SB 27 — CAR DEALERSHIP CHANGES

t e a t L.

"recreational vehicle" means any motor vehicle m m 21 e d with a camping body that either has its own motive power or is r e 22 c e r c 23 drawn by another vehicle;

e a n b 24 M.

"designated family member" means a spouse, u [ child, grandchild, parent, brother or sister of a deceased or .209809.1 - 4 - SCORC/SB 27 incapacitated dealer who is entitled to inherit the dealer's ownership interest in the dealership under the terms of a will or the laws of intestate succession in this state.

N.

"current price" means an amount equal to the price listed in the manufacturer's or distributor's printed price list in effect when the franchise is terminated, less applicable trade and cash discounts;

e e 17 O.

"dealer cost" means an amount equal to the sum e e n d 18 of the original invoice price that the dealer paid for = = l ] 19 inventory and the cost of the delivery of the inventory from a l r i 20 the manufacturer or distributor to the dealer, less applicable t e a t discounts;

m m 21 e d P.

"inventory" means new or unused motorcycles, r e 22 c e r c 23 motor vehicles, motorcycle attachments and motorcycle and motor e a n b 24 vehicle repair parts that are provided by a manufacturer or u [ distributor to a dealer under a franchise agreement and that .209809.1 - 5 - SCORC/SB 27 are purchased within thirty-six months of the termination of the franchise or are listed in the manufacturer's or distributor's current sales manual or price list at the time that the franchise is terminated;

Q.

"relevant market area" means an area of a size specified in this subsection around an existing motor vehicle dealer's place of business.

The size of the area shall be the greater of the area of responsibility specified in the dealer's franchise or a circle with a center at the dealer's place of business and a radius of:

(1) seven miles, if the population of the county in which the dealership is located is two hundred fifty thousand or more;

(2) fifteen miles, if the population of the county in which the dealership is located is less than two hundred fifty thousand but is thirty-five thousand or more;

or e e 17 (3) twenty miles in all other cases.

e e n d 18 If the existing and proposed dealerships are in different = = l ] 19 counties, the lesser of the applicable mileage limitations a l r i 20 shall be used.

For purposes of this subsection, the population t e a t of any area shall be determined in accordance with the most m m 21 e d recent decennial census or the most recent population update r e 22 c e r c 23 from the national planning data corporation or other similar e a n b 24 recognized source, whichever is later;

u [ R.

"successor manufacturer" means a motor vehicle .209809.1 - 6 - SCORC/SB 27 manufacturer that, on or after January 1, 2010, acquires, succeeds to or assumes any part of the business of a predecessor manufacturer as the result of:

(1) a change in ownership, operation or control of the predecessor manufacturer;

(2) the termination, suspension or cessation of all or a part of the business operation of the predecessor manufacturer;

(3) the discontinuance of the sale of a product line;

or (4) a change in the distribution system by the predecessor manufacturer, whether through a change in distributor or the predecessor manufacturer's decision to cease conducting business through a distributor;

S.

"predecessor manufacturer" means a manufacturer that is acquired, succeeded by or assumed by a successor e e 17 manufacturer;

and e e n d 18 T.

"former franchisee":

= = l ] 19 (1) means a dealer that has entered into a a l r i 20 franchise agreement with a manufacturer and that has:

t e a t (a) entered into a termination agreement m m 21 e d or deferred termination agreement with the manufacturer related r e 22 c e r c 23 to the franchise;

or e a n b 24 (b) has had the franchise canceled, u [ terminated or otherwise ended;

and .209809.1 - 7 - SCORC/SB 27 (2) includes the designated successor of the former franchisee in the event the former franchisee is deceased or disabled] A.

"current price" means an amount equal to the price listed in the manufacturer's or distributor's printed price list in effect when the franchise is terminated, less applicable trade and cash discounts;

B.

"dealer cost" means an amount equal to the sum of the original invoice price that the dealer paid for inventory and the cost of the delivery of the inventory from the manufacturer or distributor to the dealer, less applicable discounts;

C.

"designated family member" means a spouse, child, grandchild, parent, brother or sister of a deceased or incapacitated dealer who is entitled to inherit the dealer's ownership interest in the dealership under the terms of a will e e 17 or the laws of intestate succession in this state.

