S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4066--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 9, 2023
                                ___________
 
 Introduced  by  M.  of A. BURGOS, SILLITTI, GALLAGHER, FAHY, BRAUNSTEIN,
   CLARK,  FALL,  SEPTIMO,  MAMDANI,  RIVERA,  DURSO,  MILLER,  LUNSFORD,
   DARLING,  SANTABARBARA,  DeSTEFANO,  J. A. GIGLIO,  SMITH, K. BROWN --
   read once and referred to the Committee on Transportation -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the vehicle and traffic law, in  relation  to  requiring
   motor  vehicle dealer franchisors to fully compensate franchised motor
   vehicle dealers for warranty service agreements
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision  1  of section 465 of the vehicle and traffic
 law, as amended by chapter 26 of the laws of 2014, is amended to read as
 follows:
   1. Every franchisor shall  properly  fulfill  any  warranty  agreement
 and/or  franchisor's  service contract, INCLUDING BUT NOT LIMITED TO ALL
 WARRANTY  REPAIRS,  EXTENDED  WARRANTY  REPAIRS,   FACTORY   COMPENSATED
 REPAIRS,  RECALLS,  DIAGNOSTICS,  PARTS  AND  OTHER  VOLUNTARY STOP-SELL
 REPAIRS, and shall compensate each of its franchised motor vehicle deal-
 ers for ALL warranty [parts and labor], RECALL, DIAGNOSTIC  LABOR  OPER-
 ATIONS  AND  PARTS WHERE APPLICABLE in amounts [which reflect reasonable
 compensation for such work] EQUAL TO THE  APPLICABLE  LABOR  TIME  GUIDE
 UTILIZED FOR RETAIL CUSTOMER PAID LABOR OPERATIONS BY A FRANCHISED MOTOR
 VEHICLE DEALER. IN NO EVENT SHALL SUCH COMPENSATION FAIL TO INCLUDE FULL
 COMPENSATION  FOR DIAGNOSTIC WORK, AS WELL AS REPAIR SERVICE, LABOR, AND
 PARTS.  ADDITIONALLY, IF A TECHNICIAN IS REQUIRED TO COMMUNICATE WITH  A
 TECHNICAL  ASSISTANCE  CENTER, ENGINEERING OR SOME EXTERNAL MANUFACTURER
 SOURCE IN ORDER TO PROVIDE A WARRANTY REPAIR, THE MANUFACTURER SHALL PAY
 FOR THE TIME FROM START OF COMMUNICATIONS (INCLUDING  HOLD  TIME)  UNTIL
 THE COMMUNICATION IS COMPLETE. All warranty claims and/or claims under a
 franchisor's  service  contract made by franchised motor vehicle dealers
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02112-03-3
              

