North Carolina 2021-2022 Session Status: In Committee 2 R cosponsors

HB 649 — Clarify Motor Vehicle Franchise Laws.

Last action — Passed 1st Reading

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

This bill died with 2021-2022 Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Bill Text

What changed in the latest version

167 added · 166 removed

Plain-language change summary

The amendment to Bill HB 649 clarifies the process that franchisors must follow if they object to a dealer's proposed transfer, sale, or changes in management. Specifically, franchisors must provide a detailed notice of objection within 30 days and can only base their objections on specific factual and legal grounds. This change helps ensure transparency and fairness in the dealer-franchisor relationship by limiting the reasons for objections, which may prevent frivolous claims and protect dealers' rights.

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GENERAL ASSEMBLY OF NORTH CAROLINA H.B.
GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2021 H 1 HOUSE BILL 649 Short Title:
649 Apr 22, 2021 SESSION 2021 HOUSE PRINCIPAL CLERK H D HOUSE BILL DRH30180-MW-68B Short Title:
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
A BILL TO BE ENTITLED AN ACT TO REVISE AND CLARIFY THE LAWS GOVERNING NEW MOTOR VEHICLE DEALER FRANCHISES.
Transportation, if favorable, Rules, Calendar, and Operations of the House April 26, 2021 A BILL TO BE ENTITLED AN ACT TO REVISE AND CLARIFY THE LAWS GOVERNING NEW MOTOR VEHICLE DEALER FRANCHISES.
The Ifthe franchisor objects to the proposed transfer,sale, assignment, relocation, or change, the franchisor shall send the dealership and the proposed transferee notice of objection, by registered or certified mail, return receipt requested, to the proposed transfer, sale, assignment, *DRH30180-MW-68B* General Assembly Of North Carolina Session 2021 relocation, or change within 30 days after receipt of notice from the dealer, as provided in this section.
The If the franchisor objects to the proposed transfer,sale, assignment, relocation, or change, the franchisor shall send the dealership and the proposed transferee notice of objection, byregistered or certified mail, *H649-v-1* General Assembly Of North Carolina Session 2021 return receipt requested, to the proposed transfer, sale, assignment, relocation, or change within 30 days after receipt of notice from the dealer, as provided in this section.
An objection to a proposed transfer, sale, assignment, relocation, or change in the executive management or principal operator of the dealership or change in the use of the facility may only be premised upon the factual and legal bases specifically referenced in this subdivision or G.S.
An objection to a proposed transfer, sale, assignment, relocation, or change in the executive management or principal operator of the dealership or change in the use of the facilitymayonlybe premised upon the factual and legal bases specifically referenced in this subdivision or G.S.
With respect to a proposed transfer of ownership, sale, or assignment, the sole issue for determination by the Commissioner and the sole issue upon which the Commissioner shall hear or consider evidence is Page 2 DRH30180-MW-68B General Assembly Of North Carolina Session 2021 whether, by reason of lack of good moral character, lack of general business experience, or lack of financial ability, the proposed transferee is unfit to own the dealership.
With respect to a proposed transfer of ownership, sale, or assignment, the sole issue for determination by the Commissioner and the sole Page 2 House Bill 649-First Edition General Assembly Of North Carolina Session 2021 issue upon which the Commissioner shall hear or consider evidence is whether, by reason of lack of good moral character, lack of general business experience, or lack of financial ability, the proposed transferee is unfit to own the dealership.
For purposes of this subdivision, the refusal by the manufacturer to accept a proposed transferee who is of good moral character and who otherwise meets thewritten,reasonable,anduniformlyappliedbusinessexperienceand financial requirements, if any, required by the manufacturer of owners of its franchised automobile dealerships is presumed to demonstrate the manufacturer's failure to prove that the proposed transferee is unfit to own the dealership.
For purposes of this subdivision, the refusal by the manufacturer to accept a proposed transferee who is of good moral character and who otherwise meets thewritten,reasonable,anduniformlyappliedbusinessexperienceand financial requirements, if any, required bythe manufacturer of owners of its franchised automobile dealerships is presumed to demonstrate the manufacturer's failure to prove that the proposed transferee is unfit to own the dealership.
For purposes of this subdivision, the refusal by the manufacturer to agree to a proposed relocation which meets the written, reasonable, and uniformly applied standards or criteria, if any, of the manufacturer relating to dealer relocations is presumed to demonstrate that the manufacturer'sfailuretoprovetheproposedrelocationisunreasonable under the circumstances.
For purposes of this subdivision, the refusal by the manufacturer to agree to a proposed relocation which meets the written, reasonable, and uniformlyapplied standards or criteria, if any, of the manufacturer relating to dealer relocations is presumed to demonstrate that the manufacturer'sfailuretoprovetheproposedrelocationisunreasonable under the circumstances.
DRH30180-MW-68B Page 3 General Assembly Of North Carolina Session 2021 1.
House Bill 649-First Edition Page 3 General Assembly Of North Carolina Session 2021 1.
Page 4 DRH30180-MW-68B General Assembly Of North Carolina Session 2021 "(7) Notwithstanding the terms of any contract or agreement, to prevent or refuse to honor the succession to a dealership, including the franchise, by a motor vehicle dealer's designated successor as provided for under this subsection.
Page 4 House Bill 649-First Edition General Assembly Of North Carolina Session 2021 "(7) Notwithstanding the terms of any contract or agreement, to prevent or refuse to honor the succession to a dealership, including the franchise, by a motor vehicle dealer's designated successor as provided for under this subsection.
Within 60 days after the death or incapacity of the owner or principal operator, a designated successor appointed in substantial compliance with this section shall give the affected manufacturer or distributor written notice of his or her succession to the position of owner or DRH30180-MW-68B Page 5 General Assembly Of North Carolina Session 2021 principal operator of the new motor vehicle dealership;
