FILED SENATE
Mar 22, 2023
GENERAL ASSEMBLY OF NORTH CAROLINA
S.B. 356
SESSION 2023 PRINCIPAL CLERK
S D
SENATE BILL DRS15151-ML-111A
Short Title: Clarify Motor Vehicle Dealer Laws. (Public)
Sponsors: Senators Jackson, Perry, and Lazzara (Primary Sponsors).
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO CLARIFY VARIOUS MOTOR VEHICLE DEALER LAWS.
3 The General Assembly of North Carolina enacts:
4
5 DEALER INDEPENDENCE AND INCREASING THE AVAILABILITY OF ELECTRIC
6 VEHICLES FOR RURAL CONSUMERS
7 SECTION 1.(a) G.S. 20-305(53) reads as rewritten:
8 "(53) Notwithstanding the terms of any franchise or agreement, or the terms of any
9 program or policy, to do any of the following if it has any franchised dealers
10 in this State and if State:
11 a. If it permits retail customers the option of reserving or requesting to
12 purchase or lease a vehicle directly from such manufacturer or
13 distributor:distributor, to do any of the following:
14 a.1. Fail to assign any retail vehicle reservation or request to
15 purchase or lease received by the manufacturer or distributor
16 from a resident of this State to the franchised dealer authorized
17 to sell that make and model which is designated by the
18 customer, or if none is designated, to its franchised dealer
19 authorized to sell that make and model located in closest
20 proximity to the customer's location, provided that if the
21 customer does not purchase or lease the vehicle from that
22 dealer within 10 days of the vehicle being assigned to the
23 dealer, or if the customer requests that the transaction be
24 assigned to another dealer, then the manufacturer or distributor
25 may assign the transaction to another franchised dealer
26 authorized to sell that make and model.
27 b.2. Prohibit a retail customer that has reserved or requested to
28 purchase or lease a vehicle directly from the manufacturer or
29 distributor from negotiating the final purchase price of the
30 vehicle directly with the dealer if the dealer is authorized to sell
31 that make and model and to agree on a final price for a new
32 motor vehicle which varies from the MSRP established by the
33 manufacturer or distributor.
34 c.3. Prohibit a retail customer that has reserved or requested to
35 purchase or lease a vehicle directly from the manufacturer or
36 distributor from using any vehicle financing or leasing source
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 General Assembly Of North Carolina Session 2023
1 available from or through the dealer to whom the customer's
2 vehicle reservation or request to purchase or lease has been
3 assigned or to prohibit a franchised dealer in this State from
4 offering and negotiating directly with the customer the terms
5 of vehicle financing or leasing through all sources available to
6 the dealer.
7 d.4. Prohibit a retail customer that has reserved or requested to
8 purchase or lease a vehicle directly from the manufacturer or
9 distributor from purchasing on terms negotiated or agreed to
10 directly between the customer and the dealer to whom the
11 customer's reservation or request to purchase or lease has been
12 assigned, any service contract, extended warranty, vehicle
13 maintenance contract, or guaranteed asset protection (GAP)
14 agreement, or any other vehicle-related products and services
15 offered by the dealer, provided that a manufacturer, distributor,
16 or captive finance source shall not be required to finance any
17 such product or service that is not offered or supported by the
18 manufacturer or distributor.
19 e.5. Prohibit a retail customer that has reserved or requested to
20 purchase or lease a vehicle directly from the manufacturer or
21 distributor and the dealer to whom the customer's reservation
22 or request to purchase or lease has been assigned from directly
23 negotiating the trade-in value the customer will receive, or to
24 prohibit the dealer from conducting an on-site inspection of the
25 condition of a trade-in vehicle before the dealer becomes
26 contractually obligated to accept the trade-in value negotiated.
27 f.6. Use a third party to accomplish what would otherwise be
28 prohibited by this subdivision.
29 b. Fail or refuse to do any of the following:
30 1. Allow consumers located in this State the ability to directly
31 purchase from any of its franchised dealers in this State, either
32 at the dealer's dealership or through one or more websites
33 owned, operated, and controlled by the dealer, all makes and
34 models of new vehicles the dealer is authorized to sell.
35 2. Give equal reference and prominence on any website owned,
36 operated, or controlled by the manufacturer or distributor on
37 which consumers are permitted to order, purchase, or lease
38 vehicles, to all of the manufacturer's or distributor's franchised
39 dealers that are located in this State.
40 3. Require that all of the new vehicles manufactured or
41 distributed by the manufacturer or distributor that are sold or
42 leased to purchasers or lessees located in this State be
43 physically delivered to the ultimate purchaser or lessee by the
44 same line-make franchised dealer selected by the purchaser or
45 lessee, or in the absence of such selection, by the same
46 line-make dealer from whom the vehicle was purchased or
47 leased, or by the same line-make dealer that is located in
48 closest proximity to the purchaser or lessee.
49 c. Fail or refuse to allow all of its franchised dealers located in this State
50 to do any of the following:
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1 1. Have the ability to maintain on the ground and in the dealer's
2 stock a reasonable supply of all makes and models of new
3 vehicles the dealer is authorized to sell; provided, however,
4 that this sub-subdivision is not violated if the inability of the
5 manufacturer to provide a reasonable on-the-ground supply of
6 new vehicles to dealers is based on Acts of God, labor strikes,
7 or material shortages beyond the control of the manufacturer
8 or distributor.
