of the condition.
The action may be commenced in the circuit court of the city or county in which the dealer is located, or in any other circuit court with permissible venue, within two years following the action or the imposition of the condition by the manufacturer, factory branch, distributor, or distributor branch for the damages suffered by the applicant or the dealer as a result of the violation or dealer's reasonable attorney fees and costs of litigation.
The action may be commenced in the circuit court of the city or county in which the dealer is located, or in any other circuit court with permissible venue, within two years following the action or the imposition of the condition by the manufacturer, factory branch, distributor, or distributor branch for the damages suffered by the applicant or the dealer as a result of the violation of this section by the manufacturer, factory branch, distributor, or distributor branch, plus the applicant's or dealer's reasonable attorney fees and costs of litigation.
Notwithstanding the foregoing, an exercise of's the right of first refusal by the manufacturer, factory branch, distributor, or distributor branch pursuant to of 12 § 46.2-1569.1 shall not be considered the imposition of a condition prohibited by this section.
Notwithstanding the foregoing, an exercise of the right of first refusal by the manufacturer, factory branch, distributor, or distributor branch pursuant to § 46.2-1569.1 shall not be considered the imposition of a condition prohibited by this section.
No such additional franchise may be established at the proposed site unless the Commissioner has determined, if requested by a dealer of the same line-make in the relevant market area within 30 days after receipt of the franchisor's notice of intention to establish the additional franchise, and after a hearing on the matter, that the franchisor can show by a preponderance of the evidence that after the grant of the new franchise, the relevant market area will support all of the dealers in that line-make in the relevant market area.
No such additional franchise may be established at the proposed site unless the Commissioner has determined, if requested by a dealer of the same line-make in the relevant market area within 30 days after receipt of the franchisor's notice of intention to establish the additional franchise, and after a hearing on the matter, that the franchisor can show by a preponderance of the evidence that after the grant of the new of 11 franchise, the relevant market area will support all of the dealers in that line-make in the relevant market area.
of 12 c.
c.
E d.
d.
The change or discontinuance of a marketing or distribution system of a particular line-make product by a manufacturer or distributor, while the name identification of the product is continued in Rubstantial form by the same or a different manufacturer or distributor, may be considered to be a franchise discontinuances made after January 1, 1989, but they shall not be considered by any court in any case in which such a change or discontinuance occurring prior to that date has been challenged as constituting a termination, cancellation or nonrenewal.
The change or discontinuance of a marketing or distribution system of a particular line-make product by a manufacturer or distributor, while the name identification of the product is continued in substantial form by the same or a different manufacturer or distributor, may be considered to be a franchise termination, cancellation, or nonrenewal.
The provisions of this paragraph shall apply to changes and discontinuances made after January 1, 1989, but they shall not be considered by any court in any case in which such a change or discontinuance occurring prior to that date has been challenged as constituting a termination, cancellation or nonrenewal.
To fail to provide continued parts and service support to a dealer which holds a franchise in a discontinued line-make for at least five years from the date of such discontinuance.
To fail to provide continued parts and service support to a dealer which holds a franchise in a of 11 discontinued line-make for at least five years from the date of such discontinuance.
This requiEement shall not apply to a line-make which was discontinued prior to January 1, 1989.
This requirement shall not apply to a line-make which was discontinued prior to January 1, 1989.
Upon the involuntary or voluntary termination, nonrenewal, or cancellation of the franchise of any dealer, by either the manufacturer, distributor, or factory branch or by the dealer, notwithstanding the terms of any franchise whether entered into before or after the enactment of this section, to fail to pay(1) The dealer cost plus any charges by the franchisor for distribution, delivery, and taxes paid by the dealer, less all allowances paid to the dealer by the franchisor, for new and undamaged motor vehicles in the dealer's inventory acquired from the franchisor or from another dealer of the same line –– make in the ordinary course of business within 18 months of termination;
Upon the involuntary or voluntary termination, nonrenewal, or cancellation of the franchise of any dealer, by either the manufacturer, distributor, or factory branch or by the dealer, notwithstanding the terms of any franchise whether entered into before or after the enactment of this section, to fail to pay the dealer for at least the following:
H (2) The dealer cost as shown in the price catalog of the franchisor current at the time of repurchase of each new, unused, undamaged, and unsold part or accessory if such part or accessory is in th4 current parts catalog and is still in the original, resalable merchandising package and in unbroken lot9, except that in the case of sheet metal, a comparable substitute for the original package may be used;