Within 60 days after the death or incapacity of the owner or principal operator, a designated successor appointed in substantial compliance with this section shall give the affected manufacturer or distributor written notice of his or her succession to the position of owner or House Bill 649-First Edition Page 5 General Assembly Of North Carolina Session 2021 principal operator of the new motor vehicle dealership;
This section does not preclude an owner of a new motor vehicle dealership from designating any person as his or her successor by written instrument filed with the manufacturer or distributor, and, in the event there is an inconsistency between the successor named in such written instrument and the designated successor otherwise appointed by the owner consistent with the provisions of this section, and that written instrument has not been revoked by the owner of the new motor vehicle dealership in writing to the manufacturer or distributor, then the written instrument filed with the manufacturer or Page 6 DRH30180-MW-68B General Assembly Of North Carolina Session 2021 distributor shall govern as to the appointment of the successor.
This section does not preclude an owner of a new motor vehicle dealership from designating any person as his or her successor by written instrument filed with the manufacturer or distributor, and, in the event there is an inconsistency between the successor named in such written instrument and the designated successor otherwise appointed by the owner consistent with the provisions of this section, and that written instrument has not been revoked by the owner of the new motor vehicle dealership in writing to the manufacturer or distributor, then the written instrument filed with the manufacturer or Page 6 House Bill 649-First Edition General Assembly Of North Carolina Session 2021 distributor shall govern as to the appointment of the successor.
20-305(4)or(ii)purchasing, entering into anoption to purchase, or complying with any subjective standards or asserting any legal or equitable rights relating to the franchise.
20-305(4)or(ii)purchasing, enteringintoanoption to purchase, or complying with anysubjective standards or asserting anylegal or equitable rights relating to the franchise.
Upon the occurrence of the change, the Division shall deny an application of a manufacturer, factory branch, distributor, or distributor branch for a license or license renewal unless the applicant for a license as a manufacturer, factory branch, distributor, or distributor branch offers to each motor vehicle dealer who is a party to a franchise for that line make line-make, without any separate or additional fee or charge, a new franchise agreement containing substantially the same provisions which were contained in the previous franchise agreement or files an affidavit with the Division acknowledging its undertaking to assume and fulfill fulfill, without any separate or additionalfee or chargeto its dealers, therights, duties, and obligations of its predecessor under the previous franchise agreement.
Upon the occurrence of the change, the Division shall deny an application of a manufacturer, factory branch, distributor, or distributor branch for a license or license renewal unless the applicant for a license as a manufacturer, factory branch, distributor, or distributor branch offers to each motor vehicle dealer who is a partyto a franchise for that line make line-make, without any separate or additional fee or charge, a new franchise agreement containing substantially the same provisions which were contained in the previous franchise agreement or files an affidavit with the Division acknowledging its undertaking to assume and fulfill fulfill, without anyseparate or additionalfee or chargeto its dealers, therights, duties, and obligations of its predecessor under the previous franchise agreement.
Should the Division fail to deny an application following the change, as required by this subsection, the Division shall then deny any subsequent renewal of such license until such time as the DRH30180-MW-68B Page 7 General Assembly Of North Carolina Session 2021 manufacturer, factory branch, distributor, or distributor branch offers to each motor vehicle dealer who is a party to a franchise for that line-make a new franchise agreement on substantially the same provisionswhichwerecontainedinthepreviousfranchiseagreement." SECTION 2.(b) G.S.
Should the Division fail to deny an application following the change, as required bythis subsection, the Division shall then deny any subsequent renewal of such license until such time as the House Bill 649-First Edition Page 7 General Assembly Of North Carolina Session 2021 manufacturer, factory branch, distributor, or distributor branch offers to each motor vehicle dealer who is a party to a franchise for that line-make a new franchise agreement on substantially the same provisionswhichwerecontainedinthepreviousfranchiseagreement." SECTION 2.(b) G.S.
"(9) To require, coerce, or attempt to coerce any new motor vehicle dealer in this State to purchase or lease a specific dealer management computer system for communication with the manufacturer, factory branch, distributor, or distributor branch or any computer hardware or software used for any purpose other than the maintenance or repair of motor vehicles, to participate monetarily in an advertising campaign or contest, or to purchase unnecessary or unreasonable quantities of any promotional materials, training materials, training programs, showroom or other display decorations, materials, computer equipment or programs, or special tools at the expense of the new motor vehicle dealer, provided that nothing in this subsection shall preclude a manufacturer or distributor from including an unitemized uniform charge in the base price of the new motor vehicle charged to the dealer where such charge is attributable to advertising costs incurred or to be incurred by the manufacturer or distributor in the ordinary courses of its business.
"(9) To require, coerce, or attempt to coerce any new motor vehicle dealer in this State to purchase or lease a specific dealer management computer system for communication with the manufacturer, factory branch, distributor, or distributor branch or anycomputer hardware or software used for anypurpose other than the maintenance or repair of motor vehicles, to participate monetarily in an advertising campaign or contest, or to purchase unnecessary or unreasonable quantities of any promotional materials, training materials, training programs, showroom or other display decorations, materials, computer equipment or programs, or special tools at the expense of the new motor vehicle dealer, provided that nothing in this subsection shall preclude a manufacturer or distributor from including an unitemized uniform charge in the base price of the new motor vehicle charged to the dealer where such charge is attributable to advertising costs incurred or to be incurred by the manufacturer or distributor in the ordinary courses of its business.