 A. 4066--A                          2
 
 shall be paid within thirty days following their approval. For DIAGNOSIS
 WORK, parts reimbursement, other  than  components,  systems,  fixtures,
 appliances,  furnishings, accessories and features of a house coach that
 are designed, used and maintained primarily for nonvehicular residential
 purposes, and for labor reimbursement, reasonable compensation shall not
 be  less than the price and rate charged by the franchised motor vehicle
 dealer for like services to  non-warranty  and/or  non-service  contract
 customers.  IN  THE  EVENT  THAT A TIME GUIDE HAS NOT BEEN AGREED TO FOR
 WARRANTY REPAIRS, OR SAID TIME GUIDE DOES NOT DEFINE TIME FOR AN  APPLI-
 CABLE WARRANTY REPAIR, THE FRANCHISOR'S TIME GUIDE SHALL BE USED, MULTI-
 PLIED  BY  ONE AND ONE-HALF. For purposes of this section, the price and
 rate charged by the franchised motor vehicle dealer  for  parts  may  be
 established  by  submitting  to  the  franchisor  one hundred sequential
 nonwarranty customer-paid service repair orders or the number of sequen-
 tial nonwarranty customer-paid service repair orders  written  within  a
 ninety day period, whichever is less, covering repairs made no more than
 one  hundred  eighty days before the submission, and declaring the price
 and rate, including average markup  for  the  franchised  motor  vehicle
 dealer  as  its  reimbursement  rate. The reimbursement rate so declared
 shall go into effect thirty days following the declaration and shall  be
 presumed  to be reasonable, however a franchisor may rebut such presump-
 tion by showing that such rate so established is unreasonable  in  light
 of  the  practices  of all other franchised motor vehicle dealers in the
 vicinity offering the same line make. The franchised motor vehicle deal-
 er shall not request a change in the reimbursement rate more often  than
 once  in  each  calendar  year.  In establishing the labor reimbursement
 rate, the franchisor shall not require a franchised motor vehicle dealer
 to establish said rate by a methodology, or  by  requiring  information,
 that  is  unduly burdensome or time consuming to provide, including, but
 not limited to,  a  transaction  by  transaction  calculation.  For  the
 purposes  of this section, the following parts or types of repairs shall
 be  excluded  from  the  parts  and/or  labor   calculations   and   the
 franchisor's  reimbursement  requirements  under this section: (a) parts
 sold at wholesale; (b) tires; (c) routine maintenance not covered  under
 any  retail  customer  warranty  such  as  fluids, filters and belts not
 provided in the course of repairs; (d) vehicle reconditioning;  and  (e)
 batteries  replaced  as  part of a routine maintenance operation. If the
 franchisor rejects the declaration or attempts to rebut the  declaration
 because  of  an  error  in the dealer's submission, the franchisor shall
 identify with specificity the reason  for  rejection  and  identify  the
 error  or  errors  within  the  submission.  In the event the franchisor
 rejects or rebuts the dealer's initial  declaration,  the  dealer  shall
 have  the  opportunity,  within  sixty  days  to  resubmit  the full and
 corrected declaration addressing the alleged error or errors  identified
 by  the  franchisor. The franchisor shall respond within sixty days. The
 one hundred eighty day requirement for the repair orders shall be stayed
 from the date of initial submission. In any action  or  proceeding  held
 pursuant  to  this  subdivision, the franchisor shall have the burden of
 proving that the  rate  declared  by  the  dealer  was  unreasonable  as
 described  in  this  subdivision and that the proposed adjustment of the
 average percentage markup or rejection of the submission  is  reasonable
 pursuant  to  the provisions of this subdivision.  NO DEBIT REDUCTION OR
 CHARGE BACK OF ANY ITEM ON A WARRANTY REPAIR ORDER SHALL BE MADE  ABSENT
 A  FINDING  OF  FRAUD  OR  ILLEGAL ACTIONS BY THE DEALER.  NO FRANCHISOR
 SHALL IMPOSE ANY FORM OF COST RECOVERY  FEES  OR  SURCHARGES  AGAINST  A
 FRANCHISED  MOTOR  VEHICLE  DEALER  FOR PAYMENTS MADE IN ACCORDANCE WITH
 A. 4066--A                          3
 
 THIS SUBDIVISION. THERE SHALL BE NO REDUCTION  IN  PAYMENTS  UNDER  THIS
 SUBDIVISION  DUE  TO  PREESTABLISHED  MARKET  NORMS  OR MARKET AVERAGES.
 FRANCHISORS ARE PROHIBITED FROM ESTABLISHING RESTRICTIONS OR LIMITATIONS
 OF  CUSTOMER  REPAIR  FREQUENCY  DUE TO FAILURE RATE INDEXES OR NATIONAL
 FAILURE AVERAGES. A WARRANTY CLAIM  TIMELY  MADE  SHALL  NOT  BE  DEEMED
 INVALID  SOLELY BECAUSE UNAVAILABLE PARTS CAUSE ADDITIONAL USE AND MILE-
 AGE ON THE VEHICLE.  IF A FRANCHISOR IMPOSES A RECALL OR  STOP  SALE  ON
 ANY  NEW  VEHICLE  IN A FRANCHISED MOTOR VEHICLE DEALER'S INVENTORY THAT
 PREVENTS THE SALE OF THE VEHICLE, THE FRANCHISOR  SHALL  COMPENSATE  THE
 MOTOR  VEHICLE  DEALER FOR ANY INTEREST AND STORAGE UNTIL THE VEHICLE IS
 REPAIRED AND MADE READY FOR SALE.
   § 2. This act shall take effect immediately.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4066--B
                                                         Cal. No. 112
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 9, 2023
                                ___________
 