(1) The dealer cost plus any charges by the franchisor for distribution, delivery, and taxes paid by the dealer, less all allowances paid to the dealer by the franchisor, for new and undamaged motor vehicles in the dealer's inventory acquired from the franchisor or from another dealer of the same line –– make in the ordinary course of business within 18 months of termination;
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R (3) The fair market value of each undamaged sign owned by the dealer that bears a trademark, trade name or commercial symbol used or claimed by the franchisor if such sign was purchased from or at the(4) The fair market value of all special tools and automotive service equipment owned by the dealer that were recommended and designated as special tools or equipment by the franchisor, if the tools and equipment are in usable and good condition, normal wear and tear excepted;
(2) The dealer cost as shown in the price catalog of the franchisor current at the time of repurchase of each new, unused, undamaged, and unsold part or accessory if such part or accessory is in the current parts catalog and is still in the original, resalable merchandising package and in unbroken lots, except that in the case of sheet metal, a comparable substitute for the original package may be used;
(3) The fair market value of each undamaged sign owned by the dealer that bears a trademark, trade name or commercial symbol used or claimed by the franchisor if such sign was purchased from or at the request of the franchisor;
(4) The fair market value of all special tools and automotive service equipment owned by the dealer that were recommended and designated as special tools or equipment by the franchisor, if the tools and equipment are in usable and good condition, normal wear and tear excepted;
For purposes of this subdivision, a voluntary termination shall not include the transfer of the terminating dealer's franchised business in connection with a transfer of that business by means of sale of 5c.
For purposes of this subdivision, a voluntary termination shall not include the transfer of the terminating dealer's franchised business in connection with a transfer of that business by means of sale of the equity ownership or assets thereof to another dealer.
5c.
In determining the dealer holds a franchise in the dealership facilities, the dealer shall also be entitled to compensation for the contribution of the line-make to payment of the rent or to covering obligation for the fair rental value of the dealership facilities for the period set forth in subdivision 5c (2).
In determining the fair market value of a franchise for a line-make, if the line-make is not the only line-make for which the dealer holds a franchise in the dealership facilities, the dealer shall also be entitled to compensation for the contribution of the line-make to payment of the rent or to covering obligation for the fair rental value of the dealership facilities for the period set forth in subdivision 5c (2).
(i) the manufacturer, distributor, or factory branch shall pay the dealer a sum equivalent to the rent for the unexpired term of the lease or three years' rent, whichever is the lesser, or (ii) if the dealer owns the dealership facilities, the manufacturer, dealership facilities for three years.ay the dealer a sum equivalent to the reasonable rental value of the To be entitled to facilities assistance from the manufacturer, distributor, or factory branch, the dealer of 12 shall have the obligation to mitigate damages by listing the dealership facilities for lease or sublease with a licensed real estate agent within 30 days after the effective date of the termination of the franchise and thereafter by reasonably cooperating with such real estate agent in the performance of the agent's duties and responsibilities.
(i) the manufacturer, distributor, or factory branch shall pay the dealer a sum equivalent to the rent for the unexpired term of the lease or three years' rent, whichever is the lesser, or (ii) if the dealer owns the dealership facilities, the manufacturer, distributor, or factory branch shall pay the dealer a sum equivalent to the reasonable rental value of the dealership facilities for three years.
To be entitled to facilities assistance from the manufacturer, distributor, or factory branch, the dealer shall have the obligation to mitigate damages by listing the dealership facilities for lease or sublease with a licensed real estate agent within 30 days after the effective date of the termination of the franchise and thereafter by reasonably cooperating with such real estate agent in the performance of the agent's duties and responsibilities.
It shall be unlawful to prevent or refuse to honor the succession to a dealership by a member of the family of a deceased or incapacitated dealer if the franchisor has not provided to the member of the family designated the dealer's successor written notice of its objections to the succession and of such person's right to seek a hearing on the matter before the Commissioner pursuant to this article, and the Commissioner determines, if requested in writing by such member of the family within 30 days of receipt of such notice from the franchisor, and after a hearing on the matter before the Commissioner pursuant to this article, that the failure to permit or honor the succession is unreasonable under the circumstances.