Notwithstanding the terms or conditions of any franchise or other agreement, policy, or incentive program, it is unlawful for any manufacturer or distributor to require, coerce, or attempt to coerce any of its franchised dealers in this State to either (i) purchase or lease any electric vehicle charging stations at the dealer's expense unless the dealer is actually offering for sale to the public or providing warranty service on electric vehicles manufactured or distributed by that manufacturer or distributor or (ii) purchase or lease, at the dealer's expense, more than one electric vehicle charging station per dealership location owned by the dealer.
Notwithstanding the terms or conditions of any franchise or other agreement, policy, or incentive program, it is unlawful for any manufacturer or distributor to require, coerce, or attempt to coerce any of its franchised dealers in this State to either (i) purchase or lease anyelectric vehicle charging stations at the dealer's expense unless the dealer is actually offering for sale to the public or providing warranty service on electric vehicles manufactured or distributed by that manufacturer or distributor or (ii) purchase or lease, at the dealer's expense, more than one electric vehicle charging station per dealership location owned by the dealer.
Notwithstanding the terms or conditions of any franchise or other agreement, policy, or incentive program, it is unlawful for any manufacturer or distributor to require that any of its franchised dealers in this State purchase or lease any diagnostic equipment or tool for the maintenance, servicing, or repair of electric vehicles if the dealer has other diagnostic equipment or tools available that can perform the work to the standards required by the applicable manufacturer or distributor.
Notwithstanding the terms or conditions of any franchise or other agreement, policy, or incentive program, it is unlawful for any manufacturer or distributor to require that anyof its franchised dealers in this State purchase or lease any diagnostic equipment or tool for the maintenance, servicing, or repair of electric vehicles if the dealer has other diagnostic equipment or tools available that can perform the work to the standards required bythe applicable manufacturer or distributor.
Notwithstanding the terms or conditions of any franchise or other agreement, a franchised dealer that sells fewer than 250 new motor vehicles peryearmayrequestapprovalfromthemanufacturertoenterintoatoolloaner agreement with another dealer, in lieu of purchasing or leasing any special tools required by any manufacturer, factory branch, distributor, or distributor branch, provided, however, that all of the following conditions are satisfied:
Notwithstanding the terms or conditions of any franchise or other agreement, a franchised dealer that sells fewer than 250 new motor vehicles per yearmayrequestapprovalfromthemanufacturertoenterintoatoolloaner agreement with another dealer, in lieu of purchasing or leasing any special tools required by any manufacturer, factory branch, distributor, or distributor branch, provided, however, that all of the following conditions are satisfied:
– Any motor propelled vehicle, regardless of the size and type of motor, source of power, or mode of operation, trailer or semitrailer, Page 8 DRH30180-MW-68B General Assembly Of North Carolina Session 2021 required to be registered under the laws of this State.
– Any motor propelled vehicle, regardless of the size and type of motor, source of power, or mode of operation, trailer or semitrailer, Page 8 House Bill 649-First Edition General Assembly Of North Carolina Session 2021 required to be registered under the laws of this State.
"(9) To require, coerce, or attempt to coerce any new motor vehicle dealer in this State to purchase or lease a specific dealer management computer system for communication with the manufacturer, factory branch, distributor, or distributor branch or any computer hardware or software used for any purpose other than the maintenance or repair of motor vehicles, to participate monetarily in an advertising campaign or contest, to purchase off-lease or other pre-owned vehicles either as a part of the franchise agreement or as a part of an incentive program, or to purchase unnecessary or unreasonable quantities of any promotional materials, training materials, training programs, showroom or other display decorations, materials, computer equipment or programs, or special tools at the expense of the new motor vehicle dealer, provided that nothing in this subsection shall preclude a manufacturer or distributor from including an unitemized uniform charge in the base price of the new motor vehicle charged to the dealer where such charge is attributable to advertising costs incurred or to be incurred by the manufacturer or distributor in the ordinary courses of its business.
"(9) To require, coerce, or attempt to coerce any new motor vehicle dealer in this State to purchase or lease a specific dealer management computer system for communication with the manufacturer, factory branch, distributor, or distributor branch or anycomputer hardware or software used for anypurpose other than the maintenance or repair of motor vehicles, to participate monetarily in an advertising campaign or contest, to purchase off-lease or other pre-owned vehicles either as a part of the franchise agreement or as a part of an incentive program, or to purchase unnecessary or unreasonable quantities of anypromotional materials, training materials, training programs, showroom or other display decorations, materials, computer equipment or programs, or special tools at the expense of the new motor vehicle dealer, provided that nothing in this subsection shall preclude a manufacturer or distributor from including an unitemized uniform charge in the base price of the new motor vehicle charged to the dealer where such charge is attributable to advertising costs incurred or to be incurred by the manufacturer or distributor in the ordinary courses of its business.