In the case e e n d 18 of an incapacitated dealer, the term means the person appointed = = l ] 19 by a court as the legal representative of the dealer's a l r i 20 property.

The term also includes the appointed and qualified t e a t personal representative and the testamentary trustee of a m m 21 e d deceased dealer.

However, the term shall be limited to mean r e 22 c e r c 23 only that individual designated by a dealer in a written e a n b 24 document filed with the manufacturer, distributor or u [ representative in the event that such a document has been .209809.1 - 8 - SCORC/SB 27 filed;

"do not drive order" means a notice advising a motor vehicle dealer or an owner of a motor vehicle not to drive the vehicle until the vehicle has been repaired because the vehicle has a safety defect, fails to comply with a federal motor vehicle safety standard or fails to comply with SCORC/SB 27 Page 2 a federal requirement;

or e e 17 (b) has had the franchise canceled, e e n d 18 terminated or otherwise ended;

and = = l ] 19 (2) includes the designated successor of the a l r i 20 former franchisee in the event the former franchisee is t e a t deceased or disabled;

m m 21 e d G.

"franchise" means an oral or written arrangement r e 22 c e r c 23 for a definite or indefinite period in which a manufacturer, e a n b 24 distributor or representative grants to a motor vehicle dealer u [ a license to use a trade name, service mark or related .209809.1 - 9 - SCORC/SB 27 characteristic and in which there is a community of interest in the marketing of motor vehicles or services related to marketing, service or repair of motor vehicles at wholesale, retail, leasing or otherwise;

SCORC/SB 27 Page 3 (2) a promise or representation not made honestly and in good faith;

"inventory" means new or unused motorcycles, motor vehicles, motorcycle attachments and motorcycle and motor vehicle repair parts that are provided by a manufacturer or e e 17 distributor to a dealer under a franchise agreement and that e e n d 18 are purchased within thirty-six months of the termination of = = l ] 19 the franchise or are listed in the manufacturer's or a l r i 20 distributor's current sales manual or price list at the time t e a t that the franchise is terminated;

m m 21 e d J.

"manufacturer" means any person who manufactures r e 22 c e r c 23 or assembles new motor vehicles either within or outside of e a n b 24 this state and may include a predecessor manufacturer or a u [ successor manufacturer;

.209809.1 - 10 - SCORC/SB 27 K.

"motor vehicle dealer" or "dealer" means a person who sells or solicits or advertises the sale of new or SCORC/SB 27 Page 4 used motor vehicles and is licensed as a dealer pursuant to the Motor Vehicle Code.

(2) public officers while performing their e e 17 duties as such officers;

e e n d 18 (3) persons making casual sales of their own = = l ] 19 vehicles duly registered and licensed to them by the state;

or a l r i 20 (4) finance companies, banks and other lending t e a t institutions covering sales of repossessed vehicles;

m m 21 e d N.

"person" means every natural person, r e 22 c e r c 23 partnership, corporation, association, trust, estate or any e a n b 24 other legal entity;

u [ O.

"predecessor manufacturer" means a manufacturer .209809.1 - 11 - SCORC/SB 27 that is acquired, succeeded by or assumed by a successor manufacturer;

SCORC/SB 27 Page 5 R.

The size of the area shall be the greater of the area of responsibility specified in the dealer's franchise or a circle with a center at the dealer's place of e e 17 business and a radius of:

e e n d 18 (1) seven miles, if the population of the = = l ] 19 county in which the dealership is located is two hundred fifty a l r i 20 thousand or more;

t e a t (2) fifteen miles, if the population of the m m 21 e d county in which the dealership is located is less than two r e 22 c e r c 23 hundred fifty thousand but is thirty-five thousand or more;

or e a n b 24 (3) twenty miles in all other cases.

u [ If the existing and proposed dealerships are in different .209809.1 - 12 - SCORC/SB 27 counties, the lesser of the applicable mileage limitations shall be used.

"representative" means any person who is or SCORC/SB 27 Page 6 acts as an agent, employee or representative of a manufacturer or distributor and who performs any duties in this state relating to promoting the distribution or sale of new or used motor vehicles or contacts dealers in this state on behalf of a manufacturer or distributor;

(1) the issuance, transfer, agreement for transfer, exchange, pledge, hypothecation or mortgage in any form, whether by transfer in trust or otherwise, of any motor e e 17 vehicle or interest therein or of any franchise related e e n d 18 thereto;

and = = l ] 19 (2) any option, subscription or other contract a l r i 20 or solicitation looking to a sale or offer or attempt to sell t e a t in any form, whether spoken or written.

