2007 Legislation
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SENATE BILL NO. 1152 – MV dealer/manufactr incentive prog

SENATE BILL NO. 1152

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Bill Status



S1152aa..............................................by JUDICIARY AND RULES
MOTOR VEHICLE DEALERS - Adds to existing law relating to motor vehicle
dealers and salesmen licensing 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.
                                                                        
02/13    Senate intro - 1st rdg - to printing
02/14    Rpt prt - to Com/HuRes
02/28    Rpt out - to 14th Ord
03/01    Rpt out amen - to engros
03/02    Rpt engros - 1st rdg - to 2nd rdg as amen
03/05    2nd rdg - to 3rd rdg as amen
03/06    3rd rdg as amen - PASSED - 33-0-2
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Geddes, Goedde,
      Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little,
      Lodge, Malepeai, McGee, McKague, McKenzie, Pearce, Richardson,
      Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- Gannon, Schroeder
    Floor Sponsor - Darrington
    Title apvd - to House
03/08    House intro - 1st rdg - to Transp
03/13    Rpt out - rec d/p - to 2nd rdg
03/14    2nd rdg - to 3rd rdg
03/19    3rd rdg - PASSED - 62-5-3
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
      Block, Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chew, Clark,
      Collins, Crane, Durst, Edmunson, Eskridge, Hagedorn, Hart, Henbest,
      Henderson, Jaquet, Killen, King, Kren, Labrador, Lake, LeFavour,
      Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer, Moyle,
      Nielsen, Nonini, Patrick, Pence, Raybould, Ring, Ringo, Roberts,
      Ruchti, Sayler, Schaefer, Shepherd(2), Shirley, Shively, Smith(30),
      Snodgrass, Stevenson, Thayn, Wills, Wood(27), Wood(35), Mr. Speaker
      NAYS -- Pasley-Stuart, Rusche, Shepherd(8), Smith(24), Vander Woude
      Absent and excused -- Chavez, Harwood, Trail
    Floor Sponsor - Bedke
    Title apvd - to Senate
03/20    To enrol
03/21    Rpt enrol - Pres signed - Sp signed
03/22    To Governor
03/28    Governor signed
         Session Law Chapter 251
         Effective: 07/01/07

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1152
                                                                        
                              BY JUDICIARY AND RULES 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 receiving the claim, unless the claim is  dis-
 18    approved  by  written  notice, with reasons stated, within thirty (30) days of
 19    receipt of the dealer's claim. A claim that is not disapproved  or  disallowed
 20    in writing within thirty (30) business days after the manufacturer or distrib-
 21    utor receives the claim is deemed automatically approved.
 22        (2)  A manufacturer shall not deny a claim based solely on a motor vehicle
 23    dealer's  incidental  failure  to  comply  with  a  specific  claim processing
 24    requirement, such as a clerical error  or  other  administrative  technicality
 25    that does not put into question the legitimacy of the claim.
 26        (3)  A  dealer shall have sixty (60) days from the date of notification by
 27    a manufacturer or distributor of a charge-back to the  dealer  to  resubmit  a
 28    claim  for payment or compensation, whether the charge-back was a direct or an
 29    indirect transaction.
 30        (4)  Notwithstanding the terms of a franchise agreement or other  contract
 31    with  a  manufacturer  or distributor, a motor vehicle dealer has one (1) year
 32    after the expiration of a manufacturer or  distributor  incentive  program  to
 33    submit a claim for payment or compensation under the program.
 34        (5)  Notwithstanding  the terms of a franchise agreement or other contract
 35    with a dealer and except as provided in subsection (6) of this section,  after
 36    the  expiration  of  one (1) year after the date of transaction of the vehicle
 37    sale or service, a manufacturer or distributor shall not:
 38        (a)  Charge back to a motor vehicle  dealer,  whether  directly  or  indi-
 39        rectly, the amount of a claim that has been approved and paid by the manu-
 40        facturer or distributor under an incentive program;
 41        (b)  Charge  back  to  a  motor  vehicle dealer, whether directly or indi-
 42        rectly, the cash value of a prize or other thing of value awarded  to  the
 43        dealer under an incentive program; or
                                                                        
                                       2
                                                                        
  1        (c)  Audit  the  records of a motor vehicle dealer to determine compliance
  2        with the terms of an incentive program.
  3        (6)  Notwithstanding subsection (5) of this  section,  a  manufacturer  or
  4    distributor  may make charge-backs to a motor vehicle dealer if, after comple-
  5    tion of an audit of the dealer's records and within two (2) years of the  date
  6    of transaction of the vehicle sale or service, the manufacturer or distributor
  7    can show, by clear and convincing 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.