Notwithstanding the terms or conditions of any franchise or other agreement, policy, or incentive program, it is unlawful for any manufacturer or distributor to require, coerce, or attempt to coerce any of its franchised dealers in this State to either (i) purchase or lease any electric vehicle charging stations at the dealer's expense unless the dealer is actually offering for sale to the public or providing warranty service on electric vehicles manufactured or distributed by that manufacturer or distributor or (ii) purchase or lease, at the dealer's expense, more than one electric vehicle charging station per dealership location owned by the dealer.
Notwithstanding the terms or conditions of any franchise or other agreement, policy, or incentive program, it is unlawful for any manufacturer or distributor to require, coerce, or attempt to coerce any of its franchised dealers in this State to either (i) purchase or lease anyelectric vehicle charging stations at the dealer's expense unless the dealer is actually offering for sale to the public or providing warranty service on electric vehicles manufactured or distributed by that manufacturer or distributor or (ii) purchase or lease, at the dealer's expense, more than one electric vehicle charging station per dealership location owned by the dealer.
Notwithstanding the terms or conditions of any franchise or other agreement, policy, or incentive program, it is unlawful for any manufacturer or distributor to require that any of its franchised dealers in this State purchase or lease any diagnostic equipment or tool for the maintenance, servicing or repair of electric vehicles if the dealer has other diagnostic equipment or tools available that can perform the work to the standards required by the applicable manufacturer or distributor.
Notwithstanding the terms or conditions of any franchise or other agreement, policy, or incentive program, it is unlawful for any manufacturer or distributor to require that anyof its franchised dealers in this State purchase or lease any diagnostic equipment or tool for the maintenance, servicing or repair of electric vehicles if the dealer has other diagnostic equipment or tools available that can perform the work to the standards required bythe applicable manufacturer or distributor.
Notwithstanding the terms or conditions of any franchise or other agreement, a franchised dealer that sells fewer than 250 new motor vehicles peryearmayrequestapprovalfromthemanufacturertoenterintoatoolloaner agreement with another dealer, in lieu of purchasing or leasing any special tools required by any manufacturer, factory branch, distributor, or distributor branch, provided, however, that all of the following conditions are satisfied:
Notwithstanding the terms or conditions of any franchise or other agreement, a franchised dealer that sells fewer than 250 new motor vehicles per yearmayrequestapprovalfromthemanufacturertoenterintoatoolloaner agreement with another dealer, in lieu of purchasing or leasing any special tools required by any manufacturer, factory branch, distributor, or distributor branch, provided, however, that all of the following conditions are satisfied:
…." DRH30180-MW-68B Page 9 General Assembly Of North Carolina Session 2021 SECTION 3.(b) G.S.
…." House Bill 649-First Edition Page 9 General Assembly Of North Carolina Session 2021 SECTION 3.(b) G.S.
"(12a) To require, coerce, or attempt to coerce any new motor vehicle dealer in this State to make any substantial alterations to the dealership premises or facilities, when to do so would be unreasonable, or without written assurance of a sufficient supply of new motor vehicles so as to justify such an expansion, in light of the current market and economic conditions." RELEASES/WAIVERS SECTION 5.
"(12a) To require, coerce, or attempt to coerce any new motor vehicle dealer in this State to make any substantial alterations to the dealership premises or facilities, when to do so would be unreasonable, or without written assurance of a sufficient supplyof new motor vehicles so as to justifysuch an expansion, in light of the current market and economic conditions." RELEASES/WAIVERS SECTION 5.
The specific wording of the dealer's release or waiver of rights does not cause the dealer to release or waive any rights the dealer may have underthis Article thatare not directlyrelatedto resolution ofanactual, active, and current claim or dispute between the dealer and manufacturer;
The specific wording of the dealer's release or waiver of rights does not cause the dealer to release or waive any rights the dealer may have underthis Article thatare not directlyrelatedto resolution ofan actual, active, and current claim or dispute between the dealer and manufacturer;
The dealer's release or waiver of rights would not require any dispute between the manufacturer and dealer related to its interpretation or eitheroftheparties'performanceorbreachto be referredto anyperson Page 10 DRH30180-MW-68B General Assembly Of North Carolina Session 2021 other than the duly constituted courts of the State or the United States of America, or to the Commissioner, if such referral would be binding upon the dealer;
The dealer's release or waiver of rights would not require any dispute between the manufacturer and dealer related to its interpretation or eitheroftheparties'performanceorbreachto be referredto anyperson Page 10 House Bill 649-First Edition General Assembly Of North Carolina Session 2021 other than the duly constituted courts of the State or the United States of America, or to the Commissioner, if such referral would be binding upon the dealer;
This subdivision shall be strictly construed, and a dealer's release or waiver of rights that fails to comply with any of the requirements or other provisions contained in sub-subdivisions a.throughf.
This subdivision shall be strictly construed, and a dealer's release or waiver of rights that fails to comply with any of the requirements or other provisions contained in sub-subdivisions a.through f.
"(14) To delay, refuse, or fail to deliver motor vehicles or motor vehicle parts or accessories in reasonable quantities relative to the new motor vehicle dealer's facilities and sales potential in the new motor vehicle dealer's market area as determined in accordance with reasonably applied economic principles, or within a reasonable time, after receipt of an order from a dealer having a franchise for the retail sale of any new motor vehicle sold or distributed by the manufacturer or distributor, any new vehicle, parts or accessories to new vehicles as are covered by such franchise, and such vehicles, parts or accessories as are publicly advertised as being available or actually being delivered.