It shall be unlawful to prevent or refuse to honor the succession to a dealership by a member of the family of a deceased or incapacitated dealer if the franchisor has not of 11 provided to the member of the family designated the dealer's successor written notice of its objections to the succession and of such person's right to seek a hearing on the matter before the Commissioner pursuant to this article, and the Commissioner determines, if requested in writing by such member of the family within 30 days of receipt of such notice from the franchisor, and after a hearing on the matter before the Commissioner pursuant to this article, that the failure to permit or honor the succession is unreasonable under the circumstances.
of 12 7d.
7d.
To fail to provide a notice to a dealer when notifying it of the requirement to purchase goods or services from a vendor selected, identified, or designated by a manufacturer, factory branch, dEstributor, or distributor branch of the dealer's rights pursuant to subdivision 7c.
To fail to provide a notice to a dealer when notifying it of the requirement to purchase goods or services from a vendor selected, identified, or designated by a manufacturer, factory branch, distributor, or distributor branch of the dealer's rights pursuant to subdivision 7c.
To fail to provide to a dealer, when the manufacturer, factory branch, distributor, or distributor branch claims that a vendor chosen by the dealer cannot supply goods and services of substantiaRly similar quality, a disclosure concerning the vendor selected, identified, or designated by the franchisor affiliates, or any officer, director, or employee of the same, has an ownership interest, actual ors beneficial, in the vendor and, if so, the percentage of the ownership interest and (ii) whether the manufacturer, factory branch, distributor, distributor branch, or one of its affiliates has an agreement or arrangement by which the vendor pays to the manufacturer, factory branch, distributor, distributor branch, or one of its affiliates, or any officer, director, or employee of the same, any compenEation and, if so, the basis and amount of the compensation to be paid as a result of any purchases by the dealer, whether it is to be paid by direct payment by the vendor or by credit from the vendor for the benefit of the recipient.
To fail to provide to a dealer, when the manufacturer, factory branch, distributor, or distributor branch claims that a vendor chosen by the dealer cannot supply goods and services of substantially similar quality, a disclosure concerning the vendor selected, identified, or designated by the franchisor stating (i) whether the manufacturer, factory branch, distributor, distributor branch, or one of its affiliates, or any officer, director, or employee of the same, has an ownership interest, actual or beneficial, in the vendor and, if so, the percentage of the ownership interest and (ii) whether the manufacturer, factory branch, distributor, distributor branch, or one of its affiliates has an agreement or arrangement by which the vendor pays to the manufacturer, factory branch, distributor, distributor branch, or one of its affiliates, or any officer, director, or employee of the same, any compensation and, if so, the basis and amount of the compensation to be paid as a result of any purchases by the dealer, whether it is to be paid by direct payment by the vendor or by credit from the vendor for the benefit of the recipient.
To fail to provide to a dealer, if the goods and services to be supplied to the dealer by a vendor are signs or other franchisor image elements to be leased to the dealer, the right to purchase the signs or other franchisor image elements of like kind and quality from a vendor selected by the dealer.
To fail to provide to a dealer, if the goods and services to be supplied to the dealer by a vendor selected, identified, or designated by the manufacturer, factory branch, distributor, or distributor branch of 11 are signs or other franchisor image elements to be leased to the dealer, the right to purchase the signs or other franchisor image elements of like kind and quality from a vendor selected by the dealer.
If the vendor selected by the manufacturer, factory branch, distributor, or distributor branch is the only available vendor, the dealer must be given the opportunity to purchase the signs or other francHisor image elements at a price substantially similar to the capitalized lease costs thereof.
If the vendor selected by the manufacturer, factory branch, distributor, or distributor branch is the only available vendor, the dealer must be given the opportunity to purchase the signs or other franchisor image elements at a price substantially similar to the capitalized lease costs thereof.
This subdivision shall not be construed to allow a dealer to impair or eliminate the intellectual property right4 of the manufacturer, factory branch, distributor, or distributor branch, nor to permit a dealer to ere9t or maintain signs that do not conform to the intellectual property usage guidelines of the manufacRurer, factory branch, distributor, or distributor branch.
This subdivision shall not be construed to allow a dealer to impair or eliminate the intellectual property rights of the manufacturer, factory branch, distributor, or distributor branch, nor to permit a dealer to erect or maintain signs that do not conform to the intellectual property usage guidelines of the manufacturer, factory branch, distributor, or distributor branch.
To include in any franchise with a motor vehicle dealer terms that are contrary to, prohibited by, or 8a.
To include in any franchise with a motor vehicle dealer terms that are contrary to, prohibited by, or otherwise inconsistent with the requirements of this chapter.