A gift or delivery of m m 21 e d any motor vehicle or franchise with respect thereto with, or r e 22 c e r c 23 as, a bonus on account of the sale of anything shall be deemed e a n b 24 a sale of such motor vehicle or franchise;

u [ V.

"stop sale order" means a notice prohibiting a .209809.1 - 13 - SCORC/SB 27 motor vehicle dealer from leasing or selling and delivering at wholesale or retail a used motor vehicle in the inventory of the dealer until the vehicle has been repaired because the vehicle has a safety defect, fails to comply with a federal motor vehicle safety standard or fails to comply with a federal requirement;

SCORC/SB 27 Page 7 W.

(3) the discontinuance of the sale of a e e 17 product line;

or e e n d 18 (4) a change in the distribution system by the = = l ] 19 predecessor manufacturer, whether through a change in a l r i 20 distributor or the predecessor manufacturer's decision to cease t e a t conducting business through a distributor;

and m m 21 e d X.

"value of the used motor vehicle" means the r e 22 c e r c 23 average trade-in value indicated in an independent third party e a n b 24 guide for a used motor vehicle of the same year, make and u [ model." .209809.1 - 14 - SCORC/SB 27 SECTION 2.

coerce or attempt to coerce a dealer to order SCORC/SB 27 Page 8 or accept delivery of a motor vehicle, appliances, equipment, parts or accessories therefor or any other commodity that the motor vehicle dealer has not voluntarily ordered;

coerce or attempt to coerce a dealer to order for any person any parts, accessories, equipment, machinery, e e 17 tools, appliances or any commodity whatsoever;

e e n d 18 D.

refuse to deliver, in reasonable quantities and = = l ] 19 within a reasonable time after receipt of dealer's order, to a a l r i 20 motor vehicle dealer having a franchise or contractual t e a t arrangement for the retail sale of motor vehicles sold or m m 21 e d distributed by the manufacturer, distributor or representative, r e 22 c e r c 23 those motor vehicles, parts or accessories covered by the e a n b 24 franchise or contract specifically publicly advertised by the u [ manufacturer, distributor or representative to be available for .209809.1 - 15 - SCORC/SB 27 immediate delivery;

provided, however, the failure to deliver a motor vehicle, parts or accessories shall not be considered a violation of Chapter 57, Article 16 NMSA 1978 if the failure is due to an act of God, work stoppage or delay due to a strike or labor difficulty, shortage of materials, freight embargo or other cause over SCORC/SB 27 Page 9 which the manufacturer, distributor or representative or an agent thereof has no control;

provided, however, that notice in good faith to a motor vehicle dealer of the dealer's violation of the terms or provisions of the franchise or contractual agreement does not constitute a e e 17 violation of Chapter 57, Article 16 NMSA 1978;

e e n d 18 F.

terminate or cancel the franchise or selling = = l ] 19 agreement of a dealer without due cause.

"Due cause" means a a l r i 20 material breach by a dealer, due to matters within the dealer's t e a t control, of a lawful provision of a franchise or selling m m 21 e d agreement.

As used in this subsection, "material breach" means r e 22 c e r c 23 a contract violation that is substantial and significant.

In e a n b 24 determining whether due cause exists under this subsection, the u [ court shall take into consideration only the dealer's sales in .209809.1 - 16 - SCORC/SB 27 relation to the business available to the dealer;

the qualifications of the management, sales and service personnel to provide the SCORC/SB 27 Page 10 consumer with reasonably good service and care of new motor vehicles;

The manufacturer, distributor or representative shall notify a motor vehicle dealer in writing by registered mail of the termination or cancellation of the franchise or selling agreement of the dealer at least sixty days before the effective date thereof, stating the specific e e 17 grounds for termination or cancellation;

and the manufacturer, e e n d 18 distributor or representative shall notify a motor vehicle = = l ] 19 dealer in writing by registered mail at least sixty days before a l r i 20 the contractual term of the dealer's franchise or selling t e a t agreement expires that it will not be renewed, stating the m m 21 e d specific grounds for nonrenewal in those cases where there is r e 22 c e r c 23 no intention to renew, and in no event shall the contractual e a n b 24 term of a franchise or selling agreement expire without the u [ written consent of the motor vehicle dealer involved prior to .209809.1 - 17 - SCORC/SB 27 the expiration of at least sixty days following the written notice.