"(14) To delay, refuse, or fail to deliver motor vehicles or motor vehicle parts or accessories in reasonable quantities relative to the new motor vehicle dealer's facilities and sales potential in the new motor vehicle dealer's market area as determined in accordance with reasonably applied economic principles, or within a reasonable time, after receipt of an order from a dealer having a franchise for the retail sale of anynew motor vehicle sold or distributed bythe manufacturer or distributor, any new vehicle, parts or accessories to new vehicles as are covered by such franchise, and such vehicles, parts or accessories as are publicly advertised as being available or actually being delivered.
The delivery to another dealer of a motor vehicle of the same model and similarly equipped as the vehicle ordered by a motor vehicle dealer who has not received delivery thereof, but who has placed his written order for the vehicle prior to the order of the dealer receiving the vehicle, shall be evidence of a delayed delivery of, or refusal to deliver, a new motor vehicle to a motor vehicle dealer within a reasonable time, without cause.
The deliveryto another dealer of a motor vehicle of the same model and similarly equipped as the vehicle ordered by a motor vehicle dealer who has not received delivery thereof, but who has placed his written order for the vehicle prior to the order of the dealer receiving the vehicle, shall be evidence of a delayed delivery of, or refusal to deliver, a new motor vehicle to a motor vehicle dealer within a reasonable time, without cause.
Provides each of its franchised dealers in this State an adequate supply of vehicles by series, product line, and model in a fair, reasonable, and equitable manner based on each dealer's historical selling pattern and reasonable sales standards as compared to other same line-make dealers in the State.planning potential.
Provides each of its franchised dealers in this State an adequate supply of vehicles byseries, product line, and model in a fair, reasonable, and equitable manner based on each dealer's historical selling pattern and reasonable sales standards as compared to other same line-make dealers in the State.planning potential.
If, during the immediately preceding 12 calendar months, a new motor vehicle dealer located in this State sold a total of 250 or fewer new motor vehicles manufactured or distributed by a particular manufacturer or distributor, that manufacturer or distributor shall be required to allocate to the dealer and deliver in a timely manner, monthly and on a model by model or series basis, no fewer than the number of new motor vehicles of each such model or series that dealer sold at retail during the immediately previous calendar month;
If, duringthe immediatelypreceding12 calendar months, a new motor vehicle dealer located in this State sold a total of 250 or fewer new motor vehicles manufactured or distributed by a particular manufacturer or distributor, that manufacturer or distributor shall be required to allocate to the dealer and deliver in a timely manner, monthly and on a model by model or series basis, no fewer than the number of new motor vehicles of each such model or series that dealer sold at retail during the immediately previous calendar month;
provided, however, that nothing contained in this subdivision or in any DRH30180-MW-68B Page 11 General Assembly Of North Carolina Session 2021 franchise shall prevent or prohibit any dealer from refusing to accept all or any portion of any allocation of vehicles made available to the dealer by the manufacturer or distributor pursuant to this subdivision.
provided, however, that nothingcontained in this subdivision or in any House Bill 649-First Edition Page 11 General Assembly Of North Carolina Session 2021 franchise shall prevent or prohibit any dealer from refusing to accept all or any portion of any allocation of vehicles made available to the dealer by the manufacturer or distributor pursuant to this subdivision.
This subsection is not violated, however, if such failure is caused solely by the occurrence of temporary international, national, or regional product shortages resulting from natural disasters, unavailability of parts, labor strikes, product recalls, and other factors and events beyond the control of the manufacturer that temporarily reduce a manufacturer's product supply.
This subsection is not violated, however, if such failure is caused solelybythe occurrence of temporary international, national, or regional product shortages resulting from natural disasters, unavailability of parts, labor strikes, product recalls, and other factors and events beyond the control of the manufacturer that temporarily reduce a manufacturer's product supply.
The willful or malicious maintenance, creation, or alteration of a vehicle allocation process orformulabyamanufacturer,factorybranch,distributor,ordistributorbranch that is in any part designed or intended to force or coerce a dealer in this State to close or sell the dealer's franchise, cause the dealer financial distress, or to relocate, update, or renovate the dealer's existing dealership facility shall constitute an unfair and deceptive trade practice under G.S.
The willful or malicious maintenance, creation, or alteration of a vehicle allocation process orformulabyamanufacturer,factorybranch,distributor,ordistributor branch that is in any part designed or intended to force or coerce a dealer in this State to close or sell the dealer's franchise, cause the dealer financial distress, or to relocate, update, or renovate the dealer's existing dealership facility shall constitute an unfair and deceptive trade practice under G.S.
If a manufacturer, factory branch, distributor, or distributor branch offers incentives, or other payments under a program that are in any part conditioned on a dealer's construction of a new Page 12 DRH30180-MW-68B General Assembly Of North Carolina Session 2021 facility, facility improvements, or installation of signs or other image elements,adealerthatconstructedanewfacility,madefacilityimprovements, or installed signs or other image elements required by or approved by the manufacturer that were completed at a cost of more than two hundred fifty thousand dollars ($250,000), indexed to the Consumer Price Index, within the preceding 10 years shall be deemed to be in compliance with the manufacturer's new or successor program requirements, and the dealer shall be entitled to receive all such incentives or other payments awardable under the new or successor program.