 Introduced  by  M.  of A. BURGOS, SILLITTI, GALLAGHER, FAHY, BRAUNSTEIN,
   CLARK,  FALL,  SEPTIMO,  MAMDANI,  RIVERA,  DURSO,  MILLER,  LUNSFORD,
   DARLING,   SANTABARBARA,  DeSTEFANO,  J. A. GIGLIO,  SMITH,  K. BROWN,
   RAMOS,  LAVINE,  McMAHON,  JACOBSON,  SHIMSKY,  CUNNINGHAM,  SHRESTHA,
   L. ROSENTHAL,   THIELE,  DE LOS SANTOS,  MEEKS,  McDONOUGH,  WILLIAMS,
   COLTON, DINOWITZ, HEVESI, GUNTHER, BURKE, TAPIA, COOK, STERN,  WALKER,
   WEPRIN,  BENEDETTO,  SIMONE,  JEAN-PIERRE,  NORRIS,  JENSEN,  BEEPHAN,
   EPSTEIN, SLATER, GRAY, CONRAD, McDONALD,  SEAWRIGHT,  BURDICK,  BORES,
   BRABENEC,  HYNDMAN,  ZACCARO,  AUBRY,  STIRPE, REILLY, DILAN, SOLAGES,
   SAYEGH, CRUZ, CARROLL,  TAGUE,  ALVAREZ,  LUPARDO,  LEVENBERG,  FLOOD,
   GONZALEZ-ROJAS,  MORINELLO,  BRONSON,  WOERNER,  ZEBROWSKI,  E. BROWN,
   REYES, ARDILA, GALLAHAN, SIMPSON, GANDOLFO, BENDETT,  MCGOWAN,  STECK,
   WALLACE, MAHER, WALSH, RAGA, LEE, PHEFFER AMATO, KELLES -- Multi-Spon-
   sored  by -- M. of A. SIMON -- read once and referred to the Committee
   on Transportation  --  committee  discharged,  bill  amended,  ordered
   reprinted as amended and recommitted to said committee -- ordered to a
   third  reading,  amended and ordered reprinted, retaining its place on
   the order of third reading
 
 AN ACT to amend the vehicle and traffic law, in  relation  to  requiring
   motor  vehicle dealer franchisors to fully compensate franchised motor
   vehicle dealers for warranty service agreements
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision  1  of section 465 of the vehicle and traffic
 law, as amended by chapter 26 of the laws of 2014, is amended to read as
 follows:
   1. Every franchisor shall  properly  fulfill  any  warranty  agreement
 and/or  franchisor's  service contract, INCLUDING BUT NOT LIMITED TO ALL
 WARRANTY  REPAIRS,  EXTENDED  WARRANTY  REPAIRS,   FACTORY   COMPENSATED
 REPAIRS,  RECALLS,  DIAGNOSTICS,  PARTS  AND  OTHER  VOLUNTARY STOP-SELL
 REPAIRS, and shall compensate each of its franchised motor vehicle deal-
 ers for ALL warranty [parts and labor], RECALL, DIAGNOSTIC  LABOR  OPER-
 ATIONS  AND  PARTS  WHERE APPLICABLE in amounts which reflect reasonable
 compensation for such work. FOR PURPOSES  OF  THIS  SECTION,  REASONABLE
              

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02112-08-4
 A. 4066--B                          2
 