During the sixty-day period, either party may in appropriate circumstances petition a district court to modify the sixty-day stay or to SCORC/SB 27 Page 11 extend it pending a final determination of proceedings on the merits.

provided, however, the provisions of this e e 17 subsection do not apply to sales to a motor vehicle dealer for e e n d 18 resale to a unit of the United States government, the state or = = l ] 19 its political subdivisions;

and provided, further, the a l r i 20 provisions of this subsection do not apply to sales to a motor t e a t vehicle dealer of a motor vehicle ultimately sold, donated or m m 21 e d used by the dealer in a driver education program;

and provided, r e 22 c e r c 23 further, that the provisions of this subsection do not apply if e a n b 24 a manufacturer, distributor or representative offers to sell or u [ sells new motor vehicles to all motor vehicle dealers at an .209809.1 - 18 - SCORC/SB 27 equal price.

As used in this section, "actual price" means the price to be paid by the dealer less any incentive paid by the manufacturer, SCORC/SB 27 Page 12 distributor or representative, whether paid to the dealer or the ultimate purchaser of the vehicle.

willfully discriminate, either directly or e e 17 indirectly, in price between different purchasers of a e e n d 18 commodity of like grade or quality where the effect of the = = l ] 19 discrimination may be to lessen substantially competition or a l r i 20 tend to create a monopoly or to injure or destroy the business t e a t of a competitor;

m m 21 e d J.

offer to sell or to sell parts or accessories to r e 22 c e r c 23 a motor vehicle dealer for use in the dealer's own business for e a n b 24 the purpose of repairing or replacing the same or a comparable u [ part or accessory at a lower actual price than the actual price .209809.1 - 19 - SCORC/SB 27 charged to any other motor vehicle dealer for similar parts or accessories for use in the SCORC/SB 27 Page 13 dealer's own business;

prevent or attempt to prevent by contract or otherwise a motor vehicle dealer from changing the capital e e 17 structure of the dealer's dealership or the means by or through e e n d 18 which the dealer finances the operation of the dealership, if = = l ] 19 the dealer at all times meets any reasonable capital standards a l r i 20 agreed to between the dealer and the manufacturer, distributor t e a t or representative, and if the change by the dealer does not m m 21 e d result in a change in the executive management control of the r e 22 c e r c 23 dealership;

e a n b 24 L.

prevent or attempt to prevent by contract or u [ otherwise a motor vehicle dealer or an officer, partner or .209809.1 - 20 - SCORC/SB 27 stockholder of a motor vehicle dealer from selling or transferring a part of the interest of any of them to any SCORC/SB 27 Page 14 other person or party;

The requirement of uniform e e 17 application shall be met if the manufacturer applies the same e e n d 18 set of standards, which takes into account business performance = = l ] 19 and experience, financial qualifications, facility requirements a l r i 20 and other relevant characteristics;

provided that, if two t e a t dealers, persons or situations are identical, given the m m 21 e d characteristics considered in the standards, the two dealers, r e 22 c e r c 23 persons or situations shall be treated identically, except as e a n b 24 provided in this subsection.

Upon request, a manufacturer or u [ distributor shall provide its dealer with a copy of the .209809.1 - 21 - SCORC/SB 27 standards that are normally relied upon by the manufacturer SCORC/SB 27 Page 15 or distributor to evaluate a proposed sale, transfer or assignment.

No manufacturer, distributor or representative shall require any information not requested in the twenty-day period, and submission of the information requested within that period together with a completed form of the application provided shall constitute a completed e e 17 application form.