If a manufacturer, factory branch, distributor, or distributor branch offers incentives, or other payments under a program that are in any part conditioned on a dealer's construction of a new Page 12 House Bill 649-First Edition General Assembly Of North Carolina Session 2021 facility, facility improvements, or installation of signs or other image elements,adealerthatconstructedanewfacility,madefacilityimprovements, or installed signs or other image elements required by or approved by the manufacturer that were completed at a cost of more than two hundred fifty thousand dollars ($250,000), indexed to the Consumer Price Index, within the preceding 10 years shall be deemed to be in compliance with the manufacturer's new or successor program requirements, and the dealer shall be entitled to receive all such incentives or other payments awardable under the new or successor program.
The compensation paid under this section shall be reasonable, provided, however, that under no circumstances shall the reasonable compensation under this section for warranty and recall service be in an amount less than the dealer's current retail labor rate and the amount charged to retail customers for the manufacturer's or distributor's original parts for nonwarranty work of like kind, provided the amount is competitive with the retail rates charged for parts and labor by other franchised dealers of the same line-make located within the dealer's market.
The compensation paid under this section shall be reasonable, provided, however, that under no circumstances shall the reasonable compensation under this section for warranty and recall service be in an amount less than the dealer's current retail labor rate and the amount charged to retail customers for the manufacturer's or distributor's original parts for nonwarranty work of like kind, provided the amount is competitive with the retail rates charged for parts and labor byother franchised dealers of the same line-make located within the dealer's market.
DRH30180-MW-68B Page 13 General Assembly Of North Carolina Session 2021 (a1) The retail rate customarily charged by the dealer for parts and labor may be established at the election of the dealer by the dealer submittingto the manufacturer or distributor 100 sequential nonwarranty customer-paid service repair orders which contain warranty-like parts, or 60 consecutive days of nonwarranty customer-paid service repair orders which contain warranty-like parts, whichever is less, covering repairs made no more than 180 days before the submission and declaring the average percentage markup.
House Bill 649-First Edition Page 13 General Assembly Of North Carolina Session 2021 (a1) The retail rate customarily charged by the dealer for parts and labor may be established at the election of the dealer bythe dealer submitting to the manufacturer or distributor 100 sequential nonwarranty customer-paid service repair orders which contain warranty-like parts, or 60 consecutive days of nonwarranty customer-paid service repair orders which contain warranty-like parts, whichever is less, covering repairs made no more than 180 days before the submission and declaring the average percentage markup.
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The average of the parts markup rate and the average labor rate shall both be presumed to be reasonable, however, a manufacturer or distributor may, not later than 30 days after submission, rebut that presumption by reasonably substantiating that the rate is unfair and unreasonable in light of the retail rates charged for parts and labor by all other franchised motor vehicle dealers located in the dealer's market city or town offering the same line-make vehicles.
The average of the parts markup rate and the average labor rate shall both be presumed to be reasonable, however, a manufacturer or distributor may, not later than 30 days after submission, rebut that presumption by reasonably substantiating that the rate is unfair and unreasonable in light of the retail rates charged for parts and labor by all other franchised motor vehicle dealers located in the dealer's market cityor town offering the same line-make vehicles.
In the event there are no other franchised dealers offering the same line-make of vehicle in the dealer's market, city or town, the manufacturer or distributor may compare the dealer's retail rate for parts and labor with the retail rates charged for parts and laborby othersamesegment franchiseddealerswhoareselling competing line-makes ofvehicles within the dealer's market.
In the event there are no other franchised dealers offering the same line-make of vehicle in the dealer's market, cityor town, the manufacturer or distributor may compare the dealer's retail rate for parts and labor with the retail rates charged for parts and laborbyothersamesegment franchiseddealerswhoareselling competingline-makes ofvehicles within the dealer's market.
The retail rate and the average labor rate shall go into effect 30 days following the manufacturer's approval, but in noevent later than 60 days following the declaration, subject to audit of the submitted repair orders by the manufacturer or distributor and a rebuttal of the declared rate as described above.
The retail rate and the average labor rate shall go into effect 30 days following the manufacturer's approval, but in no event later than 60 days following the declaration, subject to audit of the submitted repair orders by the manufacturer or distributor and a rebuttal of the declared rate as described above.
In any hearing held pursuant to this subsection, the manufacturer or distributor shall havetheburden ofproving by apreponderanceoftheevidencethat theratedeclared by thedealer was unreasonable as described in this subsection and that the proposed adjustment of the average percentage markup is reasonable pursuant to the provisions of this subsection.
In anyhearing held pursuant to this subsection, the manufacturer or distributor shall havetheburden ofprovingbyapreponderanceoftheevidencethat theratedeclared bythedealer was unreasonable as described in this subsection and that the proposed adjustment of the average percentage markup is reasonable pursuant to the provisions of this subsection.