8a.
To include in any franchise agreement or similar agreement governing the sales, leasing, or service of new motor vehicles, or to enforce or seek to enforce in such franchise agreement or similar amend the franchise agreement or similar agreement.
To include in any franchise agreement or similar agreement governing the sales, leasing, or service of new motor vehicles, or to enforce or seek to enforce in such franchise agreement or similar agreement, a right for the manufacturer, factory branch, distributor, or distributor branch to unilaterally amend the franchise agreement or similar agreement.
Any amendment to a franchise agreement oro unilaterally similar agreement governing the sales, leasing, or service of new vehicles must be agreed by both the manufacturer, factory branch, distributor, or distributor branch and the dealer at the time the franchise agreement or similar agreement is to be amended.
Any amendment to a franchise agreement or similar agreement governing the sales, leasing, or service of new vehicles must be agreed by both the manufacturer, factory branch, distributor, or distributor branch and the dealer at the time the franchise agreement or similar agreement is to be amended.
(i) the right of the franchisor to manufacture or distribute the line-make of vehicles covered by the dealer's franchise is sold, assigned, or otherwise transferred by the manufacturer, factory branch, distributor, or distributor manufacturer, factory branch, distributor, or distributor branch of its affiliate fails for any reason to exercise its right of first refusal to purchase the assets or ownership of the business of the dealer when given the opportunity to do so by virtue of its franchise agreement, another agreement, or as set forth in § 46.2-1569.
(i) the right of the franchisor to manufacture or distribute the line-make of vehicles covered by the dealer's franchise is sold, assigned, or otherwise transferred by the manufacturer, factory branch, distributor, or distributor branch to another;
(ii) the final termination of the dealer's franchise for any reason;
or (iii) the manufacturer, factory branch, distributor, or distributor branch of its affiliate fails for any reason to exercise its right of first refusal to purchase the assets or ownership of the business of the dealer when given the opportunity to do so by virtue of its franchise agreement, another agreement, or as set forth in § 46.2-1569.
To require or coerce a motor vehicle dealer, whether by agreement, program, incentive provision, or otherwise, to submit or to provide a manufacturer, factory branch, distributor, or distributor branch dealer's chosen policies and processes for complying with obligations to protect consumer data undere laws of the United States or the Commonwealth or (ii) through franchisor access to the computer of 12 database of the dealer if the dealer chooses to submit data specified by the franchisor.
To require or coerce a motor vehicle dealer, whether by agreement, program, incentive provision, or otherwise, to submit or to provide a manufacturer, factory branch, distributor, or distributor branch access to consumer data maintained by the dealer (i) by any method that violates or would violate the dealer's chosen policies and processes for complying with obligations to protect consumer data under laws of the United States or the Commonwealth or (ii) through franchisor access to the computer database of the dealer if the dealer chooses to submit data specified by the franchisor.
It shall not constitute a violation of this subdivision for a manufacturer, factory branch, distributor, or distributor branch to require a motor vehicle dealer to provide data (a) concerning a new motor vehicle sale or used motor vehicle sale under a manufacturer certification program, (b) to validate a customer or dealer incentive, (c) to calculate dealer or market sales or evaluate service performance or customer satisfaction to facilitate analysis of product quality and market feedback, (d) to facilitate warranty service work on a vehicle, (e) concerning information with respect to recall repairs or information about a recalled vehicle, (f) pursuant to a mutual agreement between a manufacturer, factory branch, distributor, or distributor branch and a dealer, or (g) where consumer data is reasonably necessary to enable a manufacturer, factory branch, distributor, or distributor branch to provide programs, products, or services to a dealer.
It shall not constitute a violation of this subdivision for a manufacturer, factory branch, distributor, or distributor branch to require a motor vehicle dealer to provide data (a) concerning a new motor vehicle sale or used motor vehicle sale under a manufacturer certification program, (b) to validate a customer or dealer incentive, (c) to calculate dealer or market sales or evaluate service performance or customer satisfaction to facilitate analysis of product quality and market feedback, (d) to facilitate warranty service of 11 work on a vehicle, (e) concerning information with respect to recall repairs or information about a recalled vehicle, (f) pursuant to a mutual agreement between a manufacturer, factory branch, distributor, or distributor branch and a dealer, or (g) where consumer data is reasonably necessary to enable a manufacturer, factory branch, distributor, or distributor branch to provide programs, products, or services to a dealer.
Increases in dealer recall or warranty parts and service compensation and diagnostic work compensation, pursuant to this section, shall be requested by the dealer in writing, shall be based on 100 of 12 consecutive repair orders or all repair orders over a 90-day period, whichever occurs first.