A request for consent shall be deemed e e n d 18 granted, and the manufacturer, distributor or representative = = l ] 19 shall be estopped from denying the consent, if the consent has a l r i 20 not been expressly withheld during the applicable sixty-day t e a t period;

m m 21 e d M.

obtain money, goods, services, anything of value r e 22 c e r c 23 or any other benefit from any other person with whom the motor e a n b 24 vehicle dealer does business on account of or in relation to u [ the transactions between the dealer and the other person, .209809.1 - 22 - SCORC/SB 27 unless the benefit is promptly accounted for and SCORC/SB 27 Page 16 transmitted to the motor vehicle dealer;

establish an additional franchise, including any franchise for a warranty or service facility outside of the relevant market area of the dealer establishing the facility, but excluding the relocation of existing franchises, for the same line-make in a relevant market area where the same line-line-make make is presently being served by an existing motor vehicle dealer if such addition would be inequitable to the existing dealer;

provided, however, that the sales and service needs of e e 17 the public shall be given due consideration in determining the e e n d 18 equities of the existing dealer.

The sole fact that the = = l ] 19 manufacturer, distributor or representative desires further a l r i 20 penetration of the market is not grounds for establishing an t e a t additional franchise;

provided, further, that the manufacturer, m m 21 e d distributor or representative shall give a ninety-day written r e 22 c e r c 23 notice by registered mail to all same line-make dealers in a e a n b 24 relevant market area of its intention to establish an u [ additional franchise;

.209809.1 - 23 - SCORC/SB 27 Page 17 Q.

The provisions e e 17 of this subsection do not apply to a manufacturer or e e n d 18 distributor that has no dealer within fifty miles of a state = = l ] 19 line or if all of the manufacturer's or distributor's dealers a l r i 20 within that fifty miles are given all cash or credit incentives t e a t available in the neighboring state, whether the incentives are m m 21 e d offered by the manufacturer or the distributor or a finance r e 22 c e r c 23 subsidiary of either, affecting the price or financing terms of e a n b 24 a vehicle;

u [ T.

force a dealer to sell or relocate a franchise .209809.1 - 24 - SCORC/SB 27 Page 18 with another manufacturer located at the same physical location or consider the existence of another line-make at a dealership for product allocation, successorship, location approval and capitalization;

be licensed as a dealer or perform warranty or other service or own an interest, directly or indirectly, in a e e 17 person licensed as a dealer or performing warranty or other e e n d 18 service;

provided that a manufacturer or distributor may own a = = l ] 19 person licensed as a dealer for a reasonable time in order to a l r i 20 dispose of an interest acquired as a secured party or as part t e a t of a dealer development program;

m m 21 e d W.

fail to recognize and approve the transfer of a r e 22 c e r c 23 dealership to a person named as a successor, donee, beneficiary e a n b 24 or devisee in a valid testamentary or trust instrument;

u [ provided that a manufacturer or distributor may imposeSCORC/SB .209809.127 -Page 2519 -impose SCORC/SB 27 standards or criteria used in a transfer;

(1) construct a new dealership, require the relocation of an existing dealership or substantially change, alter or remodel a dealer's facility except as necessary to comply with health or safety laws or to comply with technology e e 17 requirements necessary to sell or service vehicles;

or e e n d 18 (2) construct a new dealership, require = = l ] 19 relocation of an existing dealership or substantially change, a l r i 20 alter or remodel an existing dealership before the tenth t e a t anniversary of the date that the construction or change, m m 21 e d alteration or remodel of the dealership at that location was rSCORC/SB e27 22Page c20 e r c 23 completed if the construction was in substantial compliance e a n b 24 with standards or plans provided by a manufacturer, distributor u [ or representative;

[or ] .209809.1 - 26 - SCORC/SB 27 AA.

fail to compensate a motor vehicle dealer for labor and parts required for a dealer to perform necessary e e 17 repairs on an affected new or used motor vehicle pursuant to a e e n d 18 recall, do not drive order or stop sale order, if the dealer = = l ] 19 holds a franchise of the same line-make as the subject vehicle;

a l r i 20 DD.

fail to compensate a motor vehicle dealer as t e a t prescribed by Chapter 57, Article 16 NMSA 1978 for a delay in mSCORC/SB m27 Page 21 e d delivering parts or equipment needed to perform recall-related r e 22 c e r c 23 repairs on an affected used motor vehicle in the dealer's e a n b 24 inventory that is subject to a do not drive order or stop sale u [ order, if the dealer holds a franchise of the same line-make as .209809.1 - 27 - SCORC/SB 27 the vehicle;

use data, calculations or statistical determinations of the sales performance of a motor vehicle dealer to take adverse action against the motor vehicle dealer for any period of time during which the dealer has at least five percent of its total new and used motor vehicle inventory e e 17 subject to a stop sale order or do not drive order;

provided e e n d 18 that the motor vehicle dealer's performance, as reflected in = = l ] 19 the data, calculations or statistical determinations, is a l r i 20 adversely affected by the stop sale order SCORC/SB 27 Page 22 or do not drive t e a t order." m m 21 e d SECTION 3.