 COMPENSATION  SHALL  BE  THE REASONABLE LABOR TIME ALLOWANCES DEFINED BY
 THE RETAIL LABOR TIME GUIDE REASONABLY UTILIZED BY  A  FRANCHISED  MOTOR
 VEHICLE  DEALER  FOR  NON-WARRANTY  CUSTOMER  PAID LABOR OPERATIONS. All
 warranty claims and/or claims under a franchisor's service contract made
 by  franchised  motor  vehicle  dealers shall be paid within thirty days
 following their approval. For DIAGNOSIS WORK, parts reimbursement, other
 than components, systems, fixtures, appliances, furnishings, accessories
 and features of a house coach that are  designed,  used  and  maintained
 primarily   for   nonvehicular   residential  purposes,  and  for  labor
 reimbursement, reasonable compensation shall not be less than the  price
 and  rate  charged  by  the  franchised  motor  vehicle  dealer for like
 services to non-warranty and/or non-service  contract  customers.    For
 purposes  of  this section, the price and rate charged by the franchised
 motor vehicle dealer for parts may be established by submitting  to  the
 franchisor  one  hundred  sequential  nonwarranty  customer-paid service
 repair orders or the  number  of  sequential  nonwarranty  customer-paid
 service  repair  orders written within a ninety day period, whichever is
 less, covering repairs made no more than one hundred eighty days  before
 the  submission,  and  declaring  the  price and rate, including average
 markup for the franchised motor  vehicle  dealer  as  its  reimbursement
 rate.  The  reimbursement  rate  so declared shall go into effect thirty
 days following the declaration and shall be presumed to  be  reasonable,
 however  a  franchisor  may  rebut such presumption by showing that such
 rate so established is unreasonable in light of  the  practices  of  all
 other franchised motor vehicle dealers in the vicinity offering the same
 line  make.  The  franchised  motor  vehicle  dealer shall not request a
 change in the reimbursement rate more often than once in  each  calendar
 year. In establishing the labor reimbursement rate, the franchisor shall
 not  require a franchised motor vehicle dealer to establish said rate by
 a methodology, or by requiring information, that is unduly burdensome or
 time consuming to provide, including, but not limited to, a  transaction
 by  transaction  calculation.  For  the  purposes  of  this section, the
 following parts or types of repairs shall be  excluded  from  the  parts
 and/or  labor  calculations  and the franchisor's reimbursement require-
 ments under this section: (a) parts sold at wholesale;  (b)  tires;  (c)
 routine  maintenance not covered under any retail customer warranty such
 as fluids, filters and belts not provided in the course of repairs;  (d)
 vehicle  reconditioning; and (e) batteries replaced as part of a routine
 maintenance operation. If the  franchisor  rejects  the  declaration  or
 attempts  to  rebut  the declaration because of an error in the dealer's
 submission, the franchisor shall identify with  specificity  the  reason
 for rejection and identify the error or errors within the submission. In
 the event the franchisor rejects or rebuts the dealer's initial declara-
 tion, the dealer shall have the opportunity, within sixty days to resub-
 mit  the  full and corrected declaration addressing the alleged error or
 errors identified by the franchisor. The franchisor shall respond within
 sixty days. The one hundred eighty day requirement for the repair orders
 shall be stayed from the date of initial submission. In  any  action  or
 proceeding  held pursuant to this subdivision, the franchisor shall have
 the burden of proving that the rate declared by the dealer was unreason-
 able as described in this subdivision and that the  proposed  adjustment
 of  the  average  percentage  markup  or  rejection of the submission is
 reasonable pursuant to the provisions of this subdivision.   A  WARRANTY
 CLAIM TIMELY MADE SHALL NOT BE DEEMED INVALID SOLELY BECAUSE UNAVAILABLE
 PARTS CAUSE ADDITIONAL USE AND MILEAGE ON THE VEHICLE.
   § 2. This act shall take effect immediately.