Increases in dealer recall or warranty parts and service compensation and diagnostic work compensation, pursuant to this section, shall be requested by the dealer in writing, shall be based on 100 consecutive repair orders or all repair orders over a 90-day period, whichever occurs first.
E Compensation for parts shall be stated as a percentage of markup that shall be uniformly applied to all the manufacturer's or distributor's parts.
Compensation for parts shall be stated as a percentage of markup that shall be uniformly applied to all the manufacturer's or distributor's parts.
N 4.
4.
In the case of recall or warranty parts compensation, the provisions of this subsection sRall be effective only for model year 1992 and succeeding model years.
In the case of recall or warranty parts compensation, the provisions of this subsection shall be effective only for model year 1992 and succeeding model years.
performing work for which the manufacturer or distributor is required to compensate the dealer under in this section, the manufacturer or distributor shall compensate the dealer for the part in the same manner as recall or warranty parts compensation, less the wholesale costs, for such part as listed in the manufacturer's current price schedules.
5.
A manufacturer or distributor may pay the dealer a reasonable handling fee instead of the compensation otherwise required by this subsection for special E high-performance complete engine assemblies in limited production motor vehicles that constitute less than five percent of model production furnished to the dealer at no cost, if the manufacturer or distributor excludes such special high-performance complete engine assemblies in determining whether the amounts requested by the dealer for recall or warranty compensation are consistent with the amounts work.the dealer charges its other retail service customers for parts used by the dealer to perform similar 6.
If a manufacturer or distributor furnishes a part to a dealer at no cost for use by the dealer in performing work for which the manufacturer or distributor is required to compensate the dealer under this section, the manufacturer or distributor shall compensate the dealer for the part in the same manner as recall or warranty parts compensation, less the wholesale costs, for such part as listed in the manufacturer's current price schedules.
In the case of service work, manufacturer original parts or parts otherwise specified by the manufacturer or distributor, and parts provided by a dealer either pursuant to an adjustment program as defined in § 59.1-207.34 or as otherwise requested by the manufacturer or distributor, the dealHr shall be compensated in the same manner as for recall or warranty service or parts.
A manufacturer or distributor may pay the dealer a reasonable handling fee instead of the compensation otherwise required by this subsection for special high-performance complete engine assemblies in limited production motor vehicles that constitute less than five percent of model production furnished to the dealer at no cost, if the manufacturer or distributor excludes such special high-performance complete engine assemblies in determining whether the amounts requested by the dealer for recall or warranty compensation are consistent with the amounts that the dealer charges its other retail service customers for parts used by the dealer to perform similar work.
B This section does not apply to compensation for parts such as components, systems, fixtures,4 appliances, furnishings, accessories, and features that are designed, used, and maintained prim9rily for nonvehicular, residential purposes.
6.
Recall, warranty, and sales incentive audits of dealer recoRds may be conducted by the manufacturer, factory branch, distributor, or distributor branch on a reasonable basis, and dealer claims for recall, warranty, or sales incentive compensation shall not be denied except for misrepresentation.
In the case of service work, manufacturer original parts or parts otherwise specified by the manufacturer or distributor, and parts provided by a dealer either pursuant to an adjustment program as defined in § 59.1-207.34 or as otherwise requested by the manufacturer or distributor, the dealer shall be compensated in the same manner as for recall or warranty service or parts.
This section does not apply to compensation for parts such as components, systems, fixtures, of 11 appliances, furnishings, accessories, and features that are designed, used, and maintained primarily for nonvehicular, residential purposes.
Recall, warranty, and sales incentive audits of dealer records may be conducted by the manufacturer, factory branch, distributor, or distributor branch on a reasonable basis, and dealer claims for recall, warranty, or sales incentive compensation shall not be denied except for good cause, such as performance of nonwarranty repairs, lack of material documentation, fraud, or misrepresentation.
The manufacturer, factory the validity of all such paid claims for dealer compensation.
The manufacturer, factory branch, distributor, or distributor branch shall reserve the right to reasonable periodic audits to determine the validity of all such paid claims for dealer compensation.
Any chargebacks for recall or warrantydetermine parts or service compensation and service incentives shall only be for the six-month period immediately following the date of the claim and, in the case of chargebacks for sales compensation only, for the six-month period immediately following the date of claim.
