AB 410 — Authorizes a new vehicle dealer to file a claim for compensation with a manufacturer of motor vehicles under certain circumstances. (BDR 43-1024)

(ReprintedAssembly withBill amendmentsNo. adopted on May 22, 2017) SECOND REPRINT A.B.

410410–Assemblywoman ABustamante SSEMBLYAdams BILLCHAPTER.......... NO .

410–ASSEMBLYWOMAN BUSTAMANTE A DAMS M ARCH 27, 2017 ____________ Referred to Committee on Transportation SUMMARY—Authorizes a new vehicle dealer to file a claim for compensation with a manufacturer of motor vehicles under certain circumstances.

(BDR 43-1024) FISCAL NOTE:

Effect on Local Government:

No.

Effect on the State:

Yes.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

Undervehicles existingtoward law, certain acts or practices by a manufacturernew ofvehicle motordealer 482.36371-482.36395)are Forconsidered example, it is an unfair actacts or practicepractices. for atices.

(NRS 482.36371-482.36395) For example, it is an unfair act or practice for a manufacturer to fail to compensate a dealer fairly for labor, parts and other expenses incurred by the dealer under the manufacturer’s warranty agreements.

(NRS 482.36385) Under federal law, if a new motor vehicle is subject to a recall for a defect related to safety or noncompliance with certain safety standards after the manufacturer has sold the vehicle to a new vehicle dealer, the reasonablemanufacturer reimbursementmust ofrepurchase atthe leastvehicle 1from percent of the purchasedealer, priceand forpay eachthe dealer month, or portion thereof, the dealer possessed the car after the recall notice was issued.

§ 30116) Section 1 of this bill authorizes a new vehicle dealer that is franchised to sell new vehicles of the manufacturer to apply to the manufacturer for compensation for each month that the dealer possesses a used vehicle, manufactured by the manufacturer, that is subject to a stop-sale order or do-not-drive order.

Section 1 - *AB410_R2* – 2 – requires the new vehicle dealer to file a claim for such compensation with the manufacturer.must be calculated at a rate of not less than 1 percent of the value of the usedbill vehicle for each month that the used vehicle is in the inventory of the dealer, beginning 30 days after the stop-sale order or do-not-drive order is provided to the dealer.

Compensation for a claim filed pursuant to the provisions of this bill must be calculated at a rate of not less than 1 percent of the value of the used beginning 30 days after the stop-sale order or do-not-drive order is provided to the dealer.

(NRS 482.36385) Section 4 of this personbill whoadds isa aggrievedviolation byof certainsection violations1 to seekprovisions injunctivein relief,existing andlaw that authorize a authorize a person who is injured in his or her business by such a violation to bring an action to recover certain monetary damages.

(NRS 482.36423) Section 5 of this bill adds a willful violation of section 1 to the list of violations in existing law for which a civil penalty may apply, and for which the Attorney General may seek changes.veinjunctive relief.

(NRS 482.36425) Section 2 of this bill makes conforming THEchanges. PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

- 79th Session (2017) – 2 – EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

or (b) Takes into its used car inventory as a consumer trade-in related to the sale of a new vehicle after the date on which the stop-sale order or do-not-drive order is issued.

- *AB410_R2* – 3 – 3.

- 79th Session (2017) – 3 – 4.

A manufacturer, in lieu of compensating a new vehicle dea(a) Compensate the dealer pursuant to subsectiona 3,national may:recall compensation program, if the amount of compensation owed to the dealer under the program is not less than the amount of compensation owed to the dealer pursuant to subsection 3;

(a) Compensate the dealer pursuant to a national recall compensation program, if the amount of compensation owed to the dealer under the program is not less than the amount of compensation owed to the dealer pursuant to subsection 3;

8.(a) “Do-not-drive order” means a notification issued by a manufacturer to its dealers or to the registered owner of a used vehicle or by the National Highway Traffic Safety Administration to the registered owner of a used vehicle stating that the vehicle is subject to a federal safety recall for a defect or noncompliance and including an unconditional instruction to the recipient of the notification to not drive the vehicle until the remedy for the recall is complete.

As used in this section:

(a) “Do-not-drive order” means a notification issued by a manufacturer to its dealers or to the registered owner of a used vehicle or by the National Highway Traffic Safety Administration to the registered owner of a used vehicle stating that the vehicle is subject to a federal safety recall for a defect or noncompliance and including an unconditional instruction to the recipient of the - *AB410_R2* – 4 – notification to not drive the vehicle until the remedy for the recall is complete.

(c) “Stop-sale order” means a notification issued by a manufacturer to its dealers stating that a used vehicle in inventory must not be sold or leased, either retail or wholesale, because of a - 79th Session (2017) – 4 – federal safety recall for a defect or noncompliance or because of a federal emissions recall.

(d) “Value of the used vehicle” means the average trade-in value of the year, make and model of the subject used vehicle as indicatedindSec. in an independent third-party guide.

Sec.2.in NRS 482.36311 is hereby amended to read as follows:

2.

NRS 482.36311 is hereby amended to read as follows:

482.36385 It is an unfair act or practice for any manufacturer, distributorto:tributor or factory branch, directly or through any representative, to:1.

1.

- *AB410_R2* – 5 – 2.

- 79th Session (2017) – 5 – 3.

Fail to compensate a dealer fairly for the work and services which the dealer is required to perform in connection with the delivery and preparation obligations under any franchise, or fail to compensate a dealer fairly for labor, parts and other expenses incurred by the dealer under the manufacturer’s warranty agreements [.] or any recall service or repairs.