20-4.01(32b), at the prevailing retail rate according to the factors in subsection (a) of this section, or, in service in accordance with the schedule of compensation provided the dealer pursuant to subsection (a) of this section, or to otherwise recover all or any portion of its costs for compensating its motor vehicle dealers licensed in this State for warranty or recall parts and service or for payments for a qualifying used motor vehicle pursuant to subsections (i) and (j) of this section either by reduction in the amount due to the dealer, or by separate charge, surcharge, or other imposition, and to fail to indemnify and hold harmless its franchised dealers licensed in this State against any judgment for damages or settlements agreed to by the manufacturer, including, but not limited to, court costs and reasonable attorneys' fees of the motor vehicle dealer, arising out of complaints, claims or lawsuits including, but not limited to, strict liability, negligence, misrepresentation, express or Page 14 DRH30180-MW-68B General Assembly Of North Carolina Session 2021 implied warranty, or recision orrevocationof acceptanceofthe sale of a motorvehicle as defined in G.S.
20-4.01(32b), at the prevailing retail rate according to the factors in subsection (a) of this section, or, in service in accordance with the schedule of compensation provided the dealer pursuant to subsection (a) of this section, or to otherwise recover all or any portion of its costs for compensating its motor vehicle dealers licensed in this State for warranty or recall parts and service or for payments for a qualifying used motor vehicle pursuant to subsections (i) and (j) of this section either by reduction in the amount due to the dealer, or by separate charge, surcharge, or other imposition, and to fail to indemnify and hold harmless its franchised dealers licensed in this State against any judgment for damages or settlements agreed to by the manufacturer, including, but not limited to, court costs and reasonable attorneys' fees of the motor vehicle dealer, arising out of complaints, claims or lawsuits including, but not limited to, strict liability, negligence, misrepresentation, express or Page 14 House Bill 649-First Edition General Assembly Of North Carolina Session 2021 implied warranty, or recision orrevocationof acceptanceofthe sale of a motorvehicle as defined in G.S.
Notwithstanding the foregoing, a manufacturer shall not fail to fully compensate a dealer for warranty or recall work or make any chargeback to the dealer's account based on the dealer's failure to comply with the manufacturer's claim documentation procedure or procedures unless DRH30180-MW-68B Page 15 General Assembly Of North Carolina Session 2021 both of the following requirements have been met:if the dealer has documented by other reasonable means.
Notwithstanding the foregoing, a manufacturer shall not fail to fully compensate a dealer for warranty or recall work or make any chargeback to the dealer's account based on the dealer's failure to comply with the manufacturer's claim documentation procedure or procedures unless House Bill 649-First Edition Page 15 General Assembly Of North Carolina Session 2021 both of the following requirements have been met:if the dealer has documented by other reasonable means.
(1) The dealer has, within the previous 12 months, failed to comply with the same specific claim documentation procedure or procedures;
(1) The dealer has, within the previous 12 months, failed to complywith the same specific claim documentation procedure or procedures;
and (2) The manufacturer has, within the previous 12 months, provided a written warning to the dealer by certified United States mail, return receipt requested, identifying thespecificclaim documentationprocedureorprocedures violated by the dealer.
and (2) The manufacturer has, within the previous 12 months, provided a written warning to the dealer by certified United States mail, return receipt requested, identifyingthespecific claim documentationprocedureorprocedures violated by the dealer.
A manufacturer may further not charge a dealer back subsequent to the payment of the claim unless a representative of the manufacturer has met in person at the dealership, or by telephone, with an officer or employee of the dealer designated by the dealer and explained in detail the basis for each of the proposed charge-backs and thereafter given the dealer's representative a reasonable opportunity at the meeting, or during the telephone call, to explain the dealer's position relating to each of the proposed charge-backs.
A manufacturer mayfurther not charge a dealer back subsequent to the payment of the claim unless a representative of the manufacturer has met in person at the dealership, or by telephone, with an officer or employee of the dealer designated by the dealer and explained in detail the basis for each of the proposed charge-backs and thereafter given the dealer's representative a reasonable opportunity at the meeting, or during the telephone call, to explain the dealer's position relating to each of the proposed charge-backs.
For commission, money, or other thing of value, buys, sells, leases, offers for subscription, or exchanges, whether outright Page 16 DRH30180-MW-68B General Assembly Of North Carolina Session 2021 or on conditional sale, bailment lease, chattel mortgage, or otherwise, five or more motor vehicles within any 12 consecutive months, regardless of who owns the motor vehicles.
For commission, money, or other thing of value, buys, sells, leases, offers for subscription, or exchanges, whether outright Page 16 House Bill 649-First Edition General Assembly Of North Carolina Session 2021 or on conditional sale, bailment lease, chattel mortgage, or otherwise, five or more motor vehicles within any 12 consecutive months, regardless of who owns the motor vehicles.
On behalf of another and for commission, money, or other thing of value, arranges, offers, attempts to solicit, or attempts to negotiate the sale, purchase, or exchange of an interest in five or more motor vehicles within any 12 consecutive months, regardless of who owns the motor vehicles.
On behalf of another and for commission, money, or other thing of value, arranges, offers, attempts to solicit, or attempts to negotiate the sale, purchase, or exchange of an interest in five or more motor vehicles within any12 consecutive months, regardless of who owns the motor vehicles.
Engages, wholly or in part, in the business of selling selling, leasing, or offering for subscription new motor vehicles or new or used motor vehicles, or used motor vehicles only, whether or not the motor vehicles are owned by that person, and sells five or more motor vehicles within any 12 consecutive months.
Engages, wholly or in part, in the business of selling selling, leasing, or offering for subscription new motor vehicles or new or used motor vehicles, or used motor vehicles only, whether or not the motor vehicles are owned by that person, and sells five or more motor vehicles within any12 consecutive months.
DRH30180-MW-68B Page 17
House Bill 649-First Edition Page 17
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Action History