Any chargebacks for recall or warranty parts or service compensation and service incentives shall only be for the six-month period immediately following the date of the claim and, in the case of chargebacks for sales compensation only, for the six-month period immediately following the date of claim.
A dealer shall not be charged back or otherwise liable for sales franchised motor vehicle dealer and subsequently exported or resold, unless the manufacturer, factorysed, branch, distributor, or distributor branch can demonstrate by a preponderance of the evidence that the dealer should have known of and did not exercise due diligence in discovering the purchaser's intention to export or resell the motor vehicle.
A dealer shall not be charged back or otherwise liable for sales incentives or charges related to a motor vehicle sold by the dealer to a purchaser other than a licensed, franchised motor vehicle dealer and subsequently exported or resold, unless the manufacturer, factory branch, distributor, or distributor branch can demonstrate by a preponderance of the evidence that the dealer should have known of and did not exercise due diligence in discovering the purchaser's intention to export or resell the motor vehicle.
Fail to include in written notices of factory recalls to vehicle owners and dealers the expected date by 4.
Fail to include in written notices of factory recalls to vehicle owners and dealers the expected date by which necessary parts and equipment will be available to dealers for the correction of defects;
Fail to compensate any of the motor vehicle dealers licensed in the Commonwealth for repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer where the carrier of 12 is designated by the manufacturer, factory branch, distributor, or distributor branch;
4.
Fail to compensate any of the motor vehicle dealers licensed in the Commonwealth for repairs effected by the dealer of merchandise damaged in manufacture or transit to the dealer where the carrier is designated by the manufacturer, factory branch, distributor, or distributor branch;
Deny any dealer the right to return any part or accessory that the dealer has not sold within 12 months where the part or accessory was not obtained through a specific order initiated by the dealer but instead was specified for, sold to and shipped to the dealer pursuant to an automated ordering system, provided that such part or accessory is in the condition required for return to the manufacturer, factory branch, distributor, or distributor branch, and the dealer returns the part within 30 days of it becoming eligible under this subdivision.
Deny any dealer the right to return any part or accessory that the dealer has not sold within 12 months where the part or accessory was not obtained through a specific order initiated by the dealer but of 11 instead was specified for, sold to and shipped to the dealer pursuant to an automated ordering system, provided that such part or accessory is in the condition required for return to the manufacturer, factory branch, distributor, or distributor branch, and the dealer returns the part within 30 days of it becoming eligible under this subdivision.
of 12 Whenever a new motor vehicle is damaged in transit, when the carrier or means of transportation is determined by the manufacturer or distributor, or whenever a motor vehicle is otherwise damagedEprior to delivery to the new motor vehicle dealer, the new motor vehicle dealer shall:
Whenever a new motor vehicle is damaged in transit, when the carrier or means of transportation is determined by the manufacturer or distributor, or whenever a motor vehicle is otherwise damaged prior to delivery to the new motor vehicle dealer, the new motor vehicle dealer shall:
Notify the manufacturer or distributor of the damage within three business days from the date of delivery of the new motor vehicle to the new motor vehicle dealership or within the additional Rime specified in the franchise;
Notify the manufacturer or distributor of the damage within three business days from the date of delivery of the new motor vehicle to the new motor vehicle dealership or within the additional time specified in the franchise;
and accessories damaged or otherwise correct the damage, unless the damage to the vehicle exceeds the three percent rule, in which case the dealer may reject the vehicle within three business days.
and 2.
L E.
Request from the manufacturer or distributor authorization to replace the components, parts, and accessories damaged or otherwise correct the damage, unless the damage to the vehicle exceeds the three percent rule, in which case the dealer may reject the vehicle within three business days.
If the manufacturer or distributor refuses or fails to authorize correction of such damage within 10 days after receipt of notification, or if the dealer rejects the vehicle because damage exceeds the three percent rule, ownership of the new motor vehicle shall revert to the manufacturer or distributoE, and the new motor vehicle dealer shall have no obligation, financial or otherwise, with respect to such motor vehicle.
E.
If the manufacturer or distributor refuses or fails to authorize correction of such damage within 10 days after receipt of notification, or if the dealer rejects the vehicle because damage exceeds the three percent rule, ownership of the new motor vehicle shall revert to the manufacturer or distributor, and the new motor vehicle dealer shall have no obligation, financial or otherwise, with respect to such motor vehicle.
If there is less than three percent damage, not require a disclosure.
If there is less than three percent damage, no disclosure is required, provided the damage has been corrected.
Predelivery mechanical work shall not require a disclosure.
