2006 Legislation
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HOUSE BILL NO. 654 – MV dealer, manufact incentive prog

HOUSE BILL NO. 654

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Bill Status



H0654...........................................................by BUSINESS
MOTOR VEHICLE DEALERS - Adds to existing law relating to motor vehicle
dealers to provide for payment of claims or other compensation to motor
vehicle dealers under a manufacturer incentive program for motor vehicle
dealers; and to provide conditions under which a manufacturer or
distributor can and cannot charge back to a motor vehicle dealer the amount
of a claim or cash value of a prize awarded to a dealer under a
manufacturer incentive program.
                                                                        
02/10    House intro - 1st rdg - to printing
02/13    Rpt prt - to Bus

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 654
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO MOTOR VEHICLE DEALERS AND SALESMEN LICENSING; AMENDING CHAPTER 16,
  3        TITLE 49, IDAHO CODE, BY THE ADDITION OF  A  NEW  SECTION  49-1638,  IDAHO
  4        CODE,  TO  PROVIDE  FOR  PAYMENT  OF CLAIMS OR OTHER COMPENSATION TO MOTOR
  5        VEHICLE DEALERS UNDER A MANUFACTURER INCENTIVE PROGRAM FOR  MOTOR  VEHICLE
  6        DEALERS  AND TO PROVIDE CONDITIONS UNDER WHICH A MANUFACTURER OR DISTRIBU-
  7        TOR CAN AND CANNOT CHARGE BACK TO A MOTOR VEHICLE DEALER THE AMOUNT  OF  A
  8        CLAIM  OR  CASH  VALUE OF A PRIZE AWARDED TO A DEALER UNDER A MANUFACTURER
  9        INCENTIVE PROGRAM.
                                                                        
 10    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 11        SECTION 1.  That Chapter 16, Title 49, Idaho Code, be,  and  the  same  is
 12    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 13    ignated as Section 49-1638, Idaho Code, and to read as follows:
                                                                        
 14        49-1638.  MANUFACTURER INCENTIVE PROGRAMS FOR MOTOR VEHICLE DEALERS. (1) A
 15    manufacturer or distributor shall pay a motor vehicle dealer's claim for  pay-
 16    ment  or  other compensation due under a manufacturer incentive program within
 17    thirty (30) business days after approval of the claim. A  claim  that  is  not
 18    disapproved  or disallowed within thirty (30) business days after the manufac-
 19    turer or distributor receives the claim is deemed automatically  approved.  If
 20    the motor vehicle dealer's claim is not approved, the manufacturer or distrib-
 21    utor  shall provide the dealer with written notice of the reasons for the dis-
 22    approval at the time notice of disapproval is given.
 23        (2)  A manufacturer shall not deny a claim based solely on a motor vehicle
 24    dealer's  incidental  failure  to  comply  with  a  specific  claim-processing
 25    requirement that results in a clerical error or other  administrative  techni-
 26    cality.
 27        (3)  Notwithstanding  the terms of a franchise agreement or other contract
 28    with a manufacturer or distributor, a motor vehicle dealer has  one  (1)  year
 29    after  the  expiration  of  a manufacturer or distributor incentive program to
 30    submit a claim for payment or compensation under the program.
 31        (4)  Notwithstanding the terms of a franchise agreement or other  contract
 32    with  a dealer and except as provided in subsection (5) of this section, after
 33    the expiration of one (1) year after the end of the incentive program, a manu-
 34    facturer or distributor shall not:
 35        (a)  Charge back to a motor vehicle  dealer,  whether  directly  or  indi-
 36        rectly, the amount of a claim that has been approved and paid by the manu-
 37        facturer or distributor under an incentive program;
 38        (b)  Charge  back  to  a  motor  vehicle dealer, whether directly or indi-
 39        rectly, the cash value of a prize or other thing of value awarded  to  the
 40        dealer under an incentive program; or
 41        (c)  Audit  the  records of a motor vehicle dealer to determine compliance
 42        with the terms of an incentive program. Where, however, a manufacturer  or
 43        distributor  has  reasonable  grounds to believe that the dealer committed
                                                                        
                                           2
                                                                        
  1        fraud with respect to the incentive program, the manufacturer or distribu-
  2        tor may audit the dealer for a fraudulent  claim  during  any  period  for
  3        which an action for fraud may be commenced under applicable state law.
  4        (5)  Notwithstanding paragraphs (4)(a) and (4)(b) of this section, a manu-
  5    facturer  or  distributor  may make charge-backs to a motor vehicle dealer if,
  6    after completion of an audit of the dealer's records, the manufacturer or dis-
  7    tributor can show, by a preponderance of the evidence, that:
  8        (a)  The claim was intentionally false or fraudulent at the  time  it  was
  9        submitted to the manufacturer or distributor; or
 10        (b)  With respect to a claim under a service incentive program, the repair
 11        work  was improperly performed in a substandard manner or was unnecessary;
 12        or
 13        (c)  The claim is unsubstantiated in accordance with the manufacturer's or
 14        distributor's reasonable requirements.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                            RS 15978C1

The purpose of this legislation is to provide terms for
reimbursement of claims to motor vehicle dealers under a
manufacturer incentive program, and to provide a time frame for
submission of such claims.



                           FISCAL NOTE
None.







Contact:  Rep. Bob Nonini 
          332-1000
          
          Denise Brennan 
          Idaho Automobile Dealers Association
          853-4668
          
STATEMENT OF PURPOSE/FISCAL NOTE                         H 654