Section 57-16-7 NMSA 1978 (being Laws 1973, r e 22 c e r c 23 Chapter 6, Section 7, as amended by Laws 2011, Chapter 111, e a n b 24 Section 1 and by Laws 2011, Chapter 118, Section 1) is amended u [ to read:

.209809.1 - 28 - SCORC/SB 27 "57-16-7.

Each manufacturer shall provide each of its dealers with a schedule of compensation to be paid to the dealer for [any ] recall or warranty repairs, work or service, including parts, labor and diagnostic work, required of the dealer by the manufacturer in connection with the manufacturer's products.

The schedule of compensation for a recall or warranty [claim] repair shall not be less than the rates charged by the dealer for similar service to retail customers for nonwarranty service and repairs.

[andC. shall not be less than the schedule of compensation for an existing e e 17 dealer as of July 1, 2011.

eThe erates ncharged dby 18the B.]dealer C.for nonwarranty service or work for parts means the price paid by the dealer for those parts, including all shipping and other charges, increased by the franchisee's average percentage markup.

TheA ratesdealer chargedshall byestablish theand dealerdeclare forthe =dealer's =average lSCORC/SB ]27 19Page nonwarranty23 servicepercentage ormarkup workby forsubmitting partsto means the pricemanufacturer paidone byhundred asequential lcustomer-paid rservice irepair 20orders theor dealerninety fordays thoseof parts,customer-paid includingservice allrepair shippingorders, andwhichever otheris tless, ecovering arepairs tmade charges,no increasedmore bythan theone franchisee'shundred averageeighty percentagedays mbefore mthe 21submission. e d markup.

A dealer shall establish and declare the dealer's r e 22 c e r c 23 average percentage markup by submitting to the manufacturer one e a n b 24 hundred sequential customer-paid service repair orders or u [ ninety days of customer-paid service repair orders, whichever .209809.1 - 29 - SCORC/SB 27 is less, covering repairs made no more than one hundred eighty days before the submission.

A manufacturer shall not require information that [the dealer believes] is unduly burdensome or time-consuming to provide, including [but not limited to ] part-by-part or transaction-by-transaction-by-transaction transaction calculations.

[C.] D.

A dealer shall establish and declare the dealer's average customer pay labor rate by submitting to the manufacturer the lesser of one hundred sequential customer-paid service repair orders or ninety days of customer-paid service e e 17 repair orders covering repairs made no more than one hundred e e n d 18 eighty days before the submission.

= = l ] 19 E.

If a manufacturer can demonstrate that the rates a l r i 20 under Subsection C or D of this section were incorrectly t e a t calculated by a dealer or unreasonably exceed those of all m m 21 e d other franchised motor vehicle dealers in the sameSCORC/SB relevant27 rPage e24 22same crelevant e r c 23 market area offering the same or a competitive motor vehicle e a n b 24 line, the manufacturer is not required to honor the rate u [ increase proposed by the dealer.

If the manufacturer is not .209809.1 - 30 - SCORC/SB 27 required to honor the rate increase proposed by the dealer, the dealer is entitled to resubmit a new proposed rate for labor and diagnostic work.

[D.] F.

[E.] G.

All recall or warranty claims [for warranty work] for parts and labor made by dealers under this section shall be submitted to the manufacturer within one year of the date the work was performed.

The manufacturer has the right to audit claims [for warranty work] and to charge the dealer for any unsubstantiated, incorrect or false claims for a period of six months following payment.

However, the manufacturer may audit and charge the e e 17 dealer for any fraudulent claims during any period for which an e e n d 18 action for fraud may be commenced under applicable state law.

= = l ] 19 [F.] H.

All claims submitted by dealers on the a l r i 20 forms and in the manner specified by the manufacturer shall be t e a t either approved or disapproved within thirty days following m m 21 e d their receipt.