In case of revocation pursuaHt to this section, the dealer shall accept the vehicle and refund any payments made to the dealer inB connection with the transaction, less a reasonable allowance for the consumer's use of the vehi4le as defined in § 59.1-207.11.
In case of revocation pursuant to this section, the dealer shall accept the vehicle and refund any payments made to the dealer in connection with the transaction, less a reasonable allowance for the consumer's use of the vehicle as defined in § 59.1-207.11.
Nothing in this section shall be construed to exempt from the provisi9ns of this section damage to a new motor vehicle that occurs following delivery of the vehicle to theRdealer.
Nothing in this section shall be construed to exempt from the provisions of this section damage to a new motor vehicle that occurs following delivery of the vehicle to the dealer.
If there is a dispute between the manufacturer, factory branch, distributor, or distributor branch and the dealer with respect to any matter referred to in subsection A, B, or C, either party may petition the other, for a hearing.
If there is a dispute between the manufacturer, factory branch, distributor, or distributor branch and the dealer with respect to any matter referred to in subsection A, B, or C, either party may petition the Commissioner in writing, within 30 days after either party has given written notice of the dispute to the other, for a hearing.
The decision of the Commissioner shall be binding on the parties, subject to to rights of judicial review and appeal as provided in Chapter 40 (§ 2.2-4000 et seq.) of Title 2.2.
The decision of the Commissioner shall be binding on the parties, subject to of 11 rights of judicial review and appeal as provided in Chapter 40 (§ 2.2-4000 et seq.) of Title 2.2.
A manufacturer, factory branch, distributor, or distributor branch may not collect chargebacks, fully or in part, either through direct payment or by charge to the dealer's account, for recall or warranty parts or service compensation, including service incentives, sales incentives, other sales compensation, surcharges, fees, penalties, or any financial imposition of any type arising from an alleged failure of the dealer to comply with a policy of, directive from, or agreement with the manufacturer, factory branch, distributor, or distributor processes of the manufacturer, factory, factory branch, distributor, or distributor branch.
A manufacturer, factory branch, distributor, or distributor branch may not collect chargebacks, fully or in part, either through direct payment or by charge to the dealer's account, for recall or warranty parts or service compensation, including service incentives, sales incentives, other sales compensation, surcharges, fees, penalties, or any financial imposition of any type arising from an alleged failure of the dealer to comply with a policy of, directive from, or agreement with the manufacturer, factory branch, distributor, or distributor branch until 40 days following final notice of the amount charged to the dealer following all internal processes of the manufacturer, factory, factory branch, distributor, or distributor branch.
It shall be unlawful for any motor vehicle manufacturer, factory branch, distributor, distributor branch, or subsidiary thereof, to own, operate, or control any motor vehicle dealership in the new line-make established by a manufacturer, factory branch, distributor, or distributor branch, licensed as such by the Department, or a subsidiary thereof or a company affiliated through ownership of the manufacturer, factory branch, distributor, or distributor branch of at least 25 percent of the equity of the company.
It shall be unlawful for any motor vehicle manufacturer, factory branch, distributor, distributor branch, or subsidiary thereof, to own, operate, or control any motor vehicle dealership in the Commonwealth.
This prohibition includes the ownership, operation, or control of any dealership of a new line-make established by a manufacturer, factory branch, distributor, or distributor branch, licensed as such by the Department, or a subsidiary thereof or a company affiliated through ownership of the manufacturer, factory branch, distributor, or distributor branch of at least 25 percent of the equity of the company.
distributor branch, or subsidiary thereof, if the manufacturer, factory branch, distributor, distributorr, branch, or subsidiary has been engaged in the retail sale of motor vehicles through the dealership for a of 12 continuous period of three years prior to July 1, 1972, and if the Commissioner determines, after a hearing on the matter at the request of any party, that there is no dealer independent of the manufacturer or distributor, factory branch or distributor branch, or subsidiary thereof available in the community to own and operate the franchise in a manner consistent with the public interest;
3.
The ownership, operation, or control of a dealership by a manufacturer, factory branch, distributor, distributor branch, or subsidiary thereof, if the manufacturer, factory branch, distributor, distributor branch, or subsidiary has been engaged in the retail sale of motor vehicles through the dealership for a continuous period of three years prior to July 1, 1972, and if the Commissioner determines, after a hearing on the matter at the request of any party, that there is no dealer independent of the manufacturer or distributor, factory branch or distributor branch, or subsidiary thereof available in the community to own and operate the franchise in a manner consistent with the public interest;
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Action History