Amendment


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                                                     Moved by    Goedde              
                                                                        
                                                     Seconded by Broadsword          
                                                                        
                                                                        
                                       IN THE SENATE
                             SENATE AMENDMENT TO S.B. NO. 1152
                                                                        
  1                               AMENDMENTS TO SECTION 1
  2        On page 1 of the printed bill,  in  line  18,  following  "(30)"   insert:
  3    "business";  in  line  27, following "of a" insert: "denial or a"; in line 28,
  4    following "compensation" insert: "if the claim was denied for a dealer's inci-
  5    dental failure as set forth in subsection (2) of this section";  delete  lines
  6    30 through 33 and insert:
  7        "(4)  A  motor vehicle dealer has ninety (90) days after the expiration of
  8    a manufacturer or distributor incentive program, or such longer time  as  pro-
  9    vided  by the franchise agreement, whichever is greater, to submit a claim for
 10    payment or compensation under the program.";
 11    in line 36, delete "transaction" and insert: "payment"; and in line 37, delete
 12    "sale or service" and insert: "claim".
 13        On page 2, delete lines 3 through 11 and insert:
 14        "(6)  A manufacturer or distributor may make charge-backs to a motor vehi-
 15    cle dealer if, after completion of an audit of the dealer's records, the manu-
 16    facturer or distributor can show, by a preponderance of the evidence, that:
 17        (a)  With respect to a claim under a service incentive program, the repair
 18        work was improperly performed in a substandard manner or was  unnecessary;
 19        or
 20        (b)  The claim is unsubstantiated in accordance with the manufacturer's or
 21        distributor's reasonable requirements.
 22        (7)  Notwithstanding  subsections  (5) and (6) of this section, a manufac-
 23    turer or distributor may make charge-backs to a motor vehicle dealer for fraud
 24    at any time permitted by section 5-218, Idaho Code.".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                              SENATE BILL NO. 1152, As Amended
                                                                        
                              BY JUDICIARY AND RULES 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 receiving the claim, unless the claim is  dis-
 18    approved  by  written notice, with reasons stated, within thirty (30) business
 19    days of receipt of the dealer's claim. A claim that is not disapproved or dis-
 20    allowed in writing within thirty (30) business days after the manufacturer  or
 21    distributor receives the claim is deemed automatically approved.
 22        (2)  A manufacturer shall not deny a claim based solely on a motor vehicle
 23    dealer's  incidental  failure  to  comply  with  a  specific  claim processing
 24    requirement, such as a clerical error  or  other  administrative  technicality
 25    that does not put into question the legitimacy of the claim.
 26        (3)  A  dealer shall have sixty (60) days from the date of notification by
 27    a manufacturer or distributor of a denial or a charge-back to  the  dealer  to
 28    resubmit  a  claim  for  payment or compensation if the claim was denied for a
 29    dealer's incidental failure as set forth in subsection (2)  of  this  section,
 30    whether the charge-back was a direct or an indirect transaction.
 31        (4)  A motor vehicle dealer has ninety (90) days after the expiration of a
 32    manufacturer or distributor incentive program, or such longer time as provided
 33    by  the  franchise agreement, whichever is greater, to submit a claim for pay-
 34    ment or compensation under the program.
 35        (5)  Notwithstanding the terms of a franchise agreement or other  contract
 36    with  a dealer and except as provided in subsection (6) of this section, after
 37    the expiration of one (1) year after the date of payment of the vehicle claim,
 38    a manufacturer or distributor shall not:
 39        (a)  Charge back to a motor vehicle  dealer,  whether  directly  or  indi-
 40        rectly, the amount of a claim that has been approved and paid by the manu-
 41        facturer or distributor under an incentive program;
 42        (b)  Charge  back  to  a  motor  vehicle dealer, whether directly or indi-
 43        rectly, the cash value of a prize or other thing of value awarded  to  the
                                                                        
                                       2
                                                                        
  1        dealer under an incentive program; or
  2        (c)  Audit  the  records of a motor vehicle dealer to determine compliance
  3        with the terms of an incentive program.
  4        (6)  A manufacturer or distributor may make charge-backs to a motor  vehi-
  5    cle dealer if, after completion of an audit of the dealer's records, the manu-
  6    facturer or distributor can show, by a preponderance of the evidence, that:
  7        (a)  With respect to a claim under a service incentive program, the repair
  8        work  was improperly performed in a substandard manner or was unnecessary;
  9        or
 10        (b)  The claim is unsubstantiated in accordance with the manufacturer's or
 11        distributor's reasonable requirements.
 12        (7)  Notwithstanding subsections (5) and (6) of this section,  a  manufac-
 13    turer or distributor may make charge-backs to a motor vehicle dealer for fraud
 14    at any time permitted by section 5-218, Idaho Code.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 16930

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

There is no fiscal impact.




Contact
Name: Trent Wright, Idaho Automobile Dealers Association 
Phone: 853-4668


STATEMENT OF PURPOSE/FISCAL NOTE                       S 1152