9 2. Have the right to store new and used batteries at a safe and
10 secure location selected by the dealer that is separate from the
11 dealership premises, fail or refuse to compensate dealers for
12 the full cost of storing used batteries more than 30 days after
13 the manufacturer or distributor has been notified by the dealer
14 of their availability to be picked up, or fail or refuse to
15 compensate and indemnify dealers for all loss and damage
16 caused by vehicle batteries supplied by or through the
17 manufacturer or distributor.
18 3. Have the same opportunity to purchase used vehicle inventory
19 distributed or made available by that manufacturer or
20 distributor without imposing any additional conditions or
21 requirements on their dealers.
22 4. Have the opportunity to order from or through the
23 manufacturer or distributor, receive, and maintain in stock a
24 reasonable supply of parts required for service and repair of the
25 manufacturer's or distributor's vehicles based on the volume of
26 service work performed by the dealer.
27 5. Have the right to independently determine the types of physical
28 and digital advertising media the dealer chooses to advertise
29 all brands, models, and types of vehicles offered for sale by the
30 dealer as well as the content and format of the advertising and
31 all locations where the dealer chooses to establish, publish,
32 broadcast, circulate, or display such advertising and the
33 individuals to whom advertising is targeted or directed;
34 provided, however, that nothing in this sub-subdivision shall
35 be deemed to interfere with the intellectual property rights of
36 manufacturers and distributors.
37 6. Have the ability to use any digital platform or digital retailing
38 tool selected by the dealer as long as it is capable of performing
39 the essential functions required by the manufacturer or
40 distributor.
41 d. Engage in any of the following actions:
42 1. Maintain a website or other electronic or digital means of
43 communication for negotiating prices or other binding terms of
44 sale of new vehicles directly between the manufacturer or
45 distributor and end users located in this State, including, but
46 not limited to, agreements between the manufacturer or
47 distributor and the end user on prices or other substantive terms
48 of sale or leasing of new vehicles.
49 2. Retain ownership of new motor vehicles until they are sold to
50 end users located in this State.
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1 3. Consign new motor vehicles to its franchised dealers in this
2 State for dealer inventory or for sale to end users located in this
3 State.
4 4. Reserve the right to negotiate binding terms of sale directly
5 with buyers of new motor vehicles located in this State.
6 5. Designate its franchised dealers in this State to be only delivery
7 agents for new motor vehicles and service and parts outlets,
8 reserving for the respective manufacturer or distributor the
9 right to establish the binding terms of vehicle sales or the right
10 to negotiate the binding terms of sale directly with end users
11 located in this State.
12 6. Unreasonably impede or interfere with the ability of its rural
13 and other franchised dealers located in this State to obtain from
14 that manufacturer or distributor and sell or lease any series or
15 models of technologically advanced vehicles that the
16 manufacturer or distributor makes available for sale or lease in
17 this State by or through its same line-make dealers. For
18 purposes of this sub-sub-subdivision, the term "technologically
19 advanced vehicle" or "TAV" means a vehicle that utilizes an
20 alternative technology other than an internal combustion
21 engine for propulsion, such as an electric vehicle (EV) or
22 hydrogen vehicle, or a vehicle that utilizes autonomous or
23 self-driving technology rated at Level 3, 4, or 5 by the Society
24 of Automotive Engineers. For purposes of this
25 sub-sub-subdivision, the term "EV" means any plug-in electric
26 vehicle that does not rely on any nonelectric source of power
27 in all modes of operation. For purposes of this
28 sub-sub-subdivision, the term "unreasonably impede or
29 interfere with" includes, but is not limited to, any of the
30 following:
31 I. To fail or refuse to promptly cause, at a dealer's request
32 and at no cost to the dealer, a detailed, itemized,
33 individual dealer assessment to be performed for each
34 of its franchised dealers located in this State that desires
35 to sell and service that manufacturer's or distributor's
36 TAVs to determine the minimum TAV investment
37 each dealer would need to make for training, facilities,
38 tools, parts, equipment, and charging stations for
39 vehicle service and for training dealership employees
40 and customers. Charging stations for use by the public
41 and all other charges or expenditures not technically
42 essential to sell and service the manufacturer's or
43 distributor's TAVs shall not be required or included in
44 determining a dealer's minimum TAV investment. The
45 minimum TAV investment established for each dealer
46 must be scaled based on the estimated number of the
47 manufacturer's or distributor's new TAVs the dealer
48 would be anticipated to sell and the number of TAVs
49 the dealer would be expected to service within the
50 following three-year period. In the event that a
51 manufacturer or distributor had performed an
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1 individualized dealer assessment required in this
2 sub-sub-sub-subdivision prior to July 1, 2023, such
3 assessment shall be deemed to have satisfied the
4 requirements contained in this sub-sub-sub-subdivision
5 as long as it complies with all of the requirements of an
6 individual TAV assessment established in this
7