The manufacturer shall notify the dealer in rSCORC/SB e27 22Page c25 e r c 23 writing of any disapproved claim and shall set forth the e a n b 24 reasons why the claim was not approved.

Any claim not u [ specifically disapproved in writing within thirty days .209809.1 - 31 - SCORC/SB 27 following receipt is approved, and the manufacturer is required to pay that claim within thirty days of receipt of the claim.

[G.] I.

A manufacturer may not [otherwise] recover [all or any portion of ] its costs for compensating its dealers licensed in this state for a recall or warranty [parts and service] claim either by reduction in the amount due to the dealer or by separate charge, surcharge or other imposition.

[H.] K.

The provisions of this section shall not e e 17 apply to recreational travel trailers or to parts of systems, e e n d 18 fixtures, appliances, furnishings, accessories and features of = = l ] 19 motor homes." a l r i 20 SECTION 4.

A new section of Chapter 57, Article 16 NMSASCORC/SB t27 ePage a26 tNMSA 1978 is enacted to read:

m"PROHIBITION m 21 e d "[NEW MATERIAL] PROHIBITION ON DENIAL OF CLAIMS BASED ON r e 22 c e r c 23 TECHNICAL ERRORS.--A manufacturer, distributor or e a n b 24 representative shall not charge back an element of a paid u [ claim, customer or dealer incentive, recall claim or warranty .209809.1 - 32 - SCORC/SB 27 claim based on a dealer's incidental failure to comply with a claim requirement or a clerical error or other technicality, as long as the dealer corrects the clerical error or other technicality according to licensee guidelines within ninety days of learning of the clerical error or other technicality and provides appropriate documentation to demonstrate the need for the repair.

"[NEW"USED MATERIAL] USED VEHICLES--DO NOT DRIVE OR STOP SALE ORDERS--DUTY TO PROVIDE PARTS OR EQUIPMENT--COMPENSATION FOR DELAY.-- A.

If a manufacturer, a distributor or the federal government issues a stop sale order or do not drive order on a used motor vehicle that is part of a franchise motor vehicle e e 17 dealer's inventory, the manufacturer or distributor upon e e n d 18 availability shall immediately provide to the dealer the part = = l ] 19 or equipment needed to make the vehicle comply with the motor a l r i 20 vehicle standards or to correct the defect.

t e a t B.

If a remedy or part necessary to repair a used mSCORC/SB m27 21Page e27 d motor vehicle subject to a stop sale order or do not drive r e 22 c e r c 23 order is not available within thirty days of the issuance of e a n b 24 the order, upon request of a franchise motor vehicle dealer, u [ the manufacturer shall compensate its franchise motor vehicle .209809.1 - 33 - SCORC/SB 27 dealer for each affected used motor vehicle of the same line-line-make make as new vehicles that the dealer is authorized to sell or service in the dealer's inventory at a prorated rate of at least one percent of the value of the used motor vehicle per month, commencing on the thirtieth day after the order was issued and ending on the earlier of the date that a remedy or all parts necessary to repair or service the affected used motor vehicle are made available to the dealer or the dealer sells, trades or otherwise disposes of the affected used motor vehicle.

Compensation provided to a franchise motor vehicle dealer under Subsection B of this section is exclusive e e 17 and shall not be combined with any other recall compensation e e n d 18 remedy under state or federal law.

= = l ] 19 D.

For the purposes of this section, a used motor a l r i 20 vehicle is part of the franchise motor vehicle dealer's tSCORC/SB e27 aPage t28 inventory if the used motor vehicle is held for sale and in the m m 21 e d possession of the dealer on the date the do not drive order or r e 22 c e r c 23 stop sale order is issued or if the dealer obtains the used e a n b 24 motor vehicle as a result of trade-in pursuant to the purchase u [ of a new or used motor vehicle or a lease return contract after .209809.1 - 34 - SCORC/SB 27 the date that the order is issued but before the remedy and all parts necessary to repair the used motor vehicle are made available to the dealer.

-SCORC/SB 3527 -Page 1329 1525 e e 17 e e n d 18 = = l ] 19 a l r i 20 t e a t m m 21 e d r e 22 c e r c 23 e a n b 24 u [ .209809.1