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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
]]]] 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
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