  1. Acts of Assembly Chapter text (CHAP0310)

  2. Approved by Governor-Chapter 310 (effective 7/1/23)

  3. Governor's Action Deadline 11:59 p.m., March 27, 2023

  4. Enrolled Bill communicated to Governor on February 27, 2023

  5. Signed by President

  6. Signed by Speaker

  7. Impact statement from DPB (HB1469ER)

  8. Bill text as passed House and Senate (HB1469ER)

  9. Enrolled

  10. Passed Senate (38-Y 0-N)

  11. Read third time

  12. Read second time

  13. Reported from Transportation (15-Y 0-N)

  14. Impact statement from DPB (HB1469E)

  15. Referred to Committee on Transportation

  16. Constitutional reading dispensed

  17. VOTE: Block Vote Passage (100-Y 0-N)

  18. Read third time and passed House BLOCK VOTE (100-Y 0-N)

  19. Engrossed bill reprinted 23101626D-E

  20. Printed as engrossed 23101626D-E

  21. Engrossed by House as amended HB1469E

  22. Committee amendments agreed to

  23. Read second time

  24. Read first time

  25. Reported from Transportation with amendment(s) (20-Y 0-N)

  26. Subcommittee recommends reporting with amendments (8-Y 0-N)

  27. House subcommittee amendments and substitutes offered

  28. Impact statement from DPB (HB1469)

  29. Assigned Transportation sub: Subcommittee #1 Department of Motor Vehicles

  30. Referred to Committee on Transportation

  31. Prefiled and ordered printed; offered 01/11/23 23101626D

Sponsors

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1 sponsors · 0 co-sponsors · 147 not signed on

Sponsors (1)

Co-sponsors (0)

None.

Not signed on (147)

147 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Frequently asked questions

Who sponsors HB 1469?
HB 1469 is sponsored by James A. "Jay" Leftwich.
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This bill has been enacted into law. Introduced December 29, 2022. Enacted.
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