  1. Passed 1st Reading

  2. Ref to the Com on Transportation, if favorable, Rules, Calendar, and Operations of the House

  3. Filed

Sponsors

Sponsorship breakdown

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0 sponsors · 3 co-sponsors · 176 not signed on

Sponsors (0)

None.

Co-sponsors (3)

Not signed on (176)

176 members have not signed on to this bill.

Show all 176 →

"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.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

Second Reading

Passed 112 Yea · 0 Nay · 8 Other
Party YeaNayPresentNot Voting
Democratic 12000
Unaffiliated 77006
Republican 21002
U 1000
Total 111008
% of votes cast 93%0%0%7%
How each member voted (119)
Member Party Vote
Avila — Yea
Bishop — Yea
Boles — Yea
Bradford — Yea
Burr — Yea
Conrad — Yea
Dobson — Yea
Farmer-Butterfield — Not Voting
Floyd — Yea
Fraley — Yea
Gill — Yea
Hurley — Yea
Insko — Yea
L.Bell — Yea
C.Graham — Yea
G.Graham — Yea
D.Hall — Yea
L.Hall — Yea
Jackson — Yea
R.Johnson — Yea
G.Martin — Yea
R.Moore — Yea
Queen — Yea
B.Richardson — Yea
B.Turner — Yea
J.Bell — Yea
Baskerville — Yea
Earle — Yea
Fisher — Yea
Glazier — Yea
Goodman — Yea
Hanes — Yea
Holley — Yea
Hunter — Yea
Lucas — Yea
Luebke — Yea
Terry — Yea
Wray — Yea
Brawley — Yea
B.Brown — Yea
R.Brown — Yea
L.Johnson — Yea
Jones — Yea
Malone — Yea
S.Martin — Yea
T.Moore(Speaker) — Yea
R.Turner — Yea
Bryan — Yea
Bumgardner — Yea
Catlin — Not Voting
Cleveland — Yea
Collins — Yea
Daughtry — Yea
Dollar — Yea
Elmore — Yea
Faircloth — Yea
Hager — Yea
Hamilton — Not Voting
Hardister — Yea
Holloway — Not Voting
Horn — Yea
Jeter — Yea
Jordan — Yea
Langdon — Yea
McElraft — Yea
McNeill — Yea
Michaux — Not Voting
Pendleton — Yea
Presnell — Yea
Saine — Yea
Speciale — Yea
Stam — Yea
Szoka — Yea
West — Yea
Yarborough — Yea
Lewis — Yea
McGrady — Yea
Millis — Yea
Salmon — Yea
Schaffer — Not Voting
Steinburg — Yea
Whitmire — Yea
Zachary — Yea
Becky Carney Democratic Yea
Cecil Brockman Democratic Yea
Dante Pittman Democratic Yea
Eric Ager Democratic Yea
Gale Adcock Democratic Yea
Garland E. Pierce Democratic Yea
Gladys A. Robinson Democratic Yea
Graig Meyer Democratic Yea
Joyce Waddell Democratic Yea
Pricey Harrison Democratic Yea
Robert T. Reives, II Democratic Yea
Shelly Willingham Democratic Yea
Carl Ford Republican Yea
Dean Arp Republican Yea
Dennis Riddell Republican Yea
Donny Lambeth Republican Yea
Frank Iler Republican Not Voting
Harry Warren Republican Yea
Hugh Blackwell Republican Yea
Jay Adams Republican Yea
Jimmy Dixon Republican Yea
John A. Torbett Republican Yea
John M. Blust Republican Yea
Julia C. Howard Republican Yea
Kelly E. Hastings Republican Yea
Mark Brody Republican Yea
Mitchell S. Setzer Republican Yea
Phil Shepard Republican Yea
Sam Watford Republican Yea
Sarah Stevens Republican Yea
Stephen M. Ross Republican Yea
Ted Davis, Jr. Republican Not Voting
Tricia Ann Cotham Republican Yea
W. Ted Alexander Republican Yea
William D. Brisson Republican Yea
Carla D. Cunningham U Yea

Official roll call →

A00R2____pass

Passed 49 Yea · 0 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 45001
Republican 3000
Democratic 1000
Total 49001
% of votes cast 98%0%0%2%
How each member voted (50)
Member Party Vote
Albertson, Charles W. — Yea
Allran, Austin M. — Yea
Ballance, Jr., Frank W. — Yea
Ballantine, Patrick J. — Yea
Basnight, Marc — Yea
Carpenter, Robert C. — Yea
Carrington, John — Yea
Carter, Charles — Yea
Clodfelter, Daniel G. — Yea
Cochrane, Betsy L. — Yea
Cooper Iii, Roy A. — Yea
Dalton, Walter — Yea
Dannelly, Charlie Smith — Yea
East, Don W. — Yea
Forrester, James — Yea
Foxx, Virginia — Yea
Garrou, Linda — Yea
Garwood, John A. — Yea
Gulley, Wib — Yea
Hagan, Kay — Yea
Harris, Oscar — Yea
Hartsell, Jr., Fletcher L. — Yea
Horton, Jr., Hamilton C. — Yea
Hoyle, David W. — Yea
Jordan, Jr., Luther Henry — Not Voting
Kerr, John H. — Yea
Kinnaird, Ellie — Yea
Lucas, Jeanne Hopkins — Yea
Martin, R. L. — Yea
Martin, William N. — Yea
Metcalf, Steve — Yea
Moore, Ken — Yea
Odom, T. L. — Yea
Perdue, Beverly M. — Yea
Phillips, Sr., Jim — Yea
Plyler, Aaron W. — Yea
Purcell, William R. — Yea
Rand, Anthony E. — Yea
Reeves, Eric Miller — Yea
Rucho, Robert A. — Yea
Shaw, Robert G. — Yea
Shaw, Larry — Yea
Soles, Jr., R. C. — Yea
Webster, Hugh — Yea
Weinstein, David — Yea
Wellons, Allen H. — Yea
Gladys A. Robinson Democratic Yea
Charles W. Miller Republican Yea
Harry Warren Republican Yea
Michael V. Lee Republican Yea

Official roll call →

Subjects

transportation
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

Who sponsors HB 649?
HB 649 is sponsored by Brenden H. Jones (Republican), Edward C. Goodwin (Republican), and Wray.
What is the current status of HB 649?
This bill died with 2021-2022 Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track HB 649?
Track HB 649 free on One Click Politics — get push/email alerts